Hug Your Customers: The Proven Way to Personalize Sales and Achieve Astounding Results

Citation

Feldman Barr, T. (2005), "Hug Your Customers: The Proven Way to Personalize Sales and Achieve Astounding Results", Journal of Consumer Marketing, Vol. 22 No. 6, pp. 357-359. https://doi.org/10.1108/07363760510623957

Jack Mitchell, CEO of Mitchells/Richards, high‐end retail clothiers in Connecticut, has written a remarkably readable book, chock full of common sense ideas that have helped him and his family build their businesses into the success stories that they are today. Center stage of all of these ideas is a focus on the customer: Do everything, make every decision, hire every salesperson with the customer in mind, then bend over backwards to let the customer know that he/she is important to your business. While not difficult concepts in theory, these ideas are far more difficult to put into practice and maintain day in and day out. Mitchell relays how his stores have not only survived in difficult economic times, but also actually thrived, due to their “hug the customer” approach to doing business.

Mitchell conveys the “Hug Your Customer” ideal through a series of mini‐chapters (56 in all), each supporting one of his many principles. The scenarios (drawn from his experiences both as a retailer and a retail customer) are used to illustrate his principles, and they are both humorous and sad, as they convey a retail environment in which customers are often lost in businesses' attempts to be profitable. Mitchell firmly believes that the Mitchells/Richards' predominant focus on their customers is what has made them profitable. Customers are not an afterthought at Mitchells/Richards, but are instead, the reason the company exists. Exceeding the customer's expectations is the goal of every customer interaction.

Hug Your Customers is divided into eight sections, each with a study guide at the end of the section reviewing the key points. While it would be tedious to review each of the 56 principles addressed in Hug Your Customers, it is possible to identify overriding themes that Mitchell addresses through these eight sections, and, in some, provide illustrative examples of these principles.

Part one theme: hugging 101

The 11 chapters of this section identify what Mitchell means by “hugging one's customer” (either physically, metaphorically, or both) through a series of examples from his retail stores. His basic notion is that hugging one's customer means “knowing everything that you possibly can about [that person], then “showering them with attention” (p. 4). He is convincing in his arguments that it is his company's personal treatment of their customers, with their motto “Once a customer, always a friend” (p. 7) that has led to their success. However, he also clearly states that this success is dependent upon their ability to create the type of environment in which “hugging” can take place. To that end, Mitchell describes the need to have a proactive market orientation throughout the organization, which focuses on customer relationships instead of mere transactions, and provide services that exceed a customer's expectations. Ultimately, a “hug” is anything that exceeds the customer's expectations (p. 28), from providing a cup of fancy coffee to opening the store on a Sunday for a customer who needs an item.

Part two theme: how to develop a hugging organization

Development of a hugging organization is dependent on several ideals that Mitchell proposes, not the least of which is that you have to like people! Now this seems obvious, but anyone who has ever worked in retailing knows that this is not a universally‐held principle. Mitchell's concern here is that the retailer's personality becomes the business, and if the retailer does not really love people, that will show. He also suggests that, contrary to the “location, location, location” mantra that most retailers believe is necessary for success, Mitchell counter argues that “service, service, service” should be what retailers focus on. Good service will bring customers to your location and keep them coming back, in spite of occasional service failures that are bound to happen. Development of a hugging organization requires that employees are, first, educated (training is for dogs says Mitchell), and, second, empowered to do whatever it takes to maintain a customer‐focused environment.

Part three theme: hire and retain great associates

It may be obvious by now, but the key variable in development of a hugging organization is the people within the organization. Mitchell stresses the need to pay close attention to employees, and states “You can have the best service philosophy in the world, but if you don't have great players to execute it, you've lost the game” (p. 90). At Mitchells/Richards, people (employees) come first, before service and product. Hiring the right people who embrace a hugging philosophy is a necessity, and it is accomplished using the following guidelines: Hire people who are competent, confident, positive, passionate, and honest. Once hired, educate and empower them (with authority and resources) to do whatever is necessary to completely satisfy the customer. Mitchell feels strongly that organizations must also encourage employees (“associates” at Mitchells/Richards) to cooperate rather than compete with each other, and save their competitiveness to better their own numbers from one year to the next. Educating employees in the hugging philosophy and the teaching them the tools that are utilized to implement it are also necessary. Retention of associates is critical to the hugging philosophy, and Mitchell stresses the need to take care of employees. He advises organizations to pay their employees well, make sure that there is a healthy balance between work and home, know what makes them tick (know them as well as you want them to know your customers), and treat them well (Mitchells is known to send associates and their spouses on trips to Europe and national and international sporting events – hugs for them too).

