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The Nordstrom Way: Valuable Insights from the Company’s Superior Customer Service

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August 10, 2021
Author: NCH

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In 1887, 16-year-old John W. Nordstrom left Sweden and arrived at Ellis Island with $5 and a few English words.

Several years later, he and a friend, Carl F. Wallin, opened the Wallin & Nordstrom shoe store in Seattle with the $13,000 they earned from the Alaska Yukon Gold Rush.

What began as a shoe retailer is now a publicly traded company selling clothing, accessories, handbags, jewelry, cosmetics, and fragrances. Today, more than 365 stores operate in 40 US states, Puerto Rico, and Canada. Three brothers and one cousin—all fourth-generation Nordstroms—sit on the board of directors.

Not only has the store made Fortune’s “100 Best Companies to Work For” list every year since 1998, but it also ranked as the country’s favorite premium fashion retailer for the sixth year running in Market Force Information’s annual study.

A Recipe for Success

According to The Nordstrom Way to Customer Experience Excellence: Creating a Values-Driven Service Culture, a book by Robert Spector and Breanne Reeves, Nordstrom has one main goal: “To provide outstanding service every day, one customer at a time.”

Explains co-president and director, Blake Nordstrom, “By improving on all of the little things in front of you, you will achieve your goal of providing outstanding service every day, one customer or client or patient at a time, The Nordstrom Way.”

In an attempt to explain “The Nordstrom Way,” Spector and Reeves share several values that Nordstrom has adhered to through four generations of family leadership. These values include:

Ingredient #1: Consistently Connect with Customers

Nordstrom employees must “treat each customer as a whole person, as an individual, so that you learn their likes and dislikes.” In addition, creating a relationship that comes from the heart is vital so customers feel like they are working with friends each day. This creates a strong connection that translates into happy customers and brand ambassadors. Because humans are social beings, connecting with customers is vital to every business.

Ingredient #2: Foster a Culture of Continuous Improvement

At Nordstrom, pursuing excellence is not seen as a destination but as a journey. This principle emphasizes the importance of constantly seeking ways to enhance the customer experience and organizational effectiveness. Nordstrom encourages a culture where employees are empowered to identify areas for improvement and implement innovative solutions.

By fostering a mindset of continuous improvement, Nordstrom ensures it stays ahead of evolving customer expectations and market trends. Such a commitment to ongoing enhancement keeps Nordstrom’s position as a leader in the retail industry and reinforces its reputation for delivering exceptional service.

Ingredient #3: Respect All Customers

According to Spector and Reeves, “Every aspect of the Nordstrom experience starts and stops with the customer. When exploring new ways of improving its services and results, Nordstrom asks itself one simple but profound question: What would the customer want?”

Nordstrom adapts to its customers’ wants and needs to guarantee that the Nordstrom system benefits the customer because the customer drives the business. “Selling clothes isn’t what we do,” said a retired Nordstrom executive, quoted in the book. “It’s filling all of people’s needs and making them feel better emotionally.”

Ingredient #4: Prioritize Employee Development and Well-Being

Recognizing that employees are the cornerstone of its success, Nordstrom strongly emphasizes investing in their development and well-being. The company understands that engaged and motivated employees can deliver outstanding service. Nordstrom provides comprehensive training programs, opportunities for career advancement, and a supportive work environment that values diversity, inclusion, and work-life balance.

Nordstrom fosters a positive workplace culture and ensures that its employees are equipped with the skills and resources they need to excel in their roles. This, in turn, translates into enhanced customer satisfaction and loyalty, as employees who feel valued and supported are more likely to go above and beyond to meet customer needs.

Ingredient #5: Always be Humble

When some business owners become successful, they tend to become egotistical. However, Nordstrom makes a conscious effort never to discuss its impressive success or how great its customer service actually is. This mentality also keeps the entire organization focused on continuously striving for improvement, which ultimately benefits customers.

Ingredient #6: Embrace Innovation and Adaptability

In today’s rapidly changing business landscape, innovation and adaptability are necessary for long-term success. Nordstrom recognizes the importance of staying ahead of the curve and continuously innovating to meet evolving customer demands.

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Whether implementing new technologies to enhance the shopping experience or experimenting with innovative business models, Nordstrom is unafraid to embrace change. This willingness to embrace innovation allows Nordstrom to anticipate customer needs, differentiate itself from competitors, and drive sustainable growth.

Ingredient #7: Focus on Practicing Empowerment

“Throughout our organization, our people are empowered to use their energy and their entrepreneurial spirit to take care of the customer,” explains Blake Nordstrom.

Nordstrom’s empowerment culture is embedded in its Inverted Pyramid. In this organizational structure, customers are at the very top. Under them are salespeople, department managers, store managers, executives, and the entire Board of Directors.

To create the Inverted Pyramid, Nordstrom turned the traditional corporate pyramid upside down so that the customers (the most important individuals) are at the very top, with the sales and support staff (the next most important) situated closest to the customers.

“There’s a lot of meaning to the Inverted Pyramid because it reflects all of our values,” says Erik Nordstrom, co-president and director. “The Inverted Pyramid guides our leadership style, which is about support—and not command and control.”

Ingredient #8: Cultivate Trust and Transparency

Trust is the foundation of any successful relationship, and Nordstrom understands the importance of cultivating trust with its customers and employees. The company prioritizes transparency in its operations, communication, and decision-making processes.

Honesty and openness can help Nordstrom build credibility and foster trust with its stakeholders for long-term success. This trust creates a positive environment where customers feel confident in their interactions with the company, and employees feel valued and respected.

So, What is “The Nordstrom Way?”

Simply put, it’s an obsession with every customer and their complete shopping experience.

Bruce Nordstrom, the former chairman and CEO, explains it this way: “Every day in every store in every region, hopefully, something positive is happening that will reinforce our strong reputation and make things better for our employees, our customers, and all of our communities.”

He adds, ‘‘Our commitment is 100 percent to customer service. We are not committed to financial markets. We are not committed to real estate markets. We are not committed to a certain amount of profit. We are only committed to customer service. If we make a profit, that’s great. But customer service is always first. If I’m a salesperson on the floor, and I know that the people who own this place are extremely committed to customer service, then I am free to find new ways to provide great customer service. I know that I will not be criticized for taking care of a customer. I will only be criticized if I do not take care of a customer.’’

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DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.

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