Americans are justifiably furious with big business. Their trust has been shattered by reckless risk taking and the expectation that the public will make good on private sector mistakes. Too many business leaders see people solely as profit centers. In such an atmosphere, no amount of Congressional oversight, government regulation and fines will make much difference.
My father would have never made it to the board room of BP or AIG. He dropped out of school to sell newspapers to help support his family. He later ran a small business, in which my brother and I worked during much of our free time from age eight until we left home. Naturally, we would have rather played outside. But, looking back, he taught us business ethics lessons that no MBA could have given us.
Sam Newell never made a million bucks, never franchised his operation and never had a ghostwriter pen his autobiography. He sold appliances, retail. No government bailout would be there for him. He had to succeed - and he did. The basis of his success was five bedrock principles. He, of course, was too busy living them to make such a list.
#1: Customer Loyalty is Worth More Than a Sale
My father sold loyalty, not merchandise. He felt it was better to lose the sale than the customer's trust. It was not uncommon to see him suggest that a customer not buy an item if it was wrong for her needs. Keeping customers loyal also meant keeping promises. If a TV set was a Christmas gift, that meant my brother and me carrying it up three floors after driving through a snowstorm on Christmas Eve. And there was no automated phone menu to wade through; a live person always answered - and you had better do so with the utmost politeness.
#2: The Customer is Always Right, Even When He is Wrong
When a doctor complained that his dishwasher was no good because it couldn't even clean the chicken bones off the plate he put in it, he was right. When a customer called to say her vacuum cleaner was a piece of junk because it broke when she used it to suck up nails, she was right too. My father always accepted his customers' complaints, even when they were outrageous. The respect he thus accorded them allowed the customer and him to look at what had happened together rather than as adversaries. In defusing their anger, he opened them up to solving the real problem, even if it did cost him money.
#3: Educate the Consumer
A lot of times, the real problem was a lack of knowledge, so my father was a fervent believer in teaching customers. The road to higher sales was paved with knowledge, not bait and switch advertising. The smarter they became, the more they got their needs met. This didn't always work, of course. Some customers, like the couple who bought a clothes dryer at a discount store for $210 instead of the exact same one from my father for $190 because the discounter gave them $50 off and my father only $30, just aren't ready to learn. But, even in their case, he was gentle, understanding, and wished them well.
He applied the same logic to his suppliers - the manufacturers that shipped him all those refrigerators, air conditioners, and television sets. When they didn't understand the world of the small businessman or the psychology of a single customer, he took on this educational challenge with a Rabbi's twinkle in his eye. A whiz at math, before the days of the hand-held calculator, he also showed them the figures to prove why their approach would cost them in the long run.
#4: Do Any Job It Takes
My father may have been the president of his small company, but that didn't stop him from dusting the merchandise, mopping the floor, packing cartons, and carrying them out the door. He didn't do this to demonstrate he was "one of us." He did it naturally, because he loved his work and because it improved service to the customer. No one who worked for him would ever say "it wasn't my job to do that" because he would never think of saying it.
#5: Think for Yourself
There were no computer chips in my father's cash register to tell us how much change to give from a $20 bill. Even if such equipment had existed back then, I doubt he would have used it. He wanted us to think. Thinking for yourself was certainly his measure of the maturity of his sons. And he taught it the only way you can teach it - he gave us responsibility and stood back. At 11, I was made "manager" of the toy department. One day, he saw me slowly wrapping up toys a couple had bought. "Why are you taking so long to wrap these?" he asked. "They're still looking," I whispered. The smile on his face, the recognition that his son understood a key lesson of soft-pressure selling, was worth more to me than any bonus I have received since.
The path to trust and customer loyalty in business must be marked by methods that treat customers with dignity and respect. At the heart of business scandals is the failure to remember that the relationship with each customer is more important than pleasing your boss, the CEO, the Board of Directors, or Wall Street. My father had hoped to leave his business to his sons, but neither of us wanted to run it. At the end of his life, though, I suspect he realized that he did leave us his principles - and his passion for them. I think this was the sale in life he was most anxious to close.