Loyalty on the Job and in the Market Basket
By George Anderson
In his Cubicle Culture column earlier in the week, Jared Sandberg of The Wall Street Journal looked at the problems that can arise in the homes and workplaces of people who work for a consumer brand company when they or someone else uses a competitive product.
Tom Muccio, a retired executive who worked at Procter & Gamble, said his father worked for Del Monte and would “go through the roof” if his mother bought a private label product to try and save money.
As an adult, Mr. Muccio made sure his family understood the benefits of products sold by P&G. When he discovered his mother-in-law was using a competitor’s soap, he gave her an alternative manufactured by his employer.
P&G and most other companies do not have an official policy that employees must use their products but most understand that, ultimately, it benefits them when they do.
There have been instances at other companies, however, where employees have lost their jobs for using “the enemy’s” brand while on the job.
Back in 2003, a driver for a bottler of Coca-Cola was dismissed from his job for buying a Diet Pepsi from a store where he just made a delivery. Management at the plant said he was being terminated for “violating a policy prohibiting slander of Coke products.”
Moderator’s Comment: Should employers be allowed to require employees to buy their company’s products? What effect does this have on an employee’s loyalty
to his or her employer?
Generally speaking, we side with employers on this question. We do think it can be taken too far, however. Particular problems have arisen with clothing
retailers who want their employees to buy expensive clothes from their stores while paying the workers very little. –
George Anderson – Moderator
History contains more examples of the fidelity of dogs than of employees. I am always curious when passing by an automobile factory and see a slew of competitors’ autos in the parking lot. There are, of course, various reasons for that situation.
While I do not believe a company has the right to expect an employee to buy their product(s), I do believe that a company has an obligation to inspire its employees to make products so good and so desirable that they will want to buy them.
My emotional answer (if this is a topic to get emotional about) is to “support your employer.” In business, however, there is no room for emotion. Business decisions (both corporate and personal) are based on economics.
My practical answer goes along more with George’s comment. I remember when a fellow retailer employee was “called on the carpet” because an employment inquiry was made for a competitor’s check cashing card. His wife had applied for the card and chose that store because it enabled them to meet their budget.
Even Henry Ford recognized he needed to give raises to his assembly line workers so they could afford the cars they were producing. If a retailer wants his employees to shop with them, he must either pay them enough to “move up” or offer employee discounts that bring prices down to their pay scale.
Companies who do not inspire loyalty should not demand it. If your employees are not your most loyal consumers, you should be “investigating your strategic options for maximizing shareholder value.”
Require is much too strong a word, in my opinion. Encouraged, for sure. And if price is an issue, adequate employee discounts are needed. But the real point is that the company must “sell” employees, as well as the public. You pay an employee to do their job, not to buy your products.
Having said this, I consider every employee in an overall context in terms of what they are contributing and what they are costing. I wouldn’t find a litmus test like — Are you buying our products? — to be very helpful. A survey of just what employees are buying might be very helpful in understanding what those “in the know” really do.
You can’t “require” purchase of company product, but it should be made very easy to purchase at a very substantial discount. My recommendation is to charge “cost,” which for most CPG companies would be in the range of 60-80% off retail price. Even a number of free units should be offered on a monthly basis, particularly new items.
Requiring employees to buy their employers’ products is going a little bit overboard. Should the guy who mops the floor at the Jaguar dealership be required to drive a Jag? If you are openly promoting a competitor’s products, that’s one thing. But sometimes we patronize our competitors because of convenience or economic reality. For me, I just called it competitive research. If you are a supermarket employee, you are more likely going to run into a coworker at Wal-Mart than in your own store. That’s called an economic reality. I used to work for a supermarket company. At lunchtime, the nearest place to get take-out food and an ATM was at a competitor. No one thought twice about going there until the HR police saw grocery bags in the break room refrigerator with the competitor’s logos on them. I don’t think anybody got fired over it but it did create some hostilities. The problem was solved when the company bought the competitor.
If companies are ever allowed to require their employees to buy their brands, I’m going to have to stop working altogether, and consider moving to a remote island. That said, any employee who buys competitors’ products might want to consider a new employer, except in some of those gray areas where who’s competing gets tricky.
Obviously, the janitor will not be driving a Jag (or if he/she is someone should investigate the safe). I don’t drink wine – never mind a Miller product – when I am with clients from Anheuser. Logic and self-preservation demand some loyalty. But any company that does not command the loyalty of its employees ought to question the value of their products and then contemplate an in-house focus group.
Shades of Big Brother (and I don’t mean the UK reality show). How do these employers know whether employees are buying their products or not? There is also no direct correlation between buying A N Other brand, which might happen for any number of reasons as mentioned above, and bad mouthing an employer’s products. To think that people call ME paranoid. Any employer even thinking about spying in such a way and insisting on having people flaunt their use of the employer’s products really needs to get over themselves. This is expecting way too much; if it happens, cool; if it doesn’t then try to find a way of encouraging it. “Requiring” should never be on the menu.
Allow me to approach this question from a supermarket POV. Researchers who’ve had the perspicacity to ask the right questions over the years have discovered that supermarket employees represent a double-edged sword for their employers: When they shop in their own stores and encourage their families to do so, supermarket employees provide a tremendous boost to their communities’ positive perceptions of the store. If they shop elsewhere and bad-mouth their employers, the negative perceptions created are significantly greater than any positive ones.
So, why not give supermarket employees a discount? “Oh my, they’ll just buy groceries for their entire extended family and group of friends!” Well, maybe, if the program has no top-end controls. But, every dollar spent in the supermarket with an employee discount is one dollar LESS spent with competitors. That’s how share-of-pocketbook and share-of-market are built.
To Gene’s point…my wife and I have sort of a running joke going about our favorite Trader Joe’s checkout man. He’s an older fellow, always ready with a warm smile and other personal complements. One thing that he does infallibly is to pick out one of his “favorite items” among our purchases. “Oh my gosh! These are the BEST Thai Pot Stickers that you’ve picked out here! I have a real weakness for these. Did you get any lemon Ponzu dipping sauce?”
As obvious as it all is, there’s no doubt that this is someone who knows and loves what he sells. Retailers…can you imagine a product line and a culture that would inspire that kind of enthusiasm with your store-level employees?
Rather than taking some form of negative action against an employee for using a competitor’s product, companies should be researching the buying habits of their employees and find out what drives their decision. Employers have so much more to gain from this approach than any other action.
From my own personal experience, I cannot always afford to purchase the products made by my company. My decision is not driven by quality but by price.