A few years ago, Blake Nordstrom, copresident of the company with his two brothers, scheduled a lunch with the chief executive officer of another famous Seattle company. The CEO asked Blake if he wouldn't mind stopping by the tailor shop of the downtown Seattle Nordstrom flagship store on his way to the lunch, and bring with him a couple of pairs of slacks that the CEO had arranged to have altered.

“Blake said, ‘Sure, no problem,’” the CEO remembered. By the time the two executives met for lunch, both of them had forgotten about the pants. “That evening at nine o'clock, there's a knock at my door. There's Blake with those two pairs of pants. I said, ‘Man, that's what I call service.’”

In a sense, Blake's personally delivering those pants is the perfect metaphor for The Nordstrom Way. Nordstrom's culture encourages entrepreneurial, motivated men and women to make the extra effort to give customer service that is unequaled. “Not service like it used to be, but service that never was,” reported Morley Safer in a profile of the company on the CBS television program 60 Minutes. “A place where service is an act of faith.”

Morley Safer made that observation in 1990. Although much has changed since then, Nordstrom's commitment to service has never wavered.

When The Nordstrom Way was first published in 1995, it struck a chord with countless organizations in a broad variety of industries all over the world. Many hundreds of thousands of copies and four iterations later, The Nordstrom Way continues to serve as an inspiration for virtually every sector of international business. Nordstrom endures as a standard against which other companies and organizations privately (and often publicly) measure themselves.

“If all businesses could be like Nordstrom,” said Harry Mullikin, chairman emeritus of Westin Hotels, “it would change the whole economy of this country.”

“The Nordstrom Way,” the phrase that we have helped to popularize, is shorthand for a customer experience that is sui generis. Through all the changes that Nordstrom and the retail industry have gone through over more than a century, the Nordstrom Way is still in a class by itself.

It must be noted that Nordstrom did not suggest we write The Nordstrom Way nor did the company commission its publication. Nevertheless, when the original book was written, the company made its top executives, managers, and salespeople available for interviews. Through all the different versions of this book that we have written over the years (which we will explain in greater detail), Nordstrom has cooperated in helping us to tell their ever‐evolving story.

Introduction to the Third Edition

This is a completely different book from the first and second editions, just as the first and second editions were completely different from the 1995 book and the 1997 trade paperback.

In 2005, for the 10th anniversary of the original publication, we initially thought of adding a new chapter or two. But upon reviewing the material, it was obvious that much of the book was too dated to be relevant. For example, the original book didn't mention something called the Internet. By 2012, the 2005 first edition was also dated. Hence, the necessity for the book you are now reading. Our books have evolved just as Nordstrom has evolved. Our books reflect both Nordstrom's bedrock culture and its understanding that survival requires perpetual adaptation and evolution.

This third edition is coauthored by breAnne O. Reeves, cofounder and partner of our consulting company RSi, a thought leader in customer experience. This book is her vision, based on our years of research and working with clients in many different business sectors all over the world.

The Customer Experience Conundrum

This is not a book about selling shoes or clothes or cosmetics or jewelry. As the subtitle spells out, this is a book about creating a values‐driven, service‐obsessed corporate culture that encourages, motivates, rewards, recognizes, and compensates employees to consistently deliver a world‐class experience to customers.

Each one of us is an expert on customer service. At one point or another during the course of our day, every one of us plays the role of the customer. We all know the difference between good service and bad service. You don't have to read yet another book to understand this.

So, then, why is good customer service so rare?

Picture in your mind a customer service counter. On one side of the counter is you, the customer. You know exactly what your expectations are: a good product or service at a fair price. If there's a problem, you want it taken care of as quickly, seamlessly, and painlessly as possible. Simple stuff, right?

But a funny thing happens to people when they move to the other side of the customer service counter (or the front desk or the reception area or the phone or Internet) where they are the ones who are giving service as opposed to receiving it. Unfortunately, this is the place where their behaviors are determined and dominated by the rules, the process, the manual, the bureaucracy, the way it's always been done:

• “Sorry, that's against our policy.”
• “Sorry, we have a rule against that.”
• “Sorry, my manager's off today. Can I get back to you when she gets back?”

When we are customers, we don't want to hear those excuses. So when we are dealing with our customers, why would we want to offer up these lame excuses to our customers? It's as if someone hit the “delete” button on our customer service memory. We forget about the Golden Rule, about empathy, about the customer's experience. Because organizations are so wrapped up in the day‐to‐day minutiae, it's difficult for them to consistently give customer service.

