(AP Photo/James A. Finley)
They did it again! For the 10th straight year, Ace Hardware won the J.D. Power award for highest customer satisfaction among home improvement stores. The study included feedback from approximately 3,000 consumers who made purchases from home improvement stores during the last year.
I’m a huge fan of Ace Hardware. About five years ago I was hired to speak at an event for Ace retailers. Before the speech, I had the privilege of enjoying lunch with John Venhuizen (now Ace’s CEO), Tom Knox, VP of Retail Operations, and several other executives. I was surprised when they showed me a Business Week article that ranked the top 25 customer service companies – and Ace was ranked number 10! They actually were ranked higher than one of my other favorite customer-focused companies, Ritz-Carlton, which came in at number 12.
While I already loved the company, this article was validation that Ace is a customer service rock star! What’s more, they are rock-solid, as they have been helping their customers since 1926 and continue to receive accolades for their amazing service.
And, what makes this even more interesting is that they not only survive, but thrive in an intensely competitive environment. These independently owned retail stores go up against big box stores that in some cases are 10 times larger than the typical Ace Hardware store. Furthermore, these competitors often spend 30 times more than Ace in advertising dollars. CEO John Venhuizen calls Ace’s success a David and Goliath business story. The little guy takes on the big guy and wins.
So, how does a typical Ace Hardware store, which is a fraction of the size of a big box store, compete? It’s simple: customer service!
There are countless surveys that prove customer service is a true competitive advantage. All things being equal, the scales tip in favor of the company that delivers a better customer experience. Often, better service even trumps a lower price. Companies that win with customer service know that their customers buy more, buy more often and share their positive experiences with friends, colleagues and family members.
So, what are the secrets that enable Ace to win in an incredibly competitive marketplace?
1. They mystery shop their stores. Many companies use mystery shoppers in their stores, but what makes Ace Hardware different is that the stores are independently owned, yet they agree to be mystery shopped by the corporate cooperative that supplies their merchandise. The headquarters provides customer service training and mystery shopping services that the dealers know will take them to a higher level of customer experience. Ace corporate has created stringent standards their retailers must meet to earn the designation of “Certified Ace Helpful.”
2. They are easy to do business with. The Ace Hardware stores are smaller, and that can work to their advantage. While they may not have the largest variety or even the lowest prices, they can compete with convenience. Driving through the parking lot is easier. Navigating through the store doesn’t mean a quarter-mile walk from one side of the store to the other. There seems to be more staff to help the customers than in the typical hardware or big box store. Overall, it’s just an easier experience.
3. They engage their customers when they enter the store. This is more than a friendly greeting. Instead of a traditional greeting like, “Hello, how are you today?” the Ace Associates are taught to ask, “What can I help you find today?” And, when they find out, they don’t just point the customer in the right direction, they walk the customer to the item. Then, to take the experience to a higher level, they start a conversation to learn more about why the customer needs the item and how it will be used.
4. They have knowledgeable staff. While the same might be said about the competition, Ace associates are taught to use their knowledge in a different way. As they engage with customers and help them find the items they are seeking, they ask appropriate questions that give them the opportunity to help the customer by making suggestions that might make the project easier and even less expensive.
5. They don’t just give friendly service, they deliver helpful. You may have noticed a common thread in several of the items above, and it is what Ace is known for – helping, or being helpful. Engaging the customer is friendly. But, Ace takes it a step further, always making suggestions that help the customer. It is in Ace’s corporate DNA to be the most helpful hardware stores on the planet. Helpful is their ultimate competitive advantage.
One thing is certain. Ace Hardware wants to keep winning. They want J.D. Power award No. 11 (and 12, 13, 14 …). They will not rest on their laurels. They know they way to win is by continuing their long-term successful efforts of amazing every customer every time.
