After leaving school my first encounter with the world of the employed was joining J.Sainsbury Ltd (A UK supermarket retailer for our American readers) in the high and mighty position of trainee manager (another term for a general dogsbody). Well 5 years later having climbed the management tree, I had been totally indoctrinated in the organisation and truly believed them to be the best retailer out there.
Their management training and mentoring was second to none, and I a lot of what I learned in that time I still carry with me today. Up until about 5 years ago I still shopped with Sainsbury’s believing their food to be the best and freshest. Then one day I happened on the Tesco website and tried out their internet shopping service. 12 months down that road I was hooked on it (as I am with Internet banking, flights and accommodation today).
The point to this little journey into my past is that about 3 years ago I caught the news and was saddened to see that the company I once held in such high regard was on the floor issuing a profits warning, with its 6 months profits running at just over a third of same period of the previous year (at the time they were down £241 million sterling!). On top of this they had lost many of their top managers and staff because they couldn’t afford to keep them. Companies go by the wayside when customers change and they don’t (and the pain is on the bottom line).
One of the key reasons for Tesco's phenomenal performance at the time was that they had been first to market with a full loyalty card programme; Sainsbury’s had followed but forgot one small thing, asking the customer if they can communicate with them! They didn’t and couldn’t. They had missed the boat on internet shopping too. They simply didn’t change quickly enough when all was changing around them.
Well there is good news to this story. Sainsbury’s re-invented the way they did things. They took the lead in the UK supermarket social media battle by being first to market with a Facebook page full of offers and useful advice http://www.facebook.com/sainsburys. They opened new convenience stores going back to their roots. They put in place a new pricing scheme. They piggy backed onto the largest loyalty card scheme (Nectar), they invested in training their staff and they rewarded their staff for their hard work with big bonus’s of £620 each.
And what has this resulted in? Sainsbury’s have just reported Christmas trading growth whilst Tesco reported a fall. How did Sainsbury’s do it? There was nothing complicated, they got back to basics. They started selling great products again, they started giving excellent service again, they focused on attracting new customers by marketing well and they focused on retaining their customers (go to http://online.wsj.com/article/BT-CO-20120112-703569.html)
All in all, a great turnaround (and I’m back to shopping with them as well when I’m back in the UK).Our industry is changing rapidly (just as the world of supermarkets has). The fact is that if you don’t change but your customers do, then what happened to Sainsbury’s before they turned it around could happen to you.
Our customers are changing, the products are changing, they are using new mediums for pricing like Truecar.com (whether you like this company or not it’s getting a lot of press and traffic), they are using Facebook and Twitter for offers, they are using and embracing technology and they are voting with their custom too.
A cautionary tale to conclude this story; I was at a friend’s house on Saturday evening for a party. Don and Donna were the hosts and as I work in the car business it’s pretty normal for somebody to bring up a car story with me. This time it was Donna and she mentioned that she had used a local dealership for service as she had purchased her car from them but would never use them again.
I was interested to hear her story. Between the jigs and the reels, the dealer had quoted her $1100 to repair her car and suggested to her that she traded-in her car instead, it might save her money. Donna liking a second opinion took her car elsewhere before even considering trading her car; the issue was resolved quickly at the second dealer and the car cost just $250 to repair and service.
Donna has never received a contact from the dealer she purchased her car through, never. She swears that she will never go back to them because in her mind they tried to rip her off (this may or may not be the case).
I know the owner of the business and I know he would be mortified if he was made aware of this (this dealer has an underperforming service operation and the whole business is overly reliant upon sales). The dealer has a BDC to stay in touch, he has systems and process employed that should have followed her up after her service quote. The systems obviously are not working because if they were then Donna would have received a call or a contact from them and they would have had an opportunity to turn things around. This is 2012 in the USA.
This means that the business has got to change the way they are doing things otherwise it’s likely that they will suffer as they lose they will lose customers. They are going to need to make some changes to address their weaknesses. The Sainsbury plan will work for them if they embrace it. As the dealer is selling great products they have a simple 3 step plan to implement to turn things around;
1. They just need to start giving excellent service again by focusing on customer service
2. They need to focus on attracting new customers by marketing well and embracing new mediums whilst continuing their current activities
3. They need to stay in contact with their current customers to retain them by making their BDC work more effectively and making sure that all of their customers and prospects are kept in touch with.