Although we all know that the key to success is a satisfied customer, few of us are as single‐minded as Nordstrom in creating and sustaining a customer‐obsessed culture and hiring people who fit the culture and who happily provide that exemplary service—because it's demanded and expected of them.

When it comes to singing the song of customer service, anyone can recite the words but few can carry the tune.

Becoming the Nordstrom of Your Industry

Most companies, large and small, base their business model on their own internal systems. These systems are set up to make life easier for the company not necessarily for the customer.

One three‐panel Dilbert cartoon strip, by Scott Adams, illustrates this mind‐set. In the first panel, the lead employee tells two others: “Our goal is to ship a million units this quarter.” In the second panel, another employee asks: “Do we have any goals that involve making customers happy?” In the third panel, the lead employee responds: “I'm talking about our goals; not theirs.”

When we show that cartoon strip in our keynotes and training sessions it inevitably gets a knowing laugh from the audience. It's funny because it's true. Too true.

On the other hand, because Nordstrom is dedicated to making life easier for the customer, it believes its job is to adjust to the customers' needs at the time of the purchasing decision. Nordstrom doesn't determine what good service is; the customer does.

“From the sales floor to support, no matter where we work, our challenge is to constantly put the customer at the center of everything we do,” said Blake Nordstrom, who runs the company with his brothers Pete and Erik. “The ultimate filter for all our efforts should be: ‘How is this meaningful to the customer and will it increase sales?’ If something is important to the customer, we should find a way to deliver it. If it's not important to the customer, we need to question if it's worth our time and focus.”

Nordstrom has no official mission statement or value statement, “because sometimes that becomes the flavor of the month,” said Blake. Mission statements “are only as good as the words on the paper.”

Nordstrom is customer‐driven not customer‐focused. “Customer‐driven” means that Nordstrom puts the needs of the customer in the center of every decision on how and where to allocate resources. It means putting the customer in the driver's seat and setting aside notions and historical preconceptions of how the customer wants to be served. Customer driven is about empowering customers to dictate their terms when it comes to the different ways they choose to shop.

This mind‐set is significant because of the astonishing speed with which the shopping experience is changing and how customers are reconsidering the service experience. Customers want to do business with companies that swiftly recognize and respond to their needs and desires.

Nordstrom has been ranked as a retail industry leader in customer satisfaction by the American Customer Satisfaction Survey in each and every year since 1995. Nordstrom has consistently ranked as America's favorite fashion retailer in Market Force Information's annual survey, which cited Nordstrom as the industry pacesetter in (1) service, (2) ease of shopping, (3) ambience, and (4) brand value.

Nordstrom has long been a popular subject for study among authors of customer service books and educators at business graduate schools such as Harvard and Wharton. Roll Call, the newspaper of Capitol Hill, once advised press aides for members of the United States Congress to use the “Nordstrom approach” when trying to sell producers of political talk shows on the benefits of booking their bosses. The New York Times Magazine noted that a minister in Bel Air, California, told his congregation in a Sunday sermon that Nordstrom, “carries out the call of the gospel in ways more consistent and caring than we sometimes do in the church.”

In an article in the Nashville Tennessean newspaper, a writer called for local schools to create a “customer‐centric culture,” to create “the loyalty and enthusiasm that is crucial to participation, funding, and community pride. The Walmart model is good for some things, but if it is quality you desire, Nordstrom is the way.”

Businesses of every kind strive to become the Nordstrom of their industry. Over the years, we have collected dozens and dozens of examples of this metaphor.

Recreational Equipment Inc., a Seattle neighbor, has been called “the Nordstrom of sporting goods stores” and Specialty Foods magazine described A Southern Season, a store in Chapel Hill, North Carolina, as “the Nordstrom of specialty food.”

A top broker for Century 21 once told Fast Company, “I want people to think of me as the Nordstrom of real estate.”

A dean at Fullerton College in California vowed to create, “the Nordstrom of Admissions and Records.”

The University of Colorado Hospital installed a baby grand piano (a popular feature in many Nordstrom full‐line stores) in its lobby and began advertising itself as “The Nordstrom of Hospitals.”

You can find similar comparisons in yoga studios, restaurants, cloud computing, office furniture, public libraries, construction supply distribution, hot tubs, dental offices, pet stores, thermal rolls, foundries, workplace giving, doors and windows, and contract consulting.

We've even found “the Nordstrom of garbage collection.” I don't know what its return policy is, and I don't want to find out.

Even Nordstrom uses this metaphor. In describing the company's Rack division of clearance stores, Blake once said, “We like to think that the Rack is the Nordstrom of the discount world.”

