ACCM Show Daily: Keynoter Crutchfield’s “Touch of Class”

May 10, 2006 4:35 PM  By

Chicago–When Ramesh Ratan, senior vice president of the Direct Marketing Association, introduced yesterday’s ACCM keynote speaker, William G. Crutchfield Jr., he captured the essence of Crutchfield’s longstanding success as an entrepreneurial direct marketer: “That personal touch was a real touch of class.”

As founder of Charlottesville, VA-based consumer electronics merchant Crutchfield Corp., Crutchfield, 63, described how at 13 he built the first stereo in Virginia. Fast-forward to 2006, and Crutchfield is a $250 million multichannel marketer with 530 employees. And as Bill Crutchfield stressed throughout his address, titled “Building a World-Class Customer-Centric Organization by Creating an Exceptional Organizational Culture,” respect toward everyone involved with the company is the key.

“Senior leadership must embrace the core values of your organization—integrity, respect, communication, and excellence,” Crutchfield said. He cited Enron as the biggest example of a company that failed to do so. “Had senior leadership lived by those values, Enron would’ve been a viable business today. Never compromise your core values for short-term gains.

“Human-resources people must be front-line champions of the culture,” Crutchfield continued. “Our interview process is very extensive, and they can usually root out who will be receptive to our culture.” In 32 years, “we’ve never had a layoff.”

Respect among co-workers instills a work environment that fosters dignity, Crutchfield said. “If my office is air-conditioned, everyone should have the same,” he said. “Our warehouse is air-conditioned.”

Limiting employee turnover ensures that an “enormous amount of institutional knowledge stays with the company,” Crutchfield said. “If you don’t give full attention to your operations, customers won’t be happy. The number-one ingredient in my successor will be that person’s adherence to our core values.”

In fall 1974, having noticed that no one was trying to sell stereos through the mail, Crutchfield founded his business with $1,000 in capital and a $25,000 loan from a friendly local banker. His first catalog wasn’t a rousing success; neither was his second. He asked his customers what problems existed in the catalogs.

“Customers said the catalogs lacked information, and they didn’t understand it,” Crutchfield recalled. “The culture of the company was me. I didn’t hire my first employee until after the third catalog.”

Early on, Crutchfield allowed customers to call him 24 hours a day. Some of those late-night conversations were memorable: “A guy called me at home and said, ‘Hey, man, I’m doing drugs in my van, and I can’t get my tunes to work.’’’

Crutchfield implemented a self-imposed “drop dead” date for turning around his struggling business of Jan. 1, 1975. Obviously sales picked up prior to the deadline. But Crutchfield Corp. encountered a sales decline in 1982-83 due, in part, to salespeople pushing items that benefited the customers less than they did the sales team. That was when he codified a stringent set of beliefs for his company.

“And there had to be a faithful adherence to those beliefs,” Crutchfield explained. “What was wrong at the time was the culture of the company had changed. Our belief system had gone awry.”

Crutchfield said a company must exceed its customers’ expectations and maintain a passion for providing them with excellence and innovation. Sales advisers are trained for three months before they are allowed to take a phone order. “We have master sheets for 4,000 vehicles and 2,000 pages of nonproduct information on our Website,” he added.

“We don’t overpromise our service,” Crutchfield continued. “When we do make mistakes, we apologize and make restitution immediately. We had the perfect storm this past Christmas, and some 2,000 customers didn’t receive optimum services. I wrote them all personal letters and sent out a total of $55,000 in gift certificates.”