Former Tesco boss Sir Terry Leahy has made a sideways swipe at the retailer’s Big Price Drop campaign – blamed by many for its current woes – citing the folly of trying to lure new customers with special offers.
Launching his new book, Management in 10 words, Leahy stressed the critical nature of loyalty.
He said: “In difficult times, the value of loyal customers soars. Much better to reward loyal customers than try to lure in new ones with special offers: do that, and you quickly descend the spiral of rewarding promiscuous customers.
“Likewise, reward loyal employees: their experience equips them to train others, and makes them the best at retaining customers.”
Leahy spent 33 years working at Tesco, 14 of which as chief executive. During that period Tesco went from being the third-largest supermarket in the UK, to the third-largest retailer in the world.
A major thrust of this growth came from the retailer’s adoption of database marketing techniques, through the Clubcard scheme, devised by EHS Brann (now EHS 4D) and DunnHumby.
The company recently admitted it had taken its eye off the ball by slashing loyalty spend and pledged to put Clubcard data back “at the heart of the business”.
“Management in 10 Words” by Sir Terry Leahy is published in Trade Paperback in Europe by Random House Business Books.
