People power
Doing something different in the grocery business means delivering something that others talk about but few deliver on: Customer service.
"Big companies in our business, no matter what they say, they look at labor as an expense to be minimized," says Heinen. "Labor is clearly an expense, but we look at it as an expense to be leveraged."
With public companies, everything is driven by the quarterly report. CEOs have 12 weeks to show results, or they put the stock price and their job in jeopardy.
"Their reality is committed to 12 weeks at a time," says Heinen. "It costs money to invest in people, and the return is not there in 12 weeks. That’s one of the advantages of being privately held: Companies couldn’t be committed to customer service the way we are and still make it work."
Some of that commitment to service comes from the values of the neighborhoods Heinen’s serves and from which it draws its employees. They come predominantly from families with good work ethics and values, but the rest of the equation is nothing fancy.
"For years, we had no formal (employee training) program," says Heinen. "It was simply about treating customers right. The other people around them would not let bad things happen. About seven years ago, we finally did formalize it into five sessions of customer service."
Heinen says the program’s aim is to give people the tools to succeed in personal development; it just happens to be wrapped around a customer service focus.
"When you come to work, you have a choice as to whether to be in a good mood or a bad mood," says Heinen. "Stop being a victim. You may have a crappy manager, but that still doesn’t control how you should deal with the customer."
Being a family business for three generations makes the customer service pitch easier, simply because the family has set the tone from the beginning.
"For three generations, we have been nice, respectful and helpful to people," says Heinen. "If you go to Heinen’s and ask for something, it is pretty much firing squad death if you say, ‘That’s not my department,’ but that’s standard fare in tons of retail outlets."
Probably the most important aspect of investing in people is keeping today’s most valuable currency — knowledge — in place.
"You have got to have people that are knowledgeable about the product and really be able to help the customer," says Heinen. "People simply don’t know about the tons of food that is now available. There is less understanding today about cooking than 25 years ago. Shoppers today know less about cooking, but it is because they are cooking so many different foods.
"It used to be there was just ocean perch and cod at the seafood counter. Now there’s salmon, perch, cod, grouper and a bunch of other stuff. It puts a lot of pressure on the person behind the counter."
The 1,300 full-time and 800 part-time Heinen’s employees now have to be what Heinen calls sales merchants.
"They have to be able to sell across the counter," says Heinen. "They have to be able to build a display."
This means having someone from the meat department slicing ham in the aisle, talking to people and educating them about the product. It means having people from the prepared foods department giving holiday tips and ideas on how to use the available products.
"It’s not just a demo woman saying, ‘Try the product,’ but giving the customer information that may entice them to buy now or later," says Heinen. "Each person needs to be very knowledgeable about the products they sell in order to be a sales merchant. That is our future. The rest of the people, despite what they say, are not committed to that."
Tom Heinen laughs at the fact that Tops offered a buyout to some of its senior people, something Heinen wouldn’t even consider doing at his company.
"(The senior people) are our backbone," he says. "They are the ones that know everything. People ask me about a buyout, and I say, ‘No, you have to stay, I have a lot invested in you.’ It’s a different environment."
Big competitors focus on squeezing better results out of the systems. Heinen’s, which lacks those economies of scale, has to focus on people to get better results.
"The competition views customer service as working faster," says Heinen "Their message and incentives are all about controlling those costs, not developing people and teams and setting goals and improvements for people. Their goals are to go from stocking 100 cases to 125. The people side is where Heinen’s is. We will either survive or fail based on our people. We aren’t big enough to get the same cost efficiencies they do.
"Wal-Mart doesn’t sell poor quality, they just sell good quality. They are selling items of a different price and grade. Their product isn’t going to kill you, but do you want the big orange or the little orange?
"My guess is that if we get to the point where there aren’t enough people that care about the size of the orange, then we’ll cease to exist."
HOW TO REACH: Heinen’s, (216) 475-2300
