Kendra Reichenau, CEO, Heartland America

Heartland America is an omni-channel business. We started in 1985 in Chaska, Minnesota, strictly as a catalog business, but as all good businesses do, we’ve evolved. We continue with the catalog business, but we’ve also opened up a digital platform, both on the web and through Marketplace, including listings on Amazon and Walmart.

It’s probably never just one thing, right? It’s a combination. One is a continuous strategy of providing good value to the customer, the right kind of quality-value-product relationship. I’d say that’s number one: our commitment to providing value.

The second, probably the biggest thing, is really our love of the customer and meeting them where they’re at. Some customers are still comfortable writing checks and putting them in the mail, while others want to buy online or through Marketplace. We’ve evolved, but we’re also meeting customers where they feel comfortable shopping, and how they feel comfortable shopping.

There are so many choices today on where you can spend your money. Maybe 20 years ago you walked into a mall with $100 and you were competing within all the stores in that mall. Now you’re competing against all the stores in the mall, plus all the online stores, plus all the Marketplace options. You really need to listen to your customer, love your customer, and be grateful that they picked you, while continuing to look for new customers, but also loving the ones you already have.

It’s going to sound a little crazy, but many catalogers quit accepting mail orders; we still accept them. That seems counterintuitive to evolution, but there’s still a customer who likes the process of placing their order on the order form and writing a check. In some ways, technology has worked against our customers, because they’re truly afraid of being scammed. They hear a lot about online scamming and credit card fraud, so they feel more comfortable placing orders in a way that feels familiar.

The second strategic decision, also counterintuitive, is that you can call us on the phone seven days a week to place your order. A lot of our customers have questions that live chat or online simply doesn’t solve. We educate our salespeople and our customer service people, and we treat our customers with kindness and patience, so that when they call with questions or want to order something, we’re there to help them have a successful transaction.

We get roughly 30,000 calls a month, and more than 2,000 customers rate us after each call, a statistically meaningful sample. Our customers score us 4.6 out of 5, based on whether we answered the call, resolved the issue, and whether they’d recommend us. Given that we skew toward an older customer base, consistently delivering a 4.6 or higher is remarkable.

We also product-test every item we sell. We sell closeouts and end-of-season products, but we only select items with a four-star customer review or higher. Our product scores run around 4.6 on Bazaarvoice. Because we’re vetting quality up front, our return rate sits between 2.6% and 2.8%, which is unheard of for a catalog and online business. We ship next day about 90% of the time, and the remaining 10% ships the day after, so orders typically arrive within a few days and tracking information is reliable.

Well-known names like Sears, Spiegel, Service Merchandise, and Fingerhut have shut down, while The Sharper Image filed for bankruptcy in 2008 before relaunching in 2010. Some catalogers that have gone out of business either didn’t keep up with quality, or moved to call centers focused on shortening call length. The industry average call is around four minutes; ours is eight, sometimes down to seven, but we’re spending that time making customers feel heard, not rushed. When you’re a little older, not having to press one, then two, then three, you press one and you get us, greeted with kindness. It’s really important that a real person, not a robot or AI, can answer your questions.

We’re actually still using a lot of AI and automation, through better analytics, AI-driven optimization, and digging into and streamlining some of our more manual processes. That’s exactly what allows us to preserve the personal touch. We’re taking the best of the technology so we can focus more on the human element. We’re doing both; we’re just doing it a little more discreetly. All of our departments have been able to reduce their reliance on outside vendors by building internal solutions with the help of AI. Our philosophy has always been simple: use technology to improve the things behind the curtain, not to create barriers between us and our customers. We’ve evolved our operations continuously over the last 40 years while maintaining the personal connection that has defined the brand since the beginning.

It comes back to what we’ve talked about. We vet the product first, so we’re confident that what we’re shipping is what you’re buying. We provide a lot of product knowledge, whether it’s on our website or over the phone, where we can walk a customer through it. The result is that our customers are happy, and that shows up in our Trustpilot score of 4.8, and a lot of these awards are based on Trustpilot ranking.

That’s a striking number, because most people write reviews to complain. Think about it: are you more likely to write a review after a five-star experience, or when you’re frustrated enough to leave a one, two, or three? The saying goes that for every good experience you tell two people, but for every bad experience you tell ten. To consistently score 4.7 to 4.8 on Trustpilot, with tens of thousands of reviews, from an older customer base, is genuinely remarkable, and we’re proud of that.

Probably yes and no. I think it’s seeped into being kind and doing the right thing. If you’re playing the short game, sure, you could take advantage of a customer. But if you’re playing the long game, you need them to come back. Lifetime value is really one of the ultimate measures of success. We need to be kind, and when we don’t do the right thing, we suffer for it. I think the team understands that, and the more success we have doing the right thing, the more we build on what’s working.

I’m genuinely excited about AI and how we’re using it, because it allows our team to do more. Because we’re a small, flat organization, people can’t always get big promotions every year, but AI lets them try new things, test new approaches, and deliver more for the customer in ways we simply couldn’t before.

I was recently at a dinner with a group of executive women, several of whom work at large companies and were anxious about AI. I’m not concerned. I think we can finally compete with bigger companies, because we all have access to the same technology; it’s just about who can use it faster. Because we’re small, we’re scrappier; we can just start using it, without the big trainings and big rollouts. Our marketing team has embraced it and is now delivering two to three times more content with the same headcount. We view it as a booster and a competitive advantage, and I’ve never been more excited about technology’s ability to actually help the small-business person. I think it’s a huge equalizer.

I’d like people to know there are smaller companies out there genuinely delivering on their promise, whatever that quality-value-service relationship looks like, so give us a chance. It’s important to support small business, to let a company know when you’ve had a good experience, and to be loyal, because we’re investing in you, and it’d be nice to have that invested back.

If you find some of the bigger marketplaces overwhelming or hard to navigate, there are other choices out there. Spending a little time getting to know some of these other companies might genuinely surprise and delight you.

There have also been real cost pressures lately: tariffs, gas surcharges, and increases from UPS, FedEx, and postage, expenses that are largely outside our control, and that we probably navigate with less sophistication than some of the larger players. Even so, we’ve worked to hold our prices relatively steady, because we know our customers are budget-conscious and we want to keep serving them well through these conditions. That’s exactly why we appreciate every customer who walks through our door, however they find us. We’re grateful, and if you want to feel valued and appreciated, give us a try. We have a great appreciation for our customers choosing us over all the other options out there. We show our appreciation every day. That’s why we win all these unsolicited awards.

Kendra’s answer on how we adapted was almost a little modest, in a lot of ways we didn’t change what our customers wanted from us. But to her credit, we adapted a great deal in ways you can’t necessarily see. We focused on the efficiency of the business so we could keep giving our customers what they wanted. Many of our catalog competitors got excited about moving online because it looked more efficient, and tried to push their catalog customers there. We didn’t. Our customer likes to shop the catalog, likes to call, likes to mail in a check; they don’t trust credit cards or online shopping. We are building a separate digital audience alongside that, but the reason we made the bridge successfully is that we never tried to force our existing customers to change. We focused instead on the efficiencies that let us keep offering that level of customer service while still running a profitable business.