L. L. Bean: Where do we go from here?
L Bean continues to reap the rewards of their hard work. L.L Bean was able to hire and retain top talent for all positions by paying above average salaries and wages to its 1400 employees. In doing so, they were able to push quality and their corporate vision to the employees while ensuring they were the right candidates for their respective roles.
It seemed success was infinite for L.L Bean, however, in 1981, things began to change. Looking towards future growth, L.L Bean faced a situation where they felt the need to increase their benefits provided to customers, employees, stockholders, vendors and their community. According to projections, L.L Bean was set to grow at a rate above 20% per year between 1981-1985. However, upon hiring Norman Poole as vice-president of Finance, it became apparent that the more realistic numbers were an 11-12% growth rate. Unfortunately this means, that the initial forecast was a significant overshoot in terms of the real potential success of the company and that the growth may not provide the intended benefits to the stockholders.
This does not mean however, that it is all downhill from here. Poole was confident that by expanding to new geographic areas, developing more specialized catalogues and using a toll-free phone line and increasing the advertising budget/renting more untested lists, the company could succeed in reaching the 11-12% growth intended for the next 5 years. With these possible tactics, it was still a priority to ensure that the company’s vision of maintain quality and top notch customer service.
With the new tactics available to Gorman and L.L Bean, Gorman was able to summarize a list of questions to look at the key issues regarding his business. The following section will provide answers to Gorman’s questions.
“Given constraints, can we achieve sales projections through list acquisition and activation alone?”
It is not advisable to use this course of action for the simple reasons that since the rental lists are decreasing in growth, and the new buyers’ growth rate also continues to fall, relying solely on existing customers and the decreasing levels of new clients will not suffice to achieve the sales goals for the upcoming years. In addition, the rental lists face increasing levels of duplication of names meaning that the same person would be contacted multiple times. This would waste both time and money trying to sort out the lists and since these lists are shrinking in size, it is not advisable to proceed in this fashion.
“Can we achieve sales growth while maintaining and enhancing product quality and service?”
Service quality is determined on how the staff dealing with customers relate and treat each individual customer. Therefore, it would be advisable to have a well-planned and comprehensive HR training and development program to push the focus on the satisfaction of the customers rather than just the speed of transactions. Although speed is an important...