Listen to your customer, not your competitor

Nashville Business Journal

February 19, 2016

 

In the early 1980s when our Tractor Supply management team first began to gel we found better ways to listen to our customer. First and most obvious was spending more time in stores observing, asking questions and listening carefully to everything we heard. Salespeople and store managers know the most about the customer, so we made it our job to listen and then act on what we learned from them. 

One big issue we learned about by listening more was out-of-stock products, which we attacked at the outset. Subtler still was that most of our customers did not appear to be traditional farmers but a majority drove pick-up trucks.

We examined sales data and found that products relating to production agriculture were almost all in a decline, while pet and animal products, riding mowers, hardware and work clothing were all in growth mode. It took a while but based on open and honest listening, observing and studying we came to the conclusion that our customer had evolved from a full-time farmer to a hobby farmer. That conclusion dramatically changed the direction of the company. But that was just the beginning of listening to customers.

Advisory boards became another listening mechanism that provided amazing results. Tractor Supply store managers interact with customers regularly and have an authentic sense of the business. We began by inviting a dozen managers from all over the country to spend a few days with us analyzing the business. Once we said that we are “taking notes but not taking names” the fireworks began. One great idea after another about products, customers, operations and distribution flowed at an exciting, breakneck pace. Expanding further, we began holding vendor conferences to discuss our business relationships, and out of that flowed myriad new product ideas and hundreds of customer insights. 

We also watched what our competitors were doing but did not rely on it solely for customer research. Our conclusion was that if you spend a large amount of time studying retail competition you are liable to become a follower. Listening primarily to the core customer helps you to become leader, not a follower.

There is another kind of listening opportunity called the customer “complaint,” which should be considered an opportunity. In fact, a complaint that’s taken care of professionally can actually build brand loyalty. A quick and positive response including a big “thank you” usually works best. At Tractor Supply, salespeople are empowered to listen and do “whatever it takes” to help customers with issues. 

There are many different ways to listen to customers. Start by taking stock of your organization to see if your team is doing all it can to listen. The better you perform this skill, the better the ideas you’ll have to power future growth.

 

Joe Scarlett is the retired CEO of Tractor Supply Company
For more on leadership see joescarlett.com
Or write Joe at Joe@joescarlett.com

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