So, what does it mean to be the Nordstrom of your industry? It's not just a smiling face that greets you when you enter the department. It's covering every aspect of the business—the things the customers see and the things that they don't see.

How can an organization create a culture and atmosphere to provide Nordstrom‐like service? This book answers those questions and shows you how to do it.

A Family Business, a Public Company

The old saying about a family business goes like this: The first generation builds it, the second generation enjoys it, and the third generation destroys it. We don't bother to mention the fourth generation because few businesses last that long.

If there was ever a family business that defies that stereotype, it is Nordstrom. Technically, Nordstrom, which was founded in 1901, is not a family business. Although Nordstrom has it's been a publicly traded company since 1971. The chairman of its board of directors is not a family member and has never worked for the company.

Nevertheless, Nordstrom is a family company in the sense that it is still run by members of the family. Brothers Blake, Pete, and Erik (who are on the board of directors), and their second cousin Jamie are the fourth generation to work in the business, which was founded by their great‐grandfather, John W. Nordstrom. The Nordstrom family owns about 30 percent of the outstanding shares. In 2017, the family was exploring taking the company private.

Dollar for dollar, Nordstrom is one of the great stories in U.S. business. We may never see its like again: a century‐plus‐old corporation that is run by the fourth generation of a family with the same commitment to the customer experience as their forbears. With the exception of Nordstrom, the great department stores of the United States are no longer controlled or operated by the descendants of the founding merchants. Keenly aware that the challenges of modern (and future) worlds of retail are radically different from those of the world of their ancestors, this generation—like its predecessors—is continually adapting and innovating, which is why they are still around.

As of 2017, Nordstrom had 122 full‐line stores in 40 states and four Canadian provinces and the Commonwealth of Puerto Rico; 221 Nordstrom Rack stores, and seven Trunk Club Clubhouses.

What Makes Nordstrom Unique?

Nordstrom's business is composed of people, product, and place. The company combines superior merchandise and motivated people to create an experience for customers that exceeds their expectations. Customers have a myriad of choices to buy apparel, footwear, cosmetics, and accessories. When they shop with Nordstrom, that's the ultimate endorsement.

The chain, which is geared toward middle‐ to upper‐income women and men, offers attractive stores with a large, varied, and competitively priced inventory of shoes, apparel, accessories, and cosmetics, and a liberal return policy. But many stores do that—at least to varying degrees.

It's got an easy‐to‐use website and an active, creative social media presence. Again, a lot of companies can say that.

What makes Nordstrom unique is its culture of motivated, empowered employees, each with an entrepreneurial spirit to give great customer service. Nordstrom encourages, preaches, demands, and expects individual initiative from all employees, whether on the front lines or in support roles. Salespeople are given the freedom to create their own individual businesses, to be a franchise within a franchise. The best Nordstrom sales associates will do virtually everything they can to make sure a shopper leaves the store a satisfied customer. Nordstrom salespeople put themselves in the shoes (metaphorically speaking) of the customer. They do whatever they can to make life easier for their customers.

The qualities that Nordstrom looks for in its employees couldn't be more basic. First of all, the company wants its salespeople to be nice and motivated. You're probably asking, “What organization doesn't want to hire nice, motivated people?” The difference is that Nordstrom is dedicated to hiring people who are already nice and already motivated to do a good job—before they apply for a job.

Have you ever tried to take someone who is not nice and motivated and magically make them nice and motivated? It can't be done. And yet, so many organizations believe that—with initiatives or training or slogans or catch phrases—they can change a person's inherent nature. It can't be done. People are who they are. They are not going to change. Don't waste time and money trying to change them.

Why a Third Edition?

Through all the vagaries, vicissitudes, fads, and trends of fashion, retail, consumerism, and product delivery channels; through the existential threats of world wars, recessions, and the Great Depression, Nordstrom has survived and thrived by integrating new tools and techniques within its culture of service to offer a highly personalized customer experience that adapts to customers' changing expectations.

RSi, our consulting company, has evolved as Nordstrom has evolved. The material in this book reflects our passion and beliefs about the customer and employee experiences, and the material is the foundation of our keynotes and consulting practices.

The lessons of The Nordstrom Way are more important than ever because we are living in the age of the customer. Today's customers are the most powerful consumers in the 7,200‐year history of trade among civilized societies, because they have more information, more options, better tools, and higher expectations. They want to engage with companies on their own terms, which, one hopes, translates into a seamless, painless experience across all channels.

