Sir Terry Leahy’s 9 management lessons for creating #customerloyalty

9 management lessons for creating customer loyalty from Sir Terry Leahy, former CEO of Tesco Plc

1. Find the truth – What is your situation?  You can’t get to where you want to be without knowing where you are starting from.  Sir Terry started by listening to Tesco’s customers.  He got real stories from real people.  He wanted to find out what was good and what wasn’t so good about Tesco – these customers gave him the truth about his business.  If you respond to their comments then they reward you for it.
2. Set audacious goals / big targets – give your employees exciting, worthwhile targets and make them feel they are vital to the company’s success. Sir Terry’s targets when he was Marketing Director were:
   • Be no.1 in the UK
   • Be as strong in non-food
   • Invent services retailing
   • Become a leader in global retailing
3. Vision, values and culture – The culture at Tesco is that if we can do something useful for a customer, something of value, they will become loyal and we can then have a business.  It’s not primarily about profits.  Our staff feel they are adding value. When asked “What does Tesco stand for?” Employees replied: No-one tries harder for customers.  When asked “What would you like Tesco to stand for?” They replied: Treat people how we like to be treated.  If your employees feel good about your organisation then they can do anything.
4. Follow the customer – People’s interests and habits can change overnight leaving an organisation completely wrong-footed.  Get as close to your customers as you possibly can. Learn about their interests, concerns, where they are heading.  If you are first to respond to these changes they reward you for it.  If you are second to respond they think you’re only doing it because you have to because your competitors are doing it.  This is how Tesco Express stores evolved.  Young men in particular found it harder to find time to visit the big stores for the traditional 1 big weekly shop, so we responded by creating the conveniently placed Express stores.
5. The Steering Wheel – At Tesco we use a balanced score card – We set milestones that need to be reached by a certain time, put in place measures that reflect the changes we want to see and ensure everybody knows how the role they play, and how their individual milestone affects the greater whole. 
6. People, Process, Systems – To make Tesco’s strategy a reality for our customers we follow this simple method.  People – make the decision, process – make it a reality by writing a blueprint and allocating jobs to people, systems – embed it in a system to roll it out globally.  But you need a blueprint first.
7. Data is priceless – How you relate to customers through insight is crucial.  Tesco do this through their Clubcard.  The data itself is not what is of value, it is what can you learn from it and what you do with this insight.  Decision making throughout Tesco is made using this insight. 
8. Competition is good – Your competitors force you to do the best work.  You should look for their strengths as well as their weaknesses.  You need to learn from them quicker than they learn from you.
9. Leadership – “A leader will take you further than you would go on your own.”  Leadership is not about a top-down hierarchy, you want as many leaders as you can get.  You want everyone in your organisation to be confident enough and care enough to put their ideas forward and take ownership of their roles.

Find out more about Sir Terry Leahy and his experiences at Tesco here