Nothing complicated, just doing things better than they currently do and raising the customer service bar a tad higher.
Their management training and mentoring was second to none, and I a lot of what I learned in that time I still carry with me today. Up until about 5 years ago I still shopped with Sainsbury’s believing their food to be the best and freshest. Then one day I happened on the Tesco website and tried out their internet shopping service. 12 months down that road I was hooked on it (as I am with Internet banking, flights and accommodation today).
The point to this little journey into my past is that about 3 years ago I caught the news and was saddened to see that the company I once held in such high regard was on the floor issuing a profits warning, with its 6 months profits running at just over a third of same period of the previous year (at the time they were down £241 million sterling!). On top of this they had lost many of their top managers and staff because they couldn’t afford to keep them. Companies go by the wayside when customers change and they don’t (and the pain is on the bottom line).
One of the key reasons for Tesco's phenomenal performance at the time was that they had been first to market with a full loyalty card programme; Sainsbury’s had followed but forgot one small thing, asking the customer if they can communicate with them! They didn’t and couldn’t. They had missed the boat on internet shopping too. They simply didn’t change quickly enough when all was changing around them.
Well there is good news to this story. Sainsbury’s re-invented the way they did things. They took the lead in the UK supermarket social media battle by being first to market with a Facebook page full of offers and useful advice http://www.facebook.com/sainsburys. They opened new convenience stores going back to their roots. They put in place a new pricing scheme. They piggy backed onto the largest loyalty card scheme (Nectar), they invested in training their staff and they rewarded their staff for their hard work with big bonus’s of £620 each.
And what has this resulted in? Sainsbury’s have just reported Christmas trading growth whilst Tesco reported a fall. How did Sainsbury’s do it? There was nothing complicated, they got back to basics. They started selling great products again, they started giving excellent service again, they focused on attracting new customers by marketing well and they focused on retaining their customers (go to http://online.wsj.com/article/BT-CO-20120112-703569.html)
All in all, a great turnaround (and I’m back to shopping with them as well when I’m back in the UK).Our industry is changing rapidly (just as the world of supermarkets has). The fact is that if you don’t change but your customers do, then what happened to Sainsbury’s before they turned it around could happen to you.
Our customers are changing, the products are changing, they are using new mediums for pricing like Truecar.com (whether you like this company or not it’s getting a lot of press and traffic), they are using Facebook and Twitter for offers, they are using and embracing technology and they are voting with their custom too.
A cautionary tale to conclude this story; I was at a friend’s house on Saturday evening for a party. Don and Donna were the hosts and as I work in the car business it’s pretty normal for somebody to bring up a car story with me. This time it was Donna and she mentioned that she had used a local dealership for service as she had purchased her car from them but would never use them again.
I was interested to hear her story. Between the jigs and the reels, the dealer had quoted her $1100 to repair her car and suggested to her that she traded-in her car instead, it might save her money. Donna liking a second opinion took her car elsewhere before even considering trading her car; the issue was resolved quickly at the second dealer and the car cost just $250 to repair and service.
Donna has never received a contact from the dealer she purchased her car through, never. She swears that she will never go back to them because in her mind they tried to rip her off (this may or may not be the case).
I know the owner of the business and I know he would be mortified if he was made aware of this (this dealer has an underperforming service operation and the whole business is overly reliant upon sales). The dealer has a BDC to stay in touch, he has systems and process employed that should have followed her up after her service quote. The systems obviously are not working because if they were then Donna would have received a call or a contact from them and they would have had an opportunity to turn things around. This is 2012 in the USA.
This means that the business has got to change the way they are doing things otherwise it’s likely that they will suffer as they lose they will lose customers. They are going to need to make some changes to address their weaknesses. The Sainsbury plan will work for them if they embrace it. As the dealer is selling great products they have a simple 3 step plan to implement to turn things around;
1. They just need to start giving excellent service again by focusing on customer service
2. They need to focus on attracting new customers by marketing well and embracing new mediums whilst continuing their current activities
3. They need to stay in contact with their current customers to retain them by making their BDC work more effectively and making sure that all of their customers and prospects are kept in touch with.
Nothing complicated, just doing things better than they currently do and raising the customer service bar a tad higher.
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