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McDonald's Bank Advertising Week

McDonald’s and Tesco Bank CEOs share top tips to nurture customer-centricity

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By Seb Joseph, News editor

March 24, 2015 | 7 min read

Leadership is a complex and often thankless task, one that McDonald’s UK and Tesco Bank’s CEOs have defined around five principles designed to win the trust of customers and staff.

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You can’t spin or talk your way to trust

Trust in a brand can’t be built through PR campaigns and advertising, warned Jill McDonald, the outgoing CEO of McDonald’s who is set to take the reins at Halfords. Speaking on Oystercatchers’ Advertising Week Europe panel today (24 March), the former marketer urged leaders to encourage their businesses to take action about the things customers actually care about. It is something the fast food chain has spent millions trying to do to quantify trust at corporate level, whether through introducing free range eggs or only using chicken breast meat in its chicken nuggets.

“We take a very long-term view on the profitability [of those decisions] because we believe its mission critical to build trust with customers,” she added. “You need to take action about the things customers care about.

Like McDonald’s, Tesco Bank has had to navigate both its brand and business through tricky times where customer attitudes have threated to have a negative impact long-term. The bank, which became wholly owned by Tesco in 2008 following The Royal Bank of Scotland’s financial collapse, has seen its customer base top seven million thanks in no small part to a focus on customers from the top down, said its CEO Benny Higgins.

Speaking on the same panel, he said: “The only way you can develop trust is by earning it. It takes time. There’s no quick route. You have to behave your way to trust.”

Great leaders lead from behind

Instead of acting like a dictator, great leaders lead from behind, cajoling and encouraging their staff, while moving to the front to take the flak during tough times. Both McDonald and Higgins hailed this type of “courage” as essential to getting staff to buy into their ethos and methods to maintaining customer-centricity.

“In a crisis many panic. It’s a fact,” said Higgins. “A leader then has to show their courage to lead from the front but to be cold and distant enough to be able to deal with it.”

Those moments are the ones of truth. The points that make or break a CEO or marketing boss’s status in the eyes of their staff, Higgins observed. He recounted such a moment several years ago when Tesco Bank ended up locking customers out of its system for five days after a bug in the system derailed one of the biggest financial data migration projects in recent times.

He added: “It was a serious crisis. I made a decision on the basis that we had to change the formation. If you’re getting beat three nil at half time then you can’t go out with the same formation in the second half. I made a chance which enabled people to put a different angle on the problem and whether that that helped fix it or not we did do it in the end.

Be prepared to take the rough with the smooth

The stakes at a corporate level are so high that CEOs have to be prepared to take the rough with the smooth.

It’s easy to be a leader when everything is “happy and great”, said McDonald but you also have to lead from the front when times are tough. It chimes with the ethos behind the previous principle in so far as highlighting the importance of courage in a CEO.

“It’s not just your investors that need to feel confident in your ability but for a business like McDonald’s our franchisees need to feel confident that they are working for a business that can deal with bumps in the road and that you as the CEO are going to lead from the front in those situations,” added McDonald.

The approach very much flows when CEOs are authentic in so far as practicing what they preach. People want to feel and understand what they’re working towards and “recognising that leadership determines culture transcends every other aspect of the business”, said Higgins.

In a customer-centric business, your chief marketing officer is your customer champion

Running a good business that genuinely focuses on making customers lives better means that everybody within that hierarchy has a responsibility to that objective. However, the marketing director needs to be the customer champion. This is how Higgins views the role of the senior marketer within his business, someone who continuously looks at the bank through the eyes of the consumer.

For these views to be heard, marketing chiefs need to be able to ingratiate themselves into an environment that is often alien to them.

“To be a successful marketer in the boardroom you have to speak the same language as the rest of the board,” said McDonald, who has made the transition from marketing to general management during her nine-year stint at McDonald’s.

“You have to understand what the objectives are. Whether that’s creating shareholder value or being mindful of the particular metrics in an organisation. You have to make sure that you’re aligning your language and intent around what the board wants doing. Marketing isn’t a science but the more grounded you can be in terms of the numbers and the returns from recommendations the better,” she added.

The notion that more competition will lead to a better market is a myth

CEOs and their businesses can easily be swept up in the rat race to outdo their rivals at the expense of their customers. Whether it’s trying to appeal to millennials or being seen as innovative, customer-centric strategies can easily be lead astray if the fundamentals aren't nailed down, according to Higgins.

There has to be an acceptance that trust takes time to build, with CEOs balancing the short and long-term when it comes to profitable decision making. In Tesco’s case, this started with the supermarket’s “Every Little Helps” strapline.

“It’s not just a strapline. It’s that notion that nothing is too small or too big if it’s good for our customers and colleagues,” said Higgins.

McDonald said her way of fostering this kind of approach was through customer data “first and foremost”. “We spend a lot of time trying to really get underneath what actions we can take for our different stakeholder groups as well as consumer groups that are really going to move the dial and turn neutrals into advocates and really change behaviour.

In a customer-centric business age, marketing should naturally come to the fore. But this direction is not enough and the discipline needs leadership from the top of the business to ultimately ensure it has a direct impact on the bottom line.

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