Message to Associates

By Sam Walton, Chairman

I’ve had a real good week. I’ve just returned from the Grand Opening of our new Sam’s in Ferguson, North St. Louis, where General Manager Bob Leary and team have hit the ground running. Not only did they break all existing records for Sam’s in using the fewest associates ever in opening their warehouse, but they were so well organized and productive, they broke all previous records for total pre-opening costs as well. So, to our new partners at Sam’s in Ferguson, we all salute you, appreciate you, and welcome you to our great Wal-Mart partnership. May you continue to do good always, putting our customers and their needs first.

The next day, I visited our fine stores in Troy, Louisiana, Hannibal, and our newly relocated Store #25 in Mexico, Missouri, which had recently been expanded to a 68,000-foot store. All are really outstanding Wal-Marts with wonderful, caring Wal-Mart associates who are doing one great job of serving their customers and their respective communities. The District Manager for these stores is Clara Slater who is doing such an outstanding job directing around 9 or 10 of our good Wal-Marts in Northeast Missouri. It seems only a few years ago that I first met Clara (probably 12 years) in Moberly, Missouri, where she was the Department Manager for our Hosiery/Lingerie Departments. I remember well reviewing our Lingerie Department and asking her what her best sellers where in the Ladies’ panty section. She impressed me then by her knowledge and capacity, by getting out her order books and showing me that she ordered regularly by rate of sale; she knew and took pride in what she was doing. Soon, we were discussing how to develop a promotion and a VPI program on her best number at that time – a 100% full-cut cotton brief. She did it well and continued her journey through Wal-Mart as an in-store Assistant and Manager at Macon, Missouri, until today, she has become one of our most respected and capable District Managers. My hat’s off to you, Clara, and your entire Wal-Mart team. We’re very proud of you all.

In fact, in thinking about the development of our Company, I’m so pleased to see us beginning to recognize and promote women to responsible positions of management throughout Wal-Mart. For years, retailing management was considered the exclusive province of men. That’s not so today. Wal-Mart’s Executive Committee realizes that we have a tremendous pool of future management talent in the ranks of our women associates and has made the commitment to train and develop them to the fullest.

I’m convinced that our Wal-Mart women associates have unlimited opportunity to advance and assume top management responsibilities in our Wal-Mart organization. In my opinion, there is not a single management job in our Company that can’t be handled effectively by women who have the training, determination, ambition, and capacity to do it.

Let me visit with you about another very important subject – 100% customer satisfaction. It is so very important for our continuing success as a company. We’re so fortunate that our customers believe in you and Wal-Mart as they do. I hear it constantly from them as I make my store visits. They appreciate your friendly attitude, your caring, and willingness to help them with their needs, over and above. They tell proudly they just enjoy shopping in our stores period, because of you and the way you carry out our philosophy of: RULE #1 – THE CUSTOMER IS ALWAYS RIGHT and RULE #2 – IF THE CUSTOMER HAPPENS TO BE WRONG, REFER TO RULE #1.

What a franchise we enjoy in this retailing world today with our customers who, for the most part, feel it is “their store” and know they will be treated fairly, honestly, and with respect. We must not lose this valuable franchise. We know we must constantly teach and reinforce the basic principles with our associates to cause it to continue.

Again, let me quote from some material our Director, Bob Kahn, sent me recently on this most important subject. This mostly was material Bob wrote in his newsletter back in 1968 which I probably read and believed even them, which is as right today for us as it was 20 years ago.

Principle: “No retailer (except auto dealers and some appliance stores) ever make a profit on a transaction, they only make a profit on a customer.” I would add that a dissatisfied customer is generally lost forever to us and probably with a host of their friends as well. It is a proven fact – it costs five times more to gain a new customer as it does to retain a current customer.

Statement 1968: (This I believe and our Company’s success has proven it to be so.) “The introduction of the computer in retailing is tending to produce the myopic merchant of the future who in the long run must lose our to the fundamental merchant of the past and his progeny.” Let all of us in Wal-Mart continue to think and believe we’re merchants, even if we do choose some occasional losers, such as our outstanding President Dave Glass with his key chains and our head merchandiser Executive Vice President Bill Fields and his Crackling Oat Bran Cereal. I’m being facetious and jealous probably for, as of now, David and his key chains are ahead of my $1.00 can of peanuts. But, the race isn’t over. The truth is, if we’re aggressive and merchandise driven with all our associates throughout Wal-Mart, we’ll make mistakes, but on balance, we’ll win because we learn and correct.

Principle: “The nicest sounding word to any person is his own name, especially in this day when computers are making numbers out of all of us. You know this; I know this.” My associate friends, are we doing all we can in Wal-Mart, Sam’s, dot Discount Drug, in calling our customers by their name? Let’s do it. You alone can decide best how to in each of your stores. “Let’s go for it” and every opportunity, whether it be from a check, credit card, membership card, or simply by introducing yourself and saying, “Your name is what?”, “Thanks for trading with us”, or “Please come back.” I’m sure we can do this much better than we have.

Principle: “Little things make big impressions.” So, get your people to do the little things for your customers. Bob goes on to tell about his wife, Patty’s visit to two food stores the same afternoon. Each time she forgot to take in a returnable bottle on things that had a 5 cent refund. The carryout clerk from the first store saw the bottle in the back of the car and did nothing. The second clerk asked if she wanted to turn it in, then took a nickel out of his pocket and gave it to her, and took the bottle back to the store. The point it, his wife regularly thinks better of the second store, but the real difference is in the second person. What a lesson for all of us, and makes and even stronger case for us to believe and practice: “Our People Make the Difference.”

So long, my friends, for now. This is probably too much, but maybe one idea will help us all to do better and cause our wonderful customers to continue believing in you as a person as well as in the fact that Wal-Mart truly believes and practices “THE CUSTOMER IS #1.” Good luck.

--Sam