Lets take a brief look at Tesco: why data driven marketing and product management is not enough
Tesco has been heralded by the marketing and CRM gurus (mostly marketers and those selling CRM systems) as the poster child of how to thrive by taking a data centred, technology enabled, approach to doing business. So why is it that Tesco is in real trouble – losing customers, losing market share and issuing its first profit warning in decades? Customer Service and the Customer Experience. Here is what The Grocer says (italics are mine):
“Tesco has vowed to create 20,000 new jobs in the UK over the next two years in a bid to improve customer service……..chief executive Philip Clarke admitted in January that standards of service and of the overall customer experience in Tesco stores had slipped below the levels he expected. He claimed Tesco stores had been “running hot” for too long, with staff over-stretched and not sufficiently well trained enough.”
Listen to what Richard Shapiro writes in the Welcomer Edge
There is a new book on the market called The Welcomer Edge. it is written by an authority on customer service and retention. I found value in this book and I want to share it with you as it illuminates the ‘the road less travelled’ when it comes to cultivating customer loyalty: cultivating loyalty through the personal touch.
Wondering what I am getting at? Business is game of people: people working together to create value for people (customers, employees, suppliers, shareholders, the community..) whilst being mindful of and outwitting other people (the competitors). In this post, I pointed I shared RD Laing’s quote:
“Men can and do destroy the humanity of other men, and the condition of this possibility is that we are interdependent. We are not self contained monads producing no effects on each other except our reflections.We are both acted upon, changed for good or ill, by other men; and we are agents who act upon others to affect them in different ways”
Why is it worth listening to Richard?
From where I stand, Richard gets it totally and provides a new language/framework to think about the situation at hand. Language and frameworks make all the difference – we are ALWAYS living out of / coming from some kind of framework, usually from some ancient philosopher who died centuries ago.
What does Richard say in the Welcomer Edge?
In his words:
“How can we re-introduce the person touch in business? Today, most service interactions tend to be robotic, and it’s not because of the customer. The salesperson or customer representative frequently does not make an attempt to make a personal connection or take an interest in the prospective purchaser as a person.”
“…what I learned then, every business should learn now: Customers are people first and consumers second.“
“There is a particular type of staff person who draws new customers to a business and keeps them. I call this type the “welcomer”. Welcomers create a relationship with new customer that can last a lifetime. People are so delighted to do business with welcomers that they will have little reason to change allegiance to the company’s competitors.”
What are the central points that Richard is making in The Welcomer Edge?
He is making clear that which is obvious as common sense in ordinary day living and which is anything but obvious when you examine the way businesses operate. In Richard’s words:
“…when a customer walks out of a store due to a lack of service, that organisation has just killed its goal of generating repeat business. Without a consistent flow of repeat business, no company can survive in the long term.”
Do you think he is going over the top, allow me to share my Tesco experience with you. I went to shop at Tesco, about a month ago, only to walk out in disgust empty handed. Why? Because of the poor service. There were not enough cashiers so I was ‘forced’ to self-serve only to find that after scanning 20+ items the system would not complete the transaction. Why? Because I had purchased a DVD that had a 18+ rating. The system told me to wait and someone would come to help me. I waited several minutes, nobody came and so I left over £100 of shopping there and walked out in frustration vowing never to return. And I have not returned.
Richard makes a bold claim that I agree with, in his words:
“Welcomers are so important that a company that finds, hires, and rewards them has a distinct advantage over a business that does not.“
When I read that sentence I think Zappos (customer care lines staffed by welcomers who create that personal touch). I think about Richer Sounds in the UK, a hi-fi retailer. I think about the transformation Howard Shultz brought about when he returned as CEO to take control of a failing Starbucks which had lost sight of why customers came to Starbucks:“People come to Starbucks for coffee and human connection.”
Final thoughts, recommendation and an invitation
Final thoughts
Business is ALL about people. It is time to get that many if not most of us feel that we live in an indifferent world especially when it comes to interacting with organisations and the people who staff them. Customers are human beings and as such they are a social beings who have a deep need for relatedness and when this is not present most of us pay a big price. Welcomers, whilst few and far between in the business world (partly because they are not welcomed / acknowledged / inspired / rewarded appropriately) are the difference that makes the difference when it comes to service businesses. Welcomers naturally & automatically reach out, connect and unlock the gate to the human heart inside of customers. Richard talks about many welcomers and one in particular stood out for me, Javier, this is what he says about his role:
“..when I worked at the deli counter, my job wasn’t just to slice cold cuts and cheese. It was to put a smile on someone’s heart.”