Values

Unlike the previous versions of The Nordstrom Way, this edition focuses not on practices but on values. We define values as standards of behavior, the nonnegotiable beliefs that are most important in your life.

If “vision” is the head, and “mission” is the heart, then “values” are the soul of your culture. The only way an organization can create a lasting customer service culture is by hiring people who buy into the core values.

Most organizations are guided by practices that are influenced by market conditions, such as short‐term strategies for product and/or service offerings. In order to stay competitive, you must adjust your way of doing business. Your organization's viability is designed by your business plan, but your longevity is determined by your personal values, which explain what you are as an organization.

“Values define who we are, and if they change we become something else,” said Pete, who described practices as, “ways of doing things…that express our values. Practices may serve us well for long periods of time—but they are not values and, therefore, can be changed without changing our culture. So, if we're thinking about the business from the customers' point of view, we should evolve and be nimble and provide the goods or services that they are looking for. There are very few things that are sacred that we should stay true to. Practices, which change and evolve, deliver these values.”

By adhering to a set of nonnegotiable values any organization can attract and retain the people who will help you achieve success. Once you identify the kind of people that will thrive in your organization, you will be happy only with those who share your values. We're not talking about people who think as you do, but rather people who believe as you do.

“People always ask me, how do you teach core values? The answer is, you don't,” wrote James Collins, coauthor of Built to Last: Successful Habits of Visionary Companies, which profiles Nordstrom. “The goal is not to get people to share your core values. It's to get people who already share your core values.”

And as Howard Schultz, chairman of Starbucks, said, “Culture trumps strategy. You need strategy and execution, but if you're not aligned with shared values, that is not sustainable.”

Research

By way of research, we re‐read the respective memoirs of members of the first three generations of the Nordstrom family:

The Immigrant in 1887 by the founder John W. Nordstrom chronicles how he left his home in Sweden at the age of 16 and arrived at Ellis Island with $5.00 in his pocket and just a few words of English. He worked his way west through a succession of backbreaking, manual labor jobs, hit a gold strike in the Alaska Yukon Gold Rush that paid him $13,000, which he invested with his friend and business partner Carl Wallin to open the modest Wallin & Nordstrom shoe store in downtown Seattle in 1901.

A Winning Team by John W.'s son Elmer Nordstrom details how Elmer and his brothers Everett and Lloyd created the biggest independent shoe retailer in the United States by the mid‐1960s (and, on the side, became majority owners of the expansion Seattle Seahawks of the National Football League).

Leave It Better Than You Found It by Bruce A. Nordstrom (son of Everett) tells how he, along with his cousins John N. and James (sons of Elmer), and their cousin‐in‐law Jack MacMillan (son‐in‐law of Lloyd), expanded into apparel, cosmetics, and jewelry and created the classic full‐line Nordstrom store that we are familiar with today.

Mr. John: Football, Flying, and a Proud Family Legacy by John N. Nordstrom.

We also revisited all the books that we have written about the company.

As we reviewed those books, we identified and compiled a list of the values that Nordstrom has always adhered to through four generations of family leadership.

The values we singled out are:

1. Trust
2. Respect
3. Loyalty
4. Awareness
5. Humility
6. Communication and Collaboration
7. Competition and Compensation
8. Innovation and Adaptation
9. Give Back and Have Fun

As you will see trust and respect comprise almost one third of the narrative of this book, because they are the foundation for all relationships. Without trust and respect, the remaining values are meaningless.

Nordstrom has one simple goal: to provide outstanding service every day, one customer at a time. This goal is accomplished, in the words of Blake Nordstrom, by continuing, “to improve on the little things in front of us. It doesn't sound very glamorous but that's what we're going to do.”

By improving on all the little things in front of you, you will achieve your goal of providing outstanding service every day, one customer or client or patient at a time, The Nordstrom Way.

Notes to the Reader

In the course of this book, we will be citing and quoting four generations of Nordstrom. For those of you who want to keep track of the individual Nordstroms and the years that they ran the company, here is the pertinent information:

• Founder: John W. (1901 to 1926)
• Second generation: Everett, Elmer, and Lloyd (1926 to 1969)
• Third generation: Bruce, John N., and James (1969 to 1999)
• Fourth generation: Blake, Pete, Erik, and Jamie (1999 to present)

Throughout this book, we will be quoting many members of the Nordstrom family, both living and deceased. To avoid repetition, in most cases we will be using only their first names.

All quotes from Nordstrom executives come from author interviews, public speeches, and additional author research, unless otherwise specified.

All definitions of values that begin each chapter are sourced from Merriam Webster's Collegiate Dictionary, 11th Edition.