The Relentless Pursuit

In June 2001 there was an article in Fast Company magazine about a company called EMC (“Customer Service: EMC Corp.,” by Paul C. Judge). It’s not a household name; you’ve never heard of it unless you’re in the information technology business. You’ll remember it after you hear this story.

In 1988, its operations executive, Mike Ruettgers, found himself traveling the country and apologizing to the company’s customers for poor performance. Things weren’t good, either for the company or its customers. The company had sent faulty products to its customers, and the customers weren’t happy, to say the least. According to Fast Company magazine, Ruettgers was an “executive punching bag,” traveling from customer to customer apologizing for EMC’s problems. He felt he had hit bottom when he met with a customer who broke down and cried as he related that he would probably lose his job as a result of the EMC problems.

As a result of his travels, Ruettgers took a radical step. He offered his unhappy customers a choice. They could either choose to take a replacement product manufactured by EMC or take a comparable product manufactured by their leading competitor, IBM, and paid for by EMC. Yes, you read that correctly. During one quarter of 1989, EMC actually shipped more IBM products than it did its own!

Focusing on improvement of its own product, EMC found that many customers were willing to give it another chance due to its relentless quest for quality, its “fanatical devotion” to service. It was coming back, and coming back in droves. According to Ruettgers, “What that proved to me, to all of us, was that when a customer believes in you, and you go to great lengths to preserve that relationship, they’ll stick with you almost no matter what. It opened our eyes to the power of customer service.”

Does it work? Let’s see. In 1988, EMC had annual sales of $123 million, 910 employees, and losses of $7.8 million. In 2004, annual sales were over $8 billion, it had over 20,000 employees, and profits were over $830 million.

By the way, Michael Ruettgers is now the chairman of the board of EMC.