Simon Uwins joined U.K. retailer Tesco when it was considered a third-rate supermarket, then helped elevate it to a multinational market leader. Now the former CMO has a specific take on the correlation between customer experience and customer loyalty.
“The thing I learned very quickly was that your brand very much depends on the customer’s actual interactions with you, not some image you’ve created in an advertising campaign,” said the 25-year marketing veteran. “So you better make your customers feel appreciated. That requires that you take a very different approach to the brand. It becomes a companywide endeavor, rather than something created by marketing.”
While that has long been true for retail, it’s now the case for every industry.
“In the connected world we live in today, it’s the reality that many marketers face now,” said Uwins, who applied his experience at Tesco to launch the Fresh & Easy neighborhood market brand in the U.S. in 2007.
Author of the book “Creating Loyal Brands: A Guide to Earning Loyalty in a Connected World,” Uwins argues that building a loyal brand goes far beyond instituting a successful loyalty program. (Uwins should know; he pioneered Tesco’s Clubcard marketing and launched the Friends card at Fresh & Easy.) Loyalty programs are a marketing tactic. Loyal branding, he said, must be a business ethos.
CMO.com recently talked to Uwins about the difference between traditional branding and building a loyal brand, why a company’s loyalty to its customers trumps all, the dangers of a disengaged workforce, and the one simple step CMOs can take to begin building a loyal brand.
CMO.com: So what is a loyal brand?
Uwins: A loyal brand focuses on inspiring the loyalty and passion of its customers as an approach to business. It’s a reflection of the brand’s behaviors and beliefs and its own loyalty to customers, communities, and the world at large.
A big part of that is the idea that if you want to earn the loyalty of customers, you have to be loyal in return. Traditionally, marketers have viewed customer loyalty as a prize that they compete with other brands to win. But increasingly, it’s something you have to earn. Customers become loyal to a brand for a reason, so it’s important not to suddenly change on them.
Consider the outcry that happened when Apple introduced Apple Maps in 2012. It wasn’t a terrible product, but it was substandard, and Apple’s fanboys got upset. As is often the case, the most upset customers are the ones that are most engaged with you who feel you’ve let them down.
It’s doesn’t mean you can never change. But you should only change as your customers change. The point is that customers become loyal because they like what you stand for. They’ve committed a part of themselves to you. So you have to live up to that in return.
CMO.com: What is the biggest difference between loyal branding efforts and the traditional approach to branding?
Uwins: The biggest difference is that creating a loyal brand must be a companywide effort. With the traditional approach to branding, the brand was an image created by marketing. Today the brand must be the company and the company must be the brand. The enterprise has to live and breathe the brand in order to be seen as authentic.
That requires going to the heart of why a company exists, the value it creates for its customers, and the way it behaves. You have to anchor the company around a purpose that is grounded in improving customers’ lives. That way you can create a shared agenda with customers. Then it comes down to aligning all marketing activity and the CMO working with C-suite peers to embed that purpose into the behaviors and processes of the business.
CMO.com: Can you take us through the framework you’ve developed for building loyal brands?
Uwins: It’s a five-stage framework. First it starts with defining your core purpose. Second, it moves on to ask how you can create value for customers from that core purpose. The third step is building a brand culture so that the organization lives and breathes the brand. Step four is engaging customers and employees around that purpose by creating a compelling story for everyone. The final step is to say “thank you” to customers once they actually do give you the privilege of engaging with and buying from you.
CMO.com: What’s an effective way to say “thank you” to customers?
Uwins: A lot of marketers think it’s about having a loyalty program. But loyalty programs can be very transactional with a lot of conditions attached. If you want customers to feel appreciated, then rewards are part of that, but they need to be unconditional—a simple “thank you” with no strings attached. But it’s also about staying in touch with customers on their terms and making them feel special. A critical part of that is that as you get to know them better, you must use what you know about them to improve their customer experience the next time around. If you keep improving the experience for them, the more likely they are to come back to you.
Take Safeway’s Just for You program. It’s not a points program. It takes your history with them and gives you better prices on items that you actually buy, and alerts you to the promotions and coupons you’re most likely to be interested in. It’s helpful.
CMO.com: You mentioned the importance of engaging employees. Is that something marketing is equipped to take on?
Uwins: It’s not something marketing has traditionally taken on. It’s a bit of an elephant in the room. It’s widely accepted now that brands are increasingly defined by the customer experience, and that has to be [done] right. And a big part of the customer experience is interacting with employees. But at the same time, as you need engaged employees more than ever; you’ve got the most disengaged workforce ever. The vast majority of employees in the U.S. are not engaged by their employers. That’s a big disconnect that’s increasingly unsustainable. So we’re seeing more and more marketers begin to talk about employee engagement.
There’s been all this talk about how the CMO has to partner more with the CIO because CMOs are going to be spending more on technology than CIOs. And that’s true. But in addition, the CMO needs to partner with HR to engage employees and shape the culture.
CMO.com: What’s the best way to engage employees if your goal is to improve the customer experience and build loyalty?
I always come back to Daniel H. Pink’s “Drive: The Surprising Truth About What Motivates Us.” Employees become more engaged if they feel they are involved in a purpose beyond making money. It’s intrinsic motivation, not extrinsic motivation. If you create a shared purpose and a shared agenda with customers and employees, you have a much greater chance of engaging employees.
Apple is a good example. They created a purpose of making tools for the mind. It wasn’t a purely economic motive or the goal of being a market leader. It was grounded in enriching people’s lives. If you go into any Apple store, you’ll see how employees are encouraged to actually interact with customers and help them be more creative than they ever thought possible.
CMO.com: What are the biggest mistakes companies make when thinking about brand loyalty?
Uwins: First, the idea of brand loyalty often gets confused with loyalty marketing. That’s just a tactic. The focus should be how you go about earning loyalty and creating a companywide approach to it.
The second mistake is thinking you can deliver a fantastic customer experience without engaging employees. Customers can read the body language of a business. It’s by interacting with a business that they get a sense of what it really values. And if that’s not in line with what the brand is trying to deliver, it’s very inauthentic. You have to engage employees alongside customers around a common agenda.
CMO.com If you could advise CMOs on the one thing they can do today to begin building a loyal brand, what would it be?
Uwins: Look inside your company and ask yourself why this company exists, beyond making money. Ask yourself if the company lives and breathes the brand. A bit of refliscussion that instantly uncovers one or two areas of opportunity.
The critical thing is that, as a marketer, you’ve got to work inside the business as much—if not more—than you’ve got to work outside the business. I spent the majority of my time working alongside the business to share and deliver the experience that customers wanted. And that’s a very different way of operating than focusing externally and working with agencies.
It’s never-ending. It’s not just an internal marketing campaign that you run for a bit and that’s it. But, in the end, that’s what it takes to create the customer experience that defines your brand.