Greetings. I don't shop regularly at Costco even though I have been a member for many years. Maybe it's because I have a real aversion to buying in bulk for our family of five. Or maybe it's because I haven't always found their offerings to be as healthy and inspiring as I might like. Or maybe it's because I often find our local Costco warehouse to be very crowded when I show up. But I have consistently marveled at the success of this giant corporation (with annual revenue of over $80 billion) based on what appears to be a set of corporate values and actions that are clearly employee and customer-centric. Values and actions that provide insight on how to build and maintain loyalty in these challenging economic times.
At the heart of Costco's story is Jim Sinegal, the company's co-founder and CEO, who recently announced that he would be retiring next January at the age of 76. Sinegal has become a legend in business circles--championing the importance of treating employees and customers with respect and running a public company that is not entirely focused on maximizing the bottom-line. Not that Costco isn't a very profitable company. But its dual focus is on employees and keeping costs low for its "members" is fundamental to its business model and long-term success. And through a series of economic downturns Costco has steadfastly refused to layoff employees, refused to cut back on their health benefits and consistently advocated that all companies provide a "living wage" to their workers.
With Sinegal leading the charge from a modest office, while answering his own phone (which he did one day when I called to get a bit of advice), hanging out in the company's stores, eating its well-known $1.50 hot dog and soda combination and taking the time to gather shopping carts from the parking lots. And earning remarkable loyalty from employees at all levels and customers--almost 90 percent of whom renew their memberships each year.
All in a low-cost and highly-competitive industry.
We win in business and in life when we put employees and customers first.
Cheers!
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