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!
