Trader Joe’s | Human-Centered Change and Innovation

Transactions versus Experiences

GUEST POST from Shep Hyken

In the past few months, I’ve been to several concerts. I’d say the entertainers were legends in the industry. Two of them were Bob Dylan and Ringo Starr (of the Beatles). Both are talented beyond words. They both have successful careers. They have both been inducted into the Rock and Roll Hall of Fame. It’s important for you to know this, just in case you don’t know who they are. It’s a generational thing. If you were born in this century, you probably don’t know either of them, but trust me, they are rock stars and legends!

There was a difference in their shows. Bob Dylan came out and played. He barely spoke a word to the audience. His music was enough for his true fans. But for some of us who saw the legend for the first time, we might have expected more than just songs. If all we wanted was the music, we could have listened to his albums on iTunes or Spotify.

Ringo Starr, on the other hand, did more than just play songs. He brought energy and enthusiasm to the stage. While he and his all-star band played their most popular songs, there was more to the show. He shared commentary and stories, so the audience felt they had a glimpse into the personality of one of the most famous and iconic musicians on the planet.

This is the lead-in to today’s lesson, which is to understand the difference between experiencing a company or brand, and simply doing business with it.

Shep Hyken Magician Cartoon

The concert examples are not unlike two companies competing for a customer’s business. A company that doesn’t showcase its “personality” may be missing an opportunity to create a personal connection.

If you want to see this in action, go visit a Trader Joe’s grocery store and ask several of the crew members – their term for employees – some questions. Experience their reputation for fun, which goes beyond the employees’ personalities and includes a uniform, which is a somewhat “loud” Hawaiian shirt.

So, which company or brand are you? You don’t need outgoing employees wearing loud Hawaiian shirts for a customer to experience your brand. The point is to do something that makes the customer feel as if they are experiencing more than, for lack of a better description, placing an order and having it fulfilled. The distinction between merely conducting business with a company and truly experiencing it lies in the unique personality and engagement the company and its employees bring to every interaction.

Image Credits: Pexels

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Trader Joe's Loyalty Program Has No Points or Perks

GUEST POST from Shep Hyken

If you’ve shopped at a Trader Joe’s grocery store, you are familiar with their combination of high-quality products and a great customer experience delivered by friendly, helpful, knowledgeable employees, also known as teammates. The retailer has an incredibly loyal base of customers. Its loyalty program, if you want to call it that, has nothing to do with points or perks. There’s no loyalty card to punch. Its loyalty program is simply about creating enough value to turn a one-time customer into a loyal customer.

This type of loyalty is the envy of many retailers—and any other business with a formal “loyalty program.” It’s been my position that most loyalty programs aren’t really based on loyalty. They are marketing programs that drive repeat business. Often there are incentives such as points that accrue for free merchandise and discounts. Take the airlines, for example. Almost all have a frequent flier program that offers points/miles and perks to returning passengers. The more you fly, the closer you get to a free trip or a complimentary first-class upgrade. But what happens if the points and perks go away? Would the passenger still choose that airline? Or would they go with an airline that offers a lower price or a more convenient schedule?

True loyalty is about an emotional connection. The customer enjoys the experience, the products and the employees so much that they wouldn’t think of doing business elsewhere. And as a bonus, this level of loyalty makes price less relevant.

This is precisely what Trader Joe’s has done. Without the typical customer loyalty program, it has created an experience that drives repeat and loyal business. In a sense, it is a throwback to an era of simply taking care of the customer with a good, old-fashioned customer experience and product quality. Furthermore, they don’t participate in e-commerce and other shopping options that you might find at other grocery stores and retail outlets.

Is this type of loyalty sustainable? It’s worked in the past. It’s Trader Joe’s brand reputation. Will it take them into the future?

In a recent RetailWire article, experts weighed in on the question, “Will the lack of e-commerce, a loyalty program or discounts found at other grocers become bigger liabilities for the chain down the road?”

Neil Saunders, managing director of GlobalData says, “The lack of e-commerce at Trader Joe’s may not be everyone’s preference. However, the proposition is so strong across so many attributes—value, quality, taste, uniqueness of offer—that most consumers are willing to overlook this and visit stores. This shows up in Trader Joe’s strong trading numbers over the past few years: it has gained market and shopper share.”

Bob Amster, principal at Retail Technology Group, says, “The store experience is the brand at Trader Joe’s. They are unequaled in their segment.”

George Anderson, editor-in-chief at RetailWire, weighs in with his comment, “Trader Joe’s rationale has been that it offers the lowest price possible to customers on a day-in and day-out basis and that added expenses such as loyalty programs will only drive prices up. The company counts on developing true loyalty with its customers, in the human sense, by offering products they value and backing them up with a no questions asked and no receipt required guarantee. It also excels at hiring people who are true brand ambassadors who customers value for their knowledge and willingness to help. If there was ever a retailer that didn’t need a loyalty program—Trader Joe’s is it.”

There are many more comments, and most of them reflect the views of the experts above.

Trader Joe’s is a benchmark of value that other retailers (not just grocers) should aspire to reach. They have good products, competitive pricing and incredible service. That keeps them in the game—and at the top of the game. And as for a loyalty program, Trader Joe’s already has one. It’s their customer experience. That’s what gets customers to say, “I’ll be back!”

This article originally appeared on Forbes

Image Credit: Pixabay

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