Context: we live in Henley-on-Thames, a small south Oxfordshire town with a population of about 12,500, 8 miles from Reading, the county town of Berkshire, which has aspirations to achieve city status during the Jubilee Year. South Oxfordshire is Conservative country, with an affluent population, some of whom, living in the Henley hinterland, are seriously and globally rich. The town sports two supermarkets: Waitrose, which is part of the John Lewis Partnership, and Tesco, which, by a substantial margin, controls around 30% of national market share (compared with Waitrose’s 4%).
http://www.guardian.co.uk/business/2011/aug/16/supermarkets-market-share-kantar
In Henley, Waitrose is located in the centre of town, so that one of the two adjacent central car parks is known as the ‘Waitrose Car Park’. Tesco, with a much more recent history in the town, is situated on the outskirts, off the Reading Road, and has its own free parking. From our point of view, Waitrose is our local shop, and although Tesco has a reputation for very competitive pricing, there is little sense in driving to a supermarket when we can walk. Besides, if we do drive to Waitrose, the first hour’s parking is refunded – an inducement to help compensate for the competitive advantage that Tesco enjoys by having free parking.
As part of the John Lewis Partnership, Waitrose occupies a unique position because staff are part owners and are known and referred to as ‘partners’. Recently, in much media and political brow beating about the need to rethink nasty capitalism, the John Lewis model has been frequently cited. Basically, thanks to expansion of power-sharing policies by the son of the eponymous founder, partners have a say in the way the business is run, as well being beneficiaries of a bonus sharing scheme which gives them a significant share in the profits.
(See http://en.wikipedia.org/wiki/John_Lewis_Partnership)
That the John Lewis model of corporate governance is successful is demonstrated by their leading position in the retail market. Not only are they ‘never knowingly undersold’, they also enjoy an almost hallowed status among their middle class clientele, thanks in no small measure to their emphasis on providing excellent customer service. This means that customers can expect to be given good advice by knowledgeable sales staff, an important consideration when major purchases are involved. Although Waitrose, as a supermarket chain, is not selling high cost/value products, the same values and attitudes extend to their stores and staff who, for instance, are trained not only to point customers in the direction of sought for groceries, but to accompany them to the specific location while engaging them in conversation! (You don't get this sort of treatment at Tesco!)
Yesterday we did a routine Saturday morning shop at Waitrose, and on returning home, my wife noticed on the receipt that there was an invitation to participate in an on-line customer survey as part of the Waitrose-Experience. So, I logged on to see what this was all about. (We were both uneasy about the terminology: it seems that we no longer shop, but have a retail experience.)
To participate, I had to key in a code printed on the receipt. So, there is a gateway to entry to the survey, which only bona fide customers can pass. The survey itself is very similar to anything to be found on SurveyMonkey, with a lot of Likert scale items in which customers are asked to rate range of merchandise, quality of service, and so on. Significantly, in view of the importance attached to the latter, one item asks customers to rate staff on their ‘passion’ and ‘product knowledge’.
The survey is quite long, and at the end customers are asked to share their information about the Waitrose experience with friends via the usual list of social network sites. This is where things became interesting. There is an empty field into which one can enter some text. However, when the button to post this to Facebook is clicked, a separate box appears, containing text to the effect that I ‘have just had a great Waitrose shopping experience and to find out more, click on a link’ which will, presumably, take the reader to my completed survey. Hmm.
At this point I started to feel that I was being manipulated in pursuit of a clever bit of viral marketing dreamt up by the Waitrose marketing department. (Viral marketing is what we used to call Word of Mouth -- WOM – but now the WOM is disseminated via the social media.) And when customers feel that they are being used, their attitude to the manipulator becomes less positive. So, from the customer service management point of view, I feel that my Waitrose Experience experience serves as a warning as far as surveying customers is concerned.