Part four theme: use technology to your advantage

Mitchells relies on an extensive customer relationship management program in which all customers are profiled. Associates on the selling floor, as well as employees in accounting, merchandising, and marketing, all regularly update the information within an integrated database, and they rely on its accuracy. Customer buying patterns, needs, and preferences are included. The organization's top customers are easily identified and contacted regularly. This extensive use of customer information makes it easy to hug their customers. As Mitchell puts it, “the technology allows you to speak to customers in a common voice throughout the organization” (p. 126). The use of technology has also allowed Mitchells/Richards to be more efficient and effective in their forecasting, inventory control, and purchasing, and provides an effective way to track employee performance on a regular (even daily) basis, allowing for immediate corrective actions if necessary.

Part five theme: playing to win

Jack Mitchell was an athlete in his younger years, and he uses sports analogies throughout his book to help make his points. This section of the book focuses on what it takes to be successful and profitable – to win the game. Mitchell's three‐step process, simplistically stated, is:

1. 1.

   plan;

2. 2.

   prepare; and

3. 3.

   practice.

Everyone within the organization undertakes these three steps. On “game day” – the biggest sales day of the week (Saturday at Mitchells/Richards), everyone must be on the “field” working synergistically to exceed the customers' expectations. Mitchell also suggests that it is equally important to develop strong “hugging” relationships with suppliers and other upstream vendors, who have the ability to impact your relationship with your customer (through emergency shipments, special orders, etc.), and with community organizations in your firm's immediate locale, as this is where your customers live.

Part six theme: making money

“Hugging makes you money,” says Mitchell (p. 201). Having a hugging culture allows organizations to hire the best people (who are productive), lower marketing costs (because you know your customers so well), increase revenues (satisfied, loyal customers buy more), and lower real estate costs (you are a destination, and customers will seek you out). However, Mitchell also recognizes that in order to make an organization a hugging one, you also have to spend some money – “selling expenses are necessary to build relationships that endure and bring a customer back time after time” (p. 207). To that end, Mitchells/Richards utilizes “the Formula” which incorporates five principles:

1. 1.

   drive sales (which includes investing in employees who are responsible for selling);

2. 2.

   maximize margins (without charging the customers more than other leading retailers);

3. 3.

   do not spend money if it does not touch the customer;

4. 4.

   carry no inventory over from one season to the next; and

5. 5.

   own your real estate.

These five principles continue to help these hugging companies to be financially successful.

Part seven theme: mistakes happen

“When you do something wrong, you can bet the customer remembers it. But what they'll remember most of all is what you did to make up for the mistake” (p. 226).

Every service organization must recognize the fact that service failures are a part of doing business. Mitchell suggests that these failures should be viewed as challenges – opportunities to go beyond expected levels of service, and ultimately, strengthen your relationship with your customer(s). And, recovery from failures is much easier in a hugging organization because of the personal relationship that you have with your customers. Mitchell advises organizations to have a standard methodology in place to deal with problems and mistakes as they arise. Mitchells/Richards framework for dealing with service failures is a five‐step approach:

1. 1.

   recognize the problem (which means encouraging customers to tell you about the problem to begin with);

2. 2.

   own the problem (educate associates to their responsibilities);

3. 3.

   apologize for the mistake;

4. 4.

   fix it (empower all employees with the authority to do what is needed); and

5. 5.

   hug the customer.

Blame is not constructive; put energy into fixing the problem so that it does not happen in the future.

Part eight theme: change is good

“Customers are constantly searching for something new”, admonishes Mitchell (p. 250). Therefore, it is important to make sure that your organization recognizes the power of change, both in inventory and in the way that you interact with your customers. “Hugs can get stale if they're always the same … they lose their effectiveness”, says Mitchell, whose companies hire new associates, bring in new product lines, add new departments, and develop new “hugs” on a regular basis to stay fresh.

This quick‐read is full of anecdotes that support the Mitchells/Richards hugging philosophy. And while a bit on the hokey side in places, Jack Mitchell's sentiments, philosophy, and strategies are supported by his company's excellent performance in the competitive, high‐end retail environment. To that end, this book provides food for thought for any organization whose goal is to build and maintain relationships with its customers.