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August 28, 2004
The resurgence of Coach
In the 1990s, Coach was a company in decline. Its conservative business approach (stay insular and don't innovate) may have helped short-term profitability, but it was sinking the business. Same-store sales were dropping nearly 40 percent.
In 2000, it finally shifted gears. Open up. Let customers help make company decisions. Talk to customers. A lot of them.
Coach annually interviews at least 10,000 customers individually (primarily by telephone) to keep tabs on how the brand is faring in their minds. During the company's transformation, clerks intercepted shoppers to ask about specific products, whether they preferred chrome or nickel, or if they thought the length of the strap was right. Coach also tests its products carefully in a limited number of its 174 stores in North America six months before a product comes out. This way it can gauge final demand and respond by either ramping up or slowing production.
Since 2000, Coach's large-scale application of two customer evangelism tenets (customer plus-delta and bite-size chunks) have contributed to 25 percent annual growth.
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