Costco’s blockbuster business isn’t just about price

Amid the incessant discussion of “customer engagement,” Costco is one bigbox retailer that defies the mega-institutional malaise blanketing most of the nation. We’ve become accustomed to getting lousy service and, in many cases, second-rate product quality in exchange for low prices.

Now that people are increasingly demanding quality service and products in addition to favorable pricing, it’s no wonder that Costco is reaping the rewards. Its longstanding policies of superior customer care, extremely liberal return policies, and extensive vetting of products hitting the shelves are paying off bigtime. People can shop Costco confidently—knowing they will be treated fairly and well, that merchandise by and large is higher quality, and that they can get a great price.

Try doing that with a cable or satellite company, or most of the other bigbox chains.

When you ask for help (via phone or on-site) at Costco, you generally get people motivated to provide support and solutions without looking at their watches to see how fast they can get rid of you. If they don’t have answers, they typically will either try to get them for you

It’s significant that Costco carries in the neighborhood of 4,000 items versus a WalMart with 100,000—so they are invested in selling the best performing, most reliable items from manufacturers willing to agree to Costco’s return policies. With this level of selectivity, under-performing products generally go away fairly quickly. All this leaves customers in the driver’s seat when it comes to customer experience—which is what much of “customer engagement” addresses.

Costco even has the temerity to turn away highly popular manufacturers unwilling to honor return protocols. Evidently, that is the reason that they only recently started selling iPads and other Apple products. Previously, Apple was unwilling to agree to Costco’s 90-day computer/electronic return policy.

So, want to expand your business and profitability? Follow the Costco blueprint. They were customer engaged long before “customer engagement” buzz became deafening.