There was, of course, an inducement to complete the survey: entry into a draw to win £500 worth of Waitrose groceries. In relation to the Waitrose operation, this is less than a drop in the ocean. Last year, Waitrose spent £10 million on renewing its web and on-line services,
http://www.cio.co.uk/news/3266928/waitrose-experiences-major-problems-on-new-10m-website/
which shows not only how seriously they take this aspect of retailing, but also how only really big businesses can resource the data management and mining systems which they consider to be vital in meeting and forecasting consumer demands and taste.
Even so, there are dangers in co-opting the customer in the marketing process, and with the growing concern over the ownership and use of personal data,
http://www.guardian.co.uk/commentisfree/2012/mar/02/digital-masters-must-be-watched-google
even the sainted John Lewis Partnership and Waitrose may need to think again.
Showing posts with label john lewis. Show all posts
Showing posts with label john lewis. Show all posts
Sunday, 4 March 2012
Thursday, 27 May 2010
Change: the John Lewis case
In his FT column, Stefan Stern (24th May) commented on the success of the John Lewis organization in implementing some major changes, which included, for a notably paternalistic organization, some pretty hard nosed changes to its business model, with the loss of 250 jobs on the closure of a warehouse, and other redundancies linked to further changes. Significantly, the senior management decided to commission a consultant specializing in change management to advise them during the transition.
He reports that the consultant, Catherine Sandler, co-founder of the London based Sandler Lanz consultancy, advised that at times of great turbulence and uncertainty, leaders need to offer “psychological containment”. She explains that “There has to be congruence between what employees are feeling and how leaders behave.” And she lists four things which leaders have to do.
1. They need to be on the front foot, taking “prompt, visible and considered action”.
2. They have to communicate honestly, on the basis that people prefer to know the worst than fear the worst.
3. If possible, they need to find a positive and even inspiring message amid the bad news.
4. Last – and hardest of all – they need to convey empathy, “in a way that is authentic to them”.
Stern reports that the first time the MD suggested to senior managers that they discuss 'how all this feels', he was greeted with groans because these are people who are highly task focused, and displaying empathy isn't a high priority for people under considerable pressure. Evidently some of this approach must have rubbed off on them, however, and the company has managed to come through the transition very successfully, with sales up by 15 per cent for the first quarter -- comfortably ahead of the competition.
John Lewis is an exceptional organization, but is not above taking some tough decisions. However, it appears to have done so in a way which is congruent with its unique and long standing set of values, as established by John Spedan Lewis, who, on the verge of the great depression, established the partnership model of corporate ownership which is unique to the organization. Ensuring the survival of that model and of the set of values associated with it, not to mention the business itself, the current leadership realized that significant changes would be needed, and rather than shying away from them, they took good advice and went ahead. A salutary lesson in both recognizing the need for change and in managing it successfully.
He reports that the consultant, Catherine Sandler, co-founder of the London based Sandler Lanz consultancy, advised that at times of great turbulence and uncertainty, leaders need to offer “psychological containment”. She explains that “There has to be congruence between what employees are feeling and how leaders behave.” And she lists four things which leaders have to do.
1. They need to be on the front foot, taking “prompt, visible and considered action”.
2. They have to communicate honestly, on the basis that people prefer to know the worst than fear the worst.
3. If possible, they need to find a positive and even inspiring message amid the bad news.
4. Last – and hardest of all – they need to convey empathy, “in a way that is authentic to them”.
Stern reports that the first time the MD suggested to senior managers that they discuss 'how all this feels', he was greeted with groans because these are people who are highly task focused, and displaying empathy isn't a high priority for people under considerable pressure. Evidently some of this approach must have rubbed off on them, however, and the company has managed to come through the transition very successfully, with sales up by 15 per cent for the first quarter -- comfortably ahead of the competition.
John Lewis is an exceptional organization, but is not above taking some tough decisions. However, it appears to have done so in a way which is congruent with its unique and long standing set of values, as established by John Spedan Lewis, who, on the verge of the great depression, established the partnership model of corporate ownership which is unique to the organization. Ensuring the survival of that model and of the set of values associated with it, not to mention the business itself, the current leadership realized that significant changes would be needed, and rather than shying away from them, they took good advice and went ahead. A salutary lesson in both recognizing the need for change and in managing it successfully.
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