'Take Care Of Employees & Customers...The Rest Will Take Care Of Itself,' Says Lands' End ExecApril 1, 2001
by Alan Hunt
One of the reasons for the "dotcom implosion" is that companies focused almost entirely on attracting new customers -- the "get big fast" philosophy -- rather than servicing their current customers, said David Dyer, president and chief executive officer of one of the leading catalog companies, Lands' End Inc., in a recent speech at Baylor.
Dyer, speaking to students at the Hankamer School of Business on "Doing Business in the New Economy," pointed out that the federal government even fined some dotcom companies for providing such poor customer service that they violated federal law. "Think about this for a second," he said. "The federal government is not exactly a bastion of customer service, but these companies performed so poorly that they couldn't even pass the government's low standards."
Customer Service in New Economy
At Lands' End, Dyer said, "Our reputation is built on outstanding customer service. We believe customer service is just as important in the new economy as the old."
Dyer, who was delivering the Ben H. Williams Distinguished Speakers Series lecture, said Baylor has always "been special" to his family because his uncle and aunt, Dr. Preston Dyer, professor and chair of social work, and Dr. Genie Dyer, lecturer in social work and sociology, have taught at Baylor for years.
Joining Lands' End in 1989 as managing director of the Lands' End Coming Home catalog, Dyer had advanced by 1993 to vice chairman of merchandising and sales. The next year, he moved to The Home Shopping Network as president and COO. Four years later, in 1998, Dyer returned to Lands' End.
The company's sales for fiscal year 2000 were $1.32 billion with a customer base of 6.2 million. Lands' End sales are generated from catalogs, the Internet and outlet stores in the U.S., Europe and Japan. The publication Catalog Age ranks Lands' End the 15th largest mail order company and the second largest for apparel only.
Care of Employees, Customers
Dyer stressed the importance the company attaches to looking after its employees. "We have a saying at Lands' End that is literally painted on the walls throughout the campus: 'Take care of the employees, take care of the customer, and the rest will take care of itself.' Talk to any CEO, new economy or old, from Jack Welch to Jeff Bezos to Michael Dell to Bill Gates about what is the single most important thing they do as a business leader and they will say, 'Recruit, develop, and retain quality employees.'"
Addressing his topic, "Doing Business in the New Economy," Dyer said in reality "it's not that different than doing business in the old economy." He pointed out, "Another old economy idea that new economy companies tried to ignore is the fact that brands matter. And brands are not bought through million-dollar Super Bowl ads. They are built through millions of customer interactions and developed over time."
Continued Innovation Key to Success
Dyer said the dotcom landscape is "littered with the carcasses" of companies that tried, and failed, to buy their way into overnight brand equity.
He added, "Innovation is important in the new economy. But it was just as important in the old economy." He said Lands' End completely reinvented itself in the early 70s, transforming from a sailboat fittings company into a casual clothing company.
"In the late 70s, we pioneered the use of toll free phone calls for catalog orders. In the early 90s, before the browser and the world wide web, Lands' End was selling clothes on online services like AOL and Prodigy. We may have more tools with which to innovate now, but the importance of innovation has not changed."
Dyer said old economy ideas still firmly apply today. "Customer service, a differentiated brand, quality product, quality people, and profits still count," he said. "Only strategies and tactics are changing as the Internet and technology open up new opportunities."