A new customer-focused marketing campaign helped Tesco grow its operating profits by 30%
Tesco in recent years
Tesco has hit the headlines many times over the past five years with a stream of bad publicity, from the ‘horsemeat scandal’ to large corporate fines. This has resulted in decrease in sales and a negative public perception.
But it has been able to turn this around with a new business focus and strategic marketing campaign. It has been working on a long-term strategy that has been pushed strongly by CEO Dave Lewis since his takeover of the business in 2014.
So, how has the company been able to re-engage with its customers?
Solving problems, not promoting discounts
Tesco changed its method of marketing by looking at solving the problems that its everyday customers face. It identified that customers no longer responded to mass marketing campaigns full of ‘buy one get one free’ offers or discounts.
It looked at its own business and marketing through the eyes of its customers. It realised that customers wanted to see real people and real stories in marketing, not the best bargains of the week.
With this new customer perspective in mind, it developed its new marketing campaign, ‘Food Love Stories’, the most notable being Alice’s ‘Peacemaking’ Cupcakes.
Each campaign under the ‘Food Love Stories’ banner features a member of a typical family, making a set dish for a specific reason. They show how Tesco’s products can solve any family problem, which brings the supermarket right into the heart of the home. The adverts break the fourth wall, which many marketing campaigns fail to do.
Breaking the fourth wall brings the the campaign into the home by delivering a direct message to the customers. This technique allows customers to reflect upon their own home situation and relate more deeply to the campaign.
Alongside each, there is a full video guide showing how to make each meal used in the adverts. These give customers a fully-immersive experience and deliver an extended customer experience through memorable marketing.
By looking at its own marketing and fully understanding its customers, Tesco has been able to generate higher operational profits and streamline its product ranges according to what customers want.
It was clear after the recession that many consumers started looking differently at their own money, and the ways they could cut costs or make savings. This, in part, brought about the rise of discount supermarkets such as Aldi and Lidl, whose combined market share has grown by 75% since the summer of 2013 *.
Like the big four supermarkets, there was a long period of time during which Tesco’s marketing campaigns focused solely on price, as it believed that’s what its customers wanted to see.
This resulted in them losing their position and perception as a large brand. Leaving them a market position limbo of not being a discounted store, but also not the Tesco brand it had built years before.
Now, it has positioned itself back in the market as a key player, by focusing not on price but on its customers and their lifestyles. Showing real customers how easily Tesco fits into their lives and solves everyday problems we all face.
It’s easy as a business to try to appeal to a mass audience, much like Tesco has in the past. But it always ends the same way. A loss of customers and market share. What businesses need to accept is that they can choose their customers.
This will help them position themselves in the overall marketplace, and deliver marketing messages to customers who want to buy from that business. Building relationships that will last and a confidence in that brand.
Customer focus is key
Tesco has tried many tactics over the past ten years to engage with its customers. But its customer focus marketing has helped it to increase its profits*.
It has only been by truly understanding its customers that Tesco has been able to restore its reputation, build its brand and increase its market share. It has created messages that speak to its target audience, and has resulted in improved sales.
If you understand your customers, you can bring your business in line to work with them. After all without our customers’ trust and loyalty we have no business.
We help business understand their customers and help them avoid the mistakes Tesco have made in their marketing.
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