Customer focus drives Spencer's success

Eight years ago, Jim Spencer got into the furniture business, not really quite sure what to expect. “I didn’t know anything about it,” he said. “I still don’t, really.”
But don’t be fooled by his modesty.
Since opening his first store in Memphis in 2002, Spencer – who serves as chairman and CEO of The Spencer Group – has grown to nine stores and some 325 employees.
Seven of the stores are Ashley Furniture HomeStores, one is an outlet store and one is a new concept store, called Stash, that opened last month.
The market leader in each of its locations, TSG stores have helped the company reach a coveted status.
Last year, The Spencer Group made its debut on the Furniture Today Top 100 list, which ranks the top furniture retailers in the country based on volume.
For 2008, the Saltillo-based company was ranked No. 88, with $61.1 million in furniture, bedding and accessory sales. For 2009, the store moved up to No. 74, thanks to a 5 percent gain to $64.2 million.
The only other Mississippi store to make the Top 100 list is Miskelly Furniture, based in Jackson. Coincidentally, Miskelly took The Spencer Group’s old spot at No. 88, rising from No. 96.
The secret to the TSG’s success? Hard work, of course. But also an intense focus on the customer.
“Price, product and promotion – it’s all the same for furniture retailers,” Spencer said. “You can’t have low prices, because everybody has a low price. And everybody has a good product. If you have a good promotion, somebody is going to run a good one, too. So if price, product and promotion are the same, what’s left? It’s the customer experience.”
Overseeing the “customer experience” is Jeff Spencer, Jim’s oldest son and director of customer relations. Two other sons also play key roles in the company. Chad, the youngest, is president; Jeff Edgeworth, the middle son, oversees Stash.
And it’s Jeff Spencer’s operation that has been a key part of the company’s rapid growth.
He joined the company in 2007, not long after his father and brothers read “The Ultimate Question,” a book by Fred Reichheld that introduced the Net Promoter Score.
The NPS helps companies measure their performance through the eyes of their customers. It divides them into three categories – promoters, passives and detractors.
So The Spencer Group adopted NPS and put Jeff Spencer in charge of implementing it.
“We wanted some way to better track how we were doing with our customers,” he said. “The NPS asks two questions – how would you rate us on a scale of one to 10, and why did you rate us that way?”
The survey, conducted 30 days after customers get their merchandise, gives TSG a better idea of how the customer really feels.
Explained Jim Spencer, “We were calling customers right after we delivered their merchandise to see if everything was to their satisfaction, just like many other retailers do. At that point, customers have a sense of euphoria because they got what they wanted, they’re happy, everything is great. Sure, we had a few problems here or there, but for the most part, everybody was happy.”
But the “newness” can wear off, and customer opinions can and do change. With the NPS system, the company can get a better picture of any problems that need to be fixed, whether major or minor.
Customers get a chance to sit and sleep and eat on their furniture. They also get a chance to ponder whether that delivery was really that good.
Or if the sales representative was helpful or rude.
Or if those three calls to the store and customer service went unanswered.
“I get a report every day detailing what we heard through NPS, and then send it out to our store managers,” Jeff Spencer said. “If there are problems, they have 24 hours to resolve it.”
Jim Spencer said the company wants to find and resolve problems because “it keeps us on our toes so that we can’t take anything for granted.”
And that sharp focus on customer service has helped drive business at Spencer Group stores. It’s not a coincidence that the implementation of the program matches the company’s entry and rise in the Top 100.
Not that it’s been a smooth ride.
After the program was first implemented, the breakdown of “good” and “bad” customer reviews was 55 percent to 45 percent, Jeff Spencer said.
“We found out we had a little problems and some big problems we had to work out,” he said.
Now the review runs about 93 percent favorable to 7 percent unfavorable.
“Once customers know we’re true to our word and that we’re going to take care of them, we know that’s an opportunity that they’ll come back to us again, or they’ll tell their friends and their neighbors,” Jim Spencer said.
The company’s success, he said, goes back to its mission statement: “To achieve excellence as we provide products and services in a way that honors God and blesses our customers and employees.”
“We’re going to get the best employees we can and pay them the best, but they also have to understand and believe in what we do as a company,” he said.
Spencer said if the company stays committed to its mission, it can grow as big as it wants.
“We don’t want to necessarily be the biggest store in America,” he said. “We just want to be the best in America, whether it’s with $20 million or $120 million.”

The Spencer Group
– Based in Saltillo
– Has nine stores in Mississippi,
Tennessee, Arkansas and Kentucky
– Furniture, bedding and accessory
revenue of $64.2 million in 2009
– Ranked No. 74 in Furniture Today
Top 100
– Has 325 employees at its stores
and five distribution centers

Dennis Seid/NEMS Daily Journal

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