The other day, I walked into Costco, scanned my membership card, and expected to make a beeline for the produce section.
Instead, I stopped for a minute to chat with the Costco employee in the entrance, who commented on my 20-year membership.
I believe his words were, “Thanks for trusting us for so many years.”
In reality, Costco makes that trust easy. The company goes out of its way to consistently boost member services and add value, all while keeping prices as low as it possibly can.
And there’s one specific Costco feature that makes me feel especially valued as a long-term member.
Costco stays open to member feedback
Costco has made it clear that it doesn’t just want to be a cheap grocery destination. The company has invested in a number of services designed to add value for members.
At Costco, you can fill prescriptions, get your tires changed, and book a vacation, to name just a few bonus services. And lately, the company has invested in technology designed to improve the member experience, specifically in the context of checkout.
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CEO Ron Vachris called this out during the company’s most recent earnings call.
“As a result of our investments in technology, the commitment from our employees to use this technology to deliver a great member experience, we are seeing a significant improvement in the speed of checkout,” he said.
But while Costco has a good sense of the improvements members want, the company is also extremely open to feedback. In fact, Costco encourages member feedback in a number of ways.
First, the company has physical suggestion boxes that are typically located near warehouse club exit doors or by the membership area.
Secondly, Costco has an online form members can fill out offering suggestions on what to improve.
If there’s a Costco product you miss because it’s been discontinued, you can submit that feedback and ask the company to bring it back.
While Costco can’t always accommodate requests, since products are sometimes removed due to sourcing issues, long-term Costco members insist that the company has, in fact, brought back select items upon request.
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A smart move to make members feel valued
During its most recent quarter, Costco took in $2.19 billion in net income and $1.37 billion in membership fee income.
The company also boasted a membership renewal rate of 92.2% across the U.S. and Canada.
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Clearly, membership fee revenue drives a lot of Costco’s profits. It also allows Costco to continue offering such low prices, since the company doesn’t have to make as much money on each individual item it sells.
Given this model, it’s smart of Costco to actively solicit member feedback and actually act on it when possible.
“Costco’s willingness to actively solicit member feedback is part of why its loyalty is so difficult for competitors to replicate,” said RTM Nexus CEO Dominick Miserandino.
“Membership businesses live or die on whether customers feel the company is still earning the renewal every year. Asking members what would make stores better reinforces that Costco sees the relationship as ongoing, not transactional. And that can be just as important as price when it comes to retention.”
So the next time you’re shopping at Costco and see a suggestion box on your way out, it pays to let the company know what you’re thinking.
Similarly, if something about your shopping experience doesn’t meet your expectations, whether it’s a missing product, a quick expiration date, or a new item whose quality seems questionable, let Costco know.
Since member feedback is anonymous, there’s nothing to lose. But there’s also a good chance Costco will do what it can to improve.
Maurie Backman owns shares of Costco.
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