Soul Mates: Company Culture & Brand

September 17, 2019 | blog | By Mike Sullivan
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This month we’re delving a little further into the way challenger brands create unassailable brand distinction by focusing on building the right company culture. Company culture tells employees everything they need to know about how to behave, and the way employees behave has everything to do with the way a brand performs. In this two-part series, we’ll share a couple of examples illustrating what happens when companies get this right, and what happens when it goes wrong.

Should you really always put the customer first?

There’s a long list of marketing pundits and authors who have made their fortunes selling the idea that putting customers first is the one true path to retail success. Without customers, there is no monetary support for the brand. Without happy customers, there’s no one to come back and buy whatever it is you’re selling, again. And again. And again. What could be more important to a company than building and supporting loyalty among those who patronize the brand? After all, without them, there is no us.

It’s easy to see how a company could arrive at that reasoning and completely buy into it. It’s misplaced and wrong, but understandable.

A number of years ago, I attended a national retailing conference and had the pleasure of hearing a talk given by Kip Tindell, one of the founders and, at the time, CEO of The Container Store. As the leader of a company that’s made Fortune Magazine’s list of “100 Best Companies to Work For” ten times over, and one of the most respected corporate leaders in America, I couldn’t wait to hear Tindell’s secret to success.

I was not expecting to hear what he said.

To a dumbfounded room of people who were certain they were retailing experts, Tindell said putting customers second had been the key to their company’s success.

And who were we to argue? At the time, The Container Store had grown at an astounding 20 percent each year since Tindell and his partner opened the first location in 1978.

Instead of customers, Tindell said they made a point to put employees first.

He meant it, too. While so many companies identify employees as a “key audience” in their marketing plans, The Container Store is one of the few I know that actually has real strategies for appealing to that audience.

In fact, at the time, the company didn’t even have a human resources department. At The Container Store, HR was a marketing function. “We charge all of our employees with pulling in great talent,” Tindell said. “Grade A talent only wants to work with Grade A talent.”

Attracting and retaining great talent is the company’s highest priority. And Tindell puts his money where his mouth is.

The Container Store pays 50 to 100 percent better than its retail competitors, and offers a 401K plan and medical, dental and vision plans for both full and part-time employees. They also invest 241 hours of training per employee against an industry average of just eight. “We’re wild-eyed fanatics when it comes to training,” Tindell said.

He’s also a big believer in communication. In any company, employees have a natural curiosity about where they work, and they want to be in the know. They don’t want a customer or a friend telling them something they read or heard about their employer. The only way to build a sense of inclusion is to keep everyone looped in. Tindell and his executive team work to do that constantly.

“We have a huge moral obligation to make sure employees look forward to coming to work each morning,” he said. At the time of the conference, the company had 11 percent annual employee turnover versus a retail industry average of 100 percent. Clearly, Tindell was focused on what he considered to be an important personal responsibility.

Why the fanatical focus on employees? Because employees who are positively engaged and challenged deliver excellent customer service. A disengaged, under-compensated, under-trained, unappreciated and unhappy employee doesn’t. It’s no more complicated than that.

Look at Chick-Fil-A’s performance over the past 30 years. Do they have the best chicken sandwich in the business? Most would argue they do. But as good as it is, they didn’t vault from a mall food court brand to America’s number three QSR brand behind McDonald’s and Starbucks based solely on their food. They did it because year after year, they exponentially outdistance their competitors on customer service. That doesn’t happen with unhappy employees who don’t feel appreciated or taken care of.

Like Chick-Fil-A, The Container Store’s goal is to deliver what they call “astonishing customer service.”

Anyone who has ever visited one of the nearly 100 Container Stores knows they make good on that promise without exception. Tindell and his leadership team have created an achievement-oriented culture with a balance of challenge and reward, and it is simply more fun to work and perform in an environment like that. Customers spread the word on their good experiences driving more traffic and positive experiences and the sales and profits ring up.

In 2007, at the time of the conference, Tindell said it was a profit strategy that had driven his company to more than $500 million in sales. This year in 2019, The Container Store expects to approach $900 in revenue. Tindell would describe that with two simple words: competitive insulation.

Employees are the ones charged with creating great customer experiences, and when they deliver, they create for their employer a competitive advantage that is extremely difficult to match. Thirty years of positive results is enough to declare The Container Store’s strategy a winner.

MIKE SULLIVAN is President of LOOMIS, the country’s leading challenger brand advertising agency and a top Dallas advertising agency for digital, social, mobile and user experience. For more about challenger branding, advertising and marketing, leadership, culture and other inspirations that will drive your success, visit our blog BARK! The Voice of the Underdog and catch up on all of our posts.

For more about LOOMIS, or to discuss how we can help your company succeed, CLICK HERE

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Mike Sullivan

President at LOOMIS, the country’s leading challenger brand advertising agency

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