Trader Joe’s – Loyalty is as Loyalty Does
By John Hennessy
In excerpts from his book, Trader Joe’s Adventure, run in Workforce Management, Len Lewis spells out the philosophy and tactics behind how Trader Joe’s achieves high levels of employee loyalty and low levels of employee turnover.
“Trader Joe’s has long adhered to the philosophy that happy employees make for happy customers. Happy customers spend more and visit the store more frequent. This attitude is rare in the retail industry at large, where employees are often seen as expendable.”
According to human resources expert Mel Kleman of Humetrics, an internationally recognized authority on recruiting, selecting and retaining hourly workers, “They’ve taken the approach that the employee is number one. They feel that if they treat employees the way they want employees to treat customers, odds are stores will have a better shot at providing a unique shopping experience for people as soon as they walk through the door.”
According to Mr. Lewis, some of what Trader Joe’s does to foster employee loyalty includes:
- Leadership Development program – designed to allow people to make their own decisions about store operations because employee autonomy is so highly valued
- Trader Joe’s University – focuses on management, leadership and communication skills
- Average hourly pay of $21 per hour compared to $17.90 at union operations
- Health insurance and retirement benefits
- Hires highly motivated people with a talent for customer service and a passion for food.
- Demonstrate that there is a career path, or at least an opportunity for advancement.
Blake Frank of the University of Dallas says, “Research shows that what an organization does for its employees once they get there has a huge impact on retention and performance.”
Mr. Lewis writes, “… employers usually get the employees they deserve. That being the case, Trader Joe’s gets some of the best.”
Moderator’s Comment: Can a loyalty program, or any other customer-facing program, succeed if your employees aren’t happy to be there?
Too often a shopping trip is a like a game of tag. The store employees are “it” and you do your best to avoid them so you’re not tagged. Self-checkout tips
the scales toward you getting out without the need to interact with anyone wearing a nametag.
The power Mr. Lewis’ book is in the bright light it shines on how different it is to shop at Trader Joe’s. Trader Joe’s employees make it practically a
pleasure to spend money. If anything, you want to spend more. You want to learn more.
The employees are masters at reinforcing your purchase decisions, with cashiers commenting on how they’ve enjoyed some of the products in your basket, not
to mention suggesting related products you would also enjoy. And their suggestions are usually right on.
They also make it look so easy to be helpful, pleasant and profitable. –
John Hennessy – Moderator