If you have any serious interest in cultivating customer loyalty then you have to get the service interactions right. That means recruiting a context that: attracts Welcomers to you (to join you as members of staff); allows them to do what they do naturally – be great with people; acknowledges and rewards their contribution so that they stay with you.
Recommendation
How to end this post? Above and beyond the valuable framework and language that Richard provides in The Welcomer Edge there is a certain quality – a human quality – that I really like about this book. On my shelf it sits next to Tony Hsieh’s Delivering Happiness, Chris Zane’s Reinventing The Wheel and Howard Shultz’s Onward. If you are serious about solving the customer loyalty paradox then I recommend reading The Welcomer Edge along with the others that I have listed here.
Disclosure: Richard sent me two signed copies of The Welcomer Edge. I am tempted to write that this did not affect my sharing here. And I know that I cannot say that because we are all affected by the kind or unkind acts of our fellow human beings whether we recognise that consciously or not. All I can tell you is that it occurs to me that I have shared honestly based on the merits of the book and the value I have gotten out of it.
An invitation
If you have subscribed to The Customer Blog and are keen to read The Welcomer Edge then please email me ([email protected]) with your address and I will post the spare signed copy of The Welcomer Edge. Please note that I have only one copy to share so if you want it then email me fast: when it’s gone, it’s gone!
I’m glad to read that Tesco is working to regain that “magic” they had years ago. I interviewed Clive Humby 8 years ago about how they used analytics to increase shopper loyalty. But the phrase that stuck with me was “every little helps.” My impression of Tesco was they had balanced left-brained analytics (CRM) with right-brained in-store experience (CEM).
There’s a lot of hype right now about big data. I think there’s tremendous power in data/analytics, but fear that companies will forget the human side. Richard’s book describes one way that companies can add the personal touch. I’ve read it and recommend it too!
Hello Bob
My take on Tesco- they found a trick that worked and they focussed on working that trick! That is the human tendency – find and focus on the one thing and in the process that we exist in systems and systems exist through the mutual interaction of the parts.
Put differently the data/analytics (through Tesco ClubCard) worked so well that Tesco ignored rather than complemented and amplified that advantage with / through great customer service. On the contrary, Tesco cut back on the service in the stores by cutting back on the store staff. Why invest when the data/analytics/coupons are bringing in the customers?
We can learn a huge amount through the following:
the yin-yang symbol that emphasies the complementarity of the “male” and the “female”. This is needed for a system to be in harmony over the longer term, else it disintegrates – takes some time and it does disintegrate; and
“the middle way” favoured by Buddhism – this is all about balance. Balancing the short term with the long term. Balancing hard (data, metrics, analytics, IT) with the soft (people, conversations, human touch, love, compassion..). Balance between creating value for customers and value for the stakeholders in the business. Balance between the needs/reward of shareholders and that of the people who create that value through their hard work – employees.
The issue is that in the West we really are poor at this. Poor at integrative thinking/living – which is simply saying that we are poor at living in harmony with all the other players in the ecosystem in which we are embedded and which gives life to our living, our work and our play.
Hope you are well Bob and as ususal I enjoy reading and responding to your comments, your thinking on the matter at hand.
Maz
I think yin/yang is a great way to describe the balance that’s needed between CEM/CRM, people/analyics, etc.
Or customer value. In conferences I’ll sometimes ask the audience to define “customer value.”
* If it’s a CX or loyalty conference, customer value is what the customer gets from the company. (yin)
* If it’s a CRM-type audience, most define customer value as what the customer is worth to the company (revenue/profit). (yang)
Of course, both answers are correct. I think the top companies are constantly working to increase value delivery (as customers perceive it), while also making sure they reap the rewards on the top and bottom line.
But in a world where companies are focused on short-term business performance, it takes a special leader to maintain the balance between value delivery and extraction.
Maz, your comment about yin-yang inspired me to write: CRM and CEM: Managing the Yin-Yang of Customer Relationships.
Thank you!
Hello Bob
I am delighted that I have been a source of contribution to you. And I have enjoyed reading your post.
I acknowledge you for the contribution that you make.
All the best
Maz