Why a small grocery chain is America’s most loved company

It is no accident that some companies have outstanding reputations, building customers for life. The right culture, combined with an obsessive mission to find only the right customers and serve them extraordinarily well, make the difference.

There are companies we love, and companies we love to hate. Building a loyal base of satisfied customers is tough – even for the best. As the Harris Survey released in February 2015 illustrates, a company’s reputation is built by more than a customer’s experience with its product. Every CEO should take a good look at the Harris results, paying particular attention to slides 7 and 19.

Wegmans– a grocery chain that operates in six Northeast states, and turns 100 next year – tops the Harris list. In fact, it is the only company to rank in the top 5 on all six dimensions of reputation that Harris measured. Wegmans is so highly regarded by its customers that they even write love letters to it.

What Wegmans does well

Until fifteen years ago a company’s reputation was largely determined by three factors: our personal experience; the experiences of friends and co-workers; public media. Reputations were easier to manage and, to some extent, capable of being manufactured. Today, the proliferation of the Internet and social media have given word-of-mouth velocity, reach and scale.

In 2015, if the emperor has no clothes the world soon knows about it.

Reputation and customer satisfaction must be earned, not manufactured. Requests to “like us on Facebook” and “write a review on Yelp” (typically only asked once the seller knows the buyer has had a favorable experience) are tactics substituted for what PR departments used to do. At best they are like makeup and good lighting – but eventually, every company has to step into the sunlight.

Wegmans, and companies like it, that garner stellar customer reputations do three things better than average ones:

They build their cultures on a belligerently unshakeable set of customer-centered values that permeates the entire organization, and forms the basis for hiring, training, advancement, evaluation and – when required – dismissals. There is no “opt in” to the culture; it is either “all in” or not at all.
They build a deep and rich understanding of their target customer – beyond product attributes alone, extending into an understanding of the values that characterize their target. Their mission lies beyond transactions, stretching into providing value at all points of interaction. They identify the customers they are best able to serve, and do not permit themselves to be distracted by others whom they are not yet – or may never be – able to serve well.
Everything they do is aimed at satisfying those target customers. They see beyond the immediate product and transaction through to the entire experience. Their aim is to build upon such experiences through every customer encounter.

A Fortune 500 “Best Companies to Work For in 2015” recipient, Wegmans is built upon a set of values that not only permeates its dealings (customer and supplier alike) but mirrors the values of its customers. It stays “small” (within 6 states) by choice. Expanding further risks taking it into markets that it may not be able to serve to the standards it has set; it does not permit its ambitions to expand faster than its capacity to serve its customers extraordinarily well.

The bottom line

Building a strong and loyal customer base lies in a passionate belief in, and relentless focus upon, attracting a customer a company is capable of satisfying, then doing its all to achieve that objective.

There are valuable lessons that can be learned by examining Wegmans closely.

Written by Michael

Michael Douglas has held senior positions in sales, marketing and general management since 1980, and spent 20 years at Sun Microsystems, most recently as VP, Global Marketing. His experience includes start-ups, mid-market and enterprises. He's currently VP Enterprise Go-to-Market for NVIDIA.