The Comeback Kid.
Good news at last.
Recovering from the biggest loss in British corporate history, this week Tesco posted a £162 million pre-tax profit for the twelve months up to February of this year. That’s an impressive upturn of £6.56 billion. Yep, billions!
Lewis is nothing if not a realist and so has warned that it won’t all be plain sailing in the future – and that shareholders will have to wait a while longer to see their investment grow – but how did he do it?
In his own words, Dave says that they have “regained competitiveness in the UK with significantly better service, a simpler range, record levels of availability and lower and more stable prices.” So there we go – easy. As soon as he took on the job of Tesco CEO, Lewis put the focus back on the customer with more staff, improved stock levels and lower prices on key goods. Much better than fiddling accounts to make your business look in better shape than it is.
As well as making sure customers had a better shopping experience at Tesco, Lewis also implemented what some financial analysts are calling “the only credible strategy in the market” when it comes to taking on discount twins Lidl and Aldi – concentrate on fewer items, slash prices and keep the offers coming in.
The key here has been in Tesco’s consistency of approach. While other supermarkets occasionally launch marketing campaigns suggesting that their prices are on a par with budget stores, these efforts soon fade and nobody’s none the wiser. At Tesco, they’ve committed to 24/7, twelve months a year reductions – and that’s piqued customer’s interest again. Consumers finally know what to expect when they enter a Tesco store – and they like what they’re seeing.
So what’s the take home?
There’s lessons for us all in this one. First up, let me step away from consumer research consultancy and become your life coach. Get a plan for your business that you really believe in and then have faith in your ideas. I’m sure Drastic Dave has endured some sleepless nights over the past twelve months, but he believed in his ideas and never let that belief wane. Admittedly, your ideas have got to be backed up by evidence, research and the usual stuff of business plans, but once you’ve got all that out of the way, really believe you’re onto something. Why not?
Right, back to the day job. The reason Dave knew his ideas would work is that he’s always put the customer at the centre of his plans – and taken some flak for this too. Even this week, during the briefing where Tesco’s pre-tax profits were announced, certain business correspondents (I’m talking about you, Ashley Armstrong from the Telegraph) derided Lewis for his constant reference to customers being at the heart of their turnaround. Nothing to laugh at here – and maybe the declining press industry should take note rather than mocking him.
We don’t all have Tesco’s resources at hand to undertake extensive customer research but we can put ourselves in our consumer’s shoes and see our brand from their perspective. Where is it working? Where are things going wrong? What do we look like to the cash-strapped single mum working hard to make ends meet? What do they want from us?
It can be a difficult thing to get right, unless you’re born with the empathy skills of the next Dalai Lama, but that’s where The Monachie Project comes in. Think about it! The reason Lewis had confidence in his plans is that he was confident in understanding what his market was looking to him for. He got that one thing right and everything else fell into place.
The Monachie Project’s consumer research consultancy takes the guess work out of appealing to customers. We tell you exactly how things look to the consumers you’re trying to reach – and you don’t need Dave’s customer research budget to take advantage of us. Just as Tesco have shown, a little investment – plus a little faith – can turn around even the biggest loss in British corporate history. Do you want to be next? In these times of economic uncertainty we can help futureproof your business by understanding what’s really going on for your consumers – and what they want to see from you. Dave’s shown you the way – it’s up to you now…