A Business Based on Belief in Loyal Customers

William W. Grainger founded his company in Chicago in 1927. He wanted to provide an efficient solution for customers who wanted to access a consistent supply of electric motors. At that time, Grainger published what he called The MotorBook. The MotorBook was more than just a sales catalog for electric motors, it was a complete resource for anyone wanting to learn about electric motors—how they worked, comparisons, applications, and specifications. The MotorBook was free to customers, prospects, and even competitors; Grainger was willing to freely share the information he had gathered. Grainger believed that anyone who had an interest in electric motors would eventually become a loyal customer. His competitors would not think of sharing their intellectual capital, while Grainger gave it away in his MotorBook.

Today, W.W. Grainger is a Fortune 500 company and has more than 600 locations throughout North America. Grainger is focused on helping its customers complete their jobs successfully by providing them with the right product at the right time with the right information.

The MotorBook is now known as the W.W. Grainger Catalog. Contractors, facility operators, and many others depend on the Grainger Catalog as the most accurate source of information for the materials and supplies that they buy.

The W.W. Grainger Catalog contains information on electric motors, casters, compressors, industrial supplies, and lighting fixtures, material handling, safety and emergency preparedness equipment, and several other product categories. The catalog offers more than just information on the brands that Grainger sells. The catalog provides detailed specifications and product applications for all brands.

Many companies provide detailed information on their own products in their catalogs or on their Websites, but Grainger's information goes much further: It provides a detailed guide of industry standards. Grainger's catalog is a valuable resource whether or not you buy anything from Grainger. The Grainger philosophy of keeping customers well informed and well equipped extends beyond just Grainger's customers: Grainger is freely providing information to everyone.

Grainger's philosophy focuses on providing value. Its philosophy demonstrates focus on loyal customers. Grainger believes that anyone with an interest in electric motor and industrial supplies will eventually become a loyal customer. It is not waiting for the prospect to buy something; it provides value before the sale. Grainger believes in and sees loyal customers because of its focus on loyalty. Grainger has grown into a multi-billion dollar company by focusing on customer loyalty. It is constantly getting new customers by focusing on its existing customers.

Contrast W.W. Grainger to a company that is focused on getting new customers. This other company tells its prospects that once you become a paying customer, you will have access to all the company's resources. This company is not focused on customer loyalty; instead, it is using the benefits of being a customer to attract new buyers. Its focus is really on getting new customers.

The year 2001 proved challenging for W.W. Grainger. As the economic climate in North America turned progressively weaker, its sales declined 4.5 percent. Despite this decline in revenue, Grainger had an increase in profitability. It enjoys the benefits of customer loyalty because it focuses on loyal customers.

We have discussed how we think about our businesses and ourselves, and how we think about our customers. We have also discussed how our minds work relative to objectifying our deepest thoughts. Equally important is how our customers think about us.