Is your brand being tolerated? Then you’d better start listening…

Dave Lewis’s address at the Marketing Society’s Annual Lecture at The Royal Horseguard Hotel charted the rise, fall and (the early stage) revival of one of the best known and loved brands in the UK. As you might expect, this was an eagerly anticipated event as so many were curious to understand how Mr Lewis, Group CEO at Tesco, had approached the transformation of the ailing retail giant and acquire any knowledge or advice that we might be able to apply to the good of our own businesses.

When Dave Lewis started at Tesco in September 2014, a prominent figure in the industry described his role as being akin to “performing open heart surgery… in public”. An apt analogy when you consider the scale and profile of a brand that was seemingly self-destructing amidst its financial woes.

Mr. Lewis gave us his own assessment of the brand in terms of the UK consumer psyche: starting off as a ‘challenger’ brand that developed the first self-service store in the 1940s and lobbied for the abolishment of Resale Price Maintenance in the 1960s. On to how the relentless focus on putting the customer at the heart of the brand (encapsulated by the “Every Little Helps” proposition) established the brand as a ‘cheeky chappie’ and then into a true ‘brand leader’. A quick airing of one of the ‘Dotty’ (Prunella Scales) ads from the mid-nineties reminded us how likeable and respected the brand had become. However, as competitors caught up, the discounters moved in and the business focussed on international expansion, Tesco lost touch with its customer base. The brand was no longer being loved – it was being ‘tolerated’.

So, what was the answer?

Lewis talked about the importance of the business and the brand working in harmony. For Tesco, the 3 core elements of strategy are the operating model, the property strategy and the all-important customer proposition.

Lewis’s assessment was that there is not much wrong with Tesco’s operating model. The science of retailing is in Tesco’s DNA and he had 325,000 colleagues, each with their own “amazing capability” who knew all about running the business successfully. And without meaning to over-simplify, the property strategy was seemingly one of straightforward margin analysis. If a store could not be profitable, it would be axed.

The real fix needed to be in the customer proposition. Tesco had lost touch with its customers – they were no longer at the heart of the brand.

So, Lewis started out where all great leaders start. He listened! Firstly, he listened to his employees. In his view, these were not just employees, they too were customers and knew the business and the brand the best.

As you would expect, he also listened to customers and to partners and suppliers – the smallest 60 as well as the largest. And during the Q&A session, when challenged about the difficulty of being able to make a complaint on the Tesco website, the chap who had posed the question unwittingly found himself with the offer of the opportunity to discuss this with Lewis immediately after the event. If anything was going to have an impact on the customer experience, it was clear that Lewis was ready to listen!   

The next stage of the turnaround involved articulating a clear brand purpose. There was no reinvention here – simply refocussing on what it means to put the customer at the heart of the brand today and sharpening the focus on what expected from every employee in the business. ‘Every little helps – serving Britain’s shoppers a little better every day’.

With customer feedback and a clear purpose, Mr. Lewis and his team set about investing in the customer offer to make the nation fall in love the brand once more.

This has resulted in a number of ‘helpful’ initiatives across the entire customer experience. From a new party food range for Christmas that all cooks at the same temperature for the same amount of time (helpful to all busy hosts!) to a reformulation of products that has removed over 4 billion calories from Tesco’s own range along with print advertising for children’s shoes that helps you determine your child’s shoe size before you go into the store.

Additionally, all suppliers now benefit from improved payment terms (a commitment to pay all suppliers within 14 days) and a commitment to not put any food that is fit for human consumption to waste by the end of 2017 – a significant piece of news from a community and sustainability perspective. This was met with a spontaneous round of applause and was announced to the media the following morning.

Tesco has a presence in 99% of UK postcodes and Lewis refers to the Tesco business as a high touch / high frequency brand. When you do well, everyone knows about it. And equally when you do badly, everyone knows about it. The scale of the challenge facing Dave Lewis really did feel as important and dramatic as open heart surgery. But listening to how Mr. Lewis had approached turning the brand around, it dawned on me that this was no specialist procedure or breakthrough in marketing strategy. Here was an approach that was refreshingly simple: stay close to your customers, don’t forget what made you successful in the first place, and above all, stay relevant!

The session was certainly a timely reminder about not being complacent.  It’s easy to forget what got your business to where it is today and it’s easy to let financial struggles distract you from your customers or clients. But above all else, what was most impressive was the humility and authenticity of Dave Lewis himself and the speed of change he has enabled. He has listened to the people who know the brand best - employees as well as customers. He has recognised where the real value in the business lies. And in his own words, he has “simplified and set his employees free” to be the best they possibly can be.
It remains to be seen whether the brand will be loved by the nation once more, but on the basis of what I hear, the heartbeat is certainly growing stronger.  

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