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A Study on Brand Loyalty: What You Can Learn From Trader Joe’s

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Four years ago, my husband and I moved from a big city in northern California to a tiny town in central Arizona. I went through a tough adjustment period. I missed my family, friends, and my familiar routine. But more than anything, I missed Trader Joe’s.

But last month, everything changed. A big, shiny, colorful, brand-spanking-new Trader Joe’s opened!

My husband, who only goes to the grocery store under the threat of starvation, was completely baffled by my excitement at the prospect of a new place to buy food. As I tried to rationalize my unfettered glee, I started thinking about the “4 P’s of Marketing” and why, even after a four-year drought, I’m still loyal to Trader Joe’s.

Product


First, I love Trader Joe’s products because they are simple. I can pronounce each ingredient in each item I buy, and the list of ingredients doesn’t take up half of each package. Don’t get me wrong; simple does not mean boring. Which brings me to the second reason I love Trader Joe’s products: variety. Whether I’m in the mood for something Indian, Chinese, Mexican, Italian, French, or Mediterranean, I know I can find something to please my palate.

Best of all, if I try something and I don’t like it, I can take it back for a full refund. No questions asked---even if the container is empty. I rarely dislike anything because Trader Joe's products are consistently good.

Marketing Takeaway: The root of great marketing is a great product. Which sounds obvious, maybe. But you have to nail product before anything else. Are you creating a product that your customers will love? That they'll go out of their way to access? That they value?

Price


I spend less money on grocery shopping at Trader Joe’s than I do at “regular” grocery stores, period. I’ve done the comparison-shopping. But even better than that, I know the pricing at Trader Joe’s is consistent. I don’t need coupons. I don’t need a club card. I don’t need to shop on the first Wednesday of each month to get my orange juice for $1.99. It’s always $1.99. And, because Trader Joe’s private labels the majority of what it sells, Trader Joe's doesn’t have to push the cost of name brands to consumers. No middlemen. Ever.

Marketing Takeaway: Don’t rely on gimmicks and discounts to sell your product or service. Decide what it’s worth (do your research), and most importantly, be consistent.

Promotion


Trader Joe’s doesn’t do print or TV ads. Trader Joe’s doesn’t use an advertising agency. Because they don’t have to. Spending money on advertising means they’d have to jack up prices, so they don’t. Occasionally, you’ll hear a radio ad, but those announcements are read by a company employee, not a voice-over actor. All the artwork in the stores is made in-store, by hand, by a team of artists. Yep, artists. Not computers. Each shelf tag, chalkboard, and mural was created with markers, paint, and chalk. What’s not to love about that?

Marketing Takeaway: Don’t spend money promoting your product if your product will suffer because of it. You can build buzz around your product without spending a fortune; it happens all the time. Take advantage of brand loyalists to tell your story for you. When in doubt remember: Authenticity rules.

Place


There’s more to place than location. Yes, Trader Joe’s did the research and determined that a new store would thrive where I live, but the spot on the map is only one part of the equation. For the place to be the right place, there has to be the right atmosphere—one that’s inviting (flowers at the front door) and friendly (crew members in cute t-shirts). That’s what Trader Joe’s does so well. My excitement walking into the new store wasn't just about buying food. It wasn't even about price, product, or promotion. It was about the place. A place where I felt… at home.

Marketing Takeaway: Humans are emotional, and we want to connect. Are you creating an environment where your customers feel welcome? Websites are environments, too, and every click offers a chance to connect. Don’t squander a single opportunity to demonstrate that you value those connections.


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Daniele Hagen (Dani) is marketing services manager at MarketingProfs.

Twitter: @DanieleHagen
LinkedIn: Daniele Hagen

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  • by Claire Ratushny Tue May 8, 2012 via blog

    Hi Daniele,
    I enjoyed your blog post and agree with your observations. I wrote a similar, shorter blog post about Trader Joe's a while ago. There's a lot about TJ's for retailers in all consumer product categories, not only the grocery business, to emulate. After all: why wouldn't they follow a blueprint for success? Enjoy reconnecting with Trader Joe's again. . .I know what you mean. I'd miss it if we moved to another area without one too!

    http://www.writestrategy.biz/main/viewpost.aspx?PostId=8664dbf4-a151-47f5-a2a3-50c26baf9ffc&Title=hat-an-e-earn-from-rader-oes.

  • by Brian Burkhart Tue May 8, 2012 via blog

    Trader Joe's does a lot more correctly than incorrectly. One big thing only slightly discussed in your piece is the people. Yes, you said they were friendly...which is true. The other big thing the employees truly seem to be is knowledgeable. Ask any associate about anything in the store and they know.

    Traditional grocery stores have specialists...produce guy, meat department, bakery, etc. As TJ's is so totally different, you have to give them kudos for recognizing employees need to be generalists. Now, I'm sure my comment is akin to painting with a broad brush. I too have met the TJ's guy who is clearly the go-to, in-store wine expert. Or the associate who knows the coffee aisle best. But overall, TJ employees are really good at knowing the huge variety of products inside and out, across all departments.

    For a store that sells predominantly private-label products, you have to hand it to them, they rock it out!!!

  • by Steve Johnson Tue May 8, 2012 via blog

    Thank you for a firsthand and very insightful analysis of the Trader Joe's brand. I recently contrasted Trader Joe's with Whole Foods http://www.myprintresource.com/article/10645549/johnsons-world-shopping-for... by looking at each organization's approach to customer service. The reaction was higher than normal. Both organizations have fans and detractors. I daresay that a story about the mainline grocery chains would garner only yawns. The fact that you were moved to pen this post at all speaks volumes for the success of Trader Joe's mystique.

  • by Suzanne Tue May 8, 2012 via blog

    I love TJs too! When we moved from San Francisco, one of my criteria in places to move to was proximiy to a TJ. I love thattheir prices are consistent, their portions aren't huge, and the variety of foods allow me to try new things regularly without feeling like I'm making a huge money commitment. I agree that having ingredients that aren't loaded with chemicals is a big plus.

  • by Daniele Hagen Tue May 8, 2012 via blog

    Hi Claire,
    Thanks so much for the comment! Glad to know there are other TJs fans out there willing to praise them publicly.
    Daniele

  • by Daniele Hagen Tue May 8, 2012 via blog

    Hi Steve,
    Pondering a story about a "mainline grocery chain" makes me...
    Sorry, fell asleep. Better have a sip of my Trader Joe's Bay Blend coffee!
    I appreciate the positive feedback.
    Going to check out your article--I have some strong feelings, both pro and con, about Whole Foods, but that's another post.

    Daniele

  • by Daniele Hagen Tue May 8, 2012 via blog

    Thanks, Suzanne!
    What's your favorite TJs product? Is there one you tried on a whim and loved?

    I swear by the Low Fat Parmesean Ranch Dressing. It is the best low fat dressing on the market (in my humble opinion).

    Daniele

  • by Paul Barsch Tue May 8, 2012 via blog

    Daniele, enjoyed this. One of the things I appreciate about TJs - and characteristic you alluded to, is premium products at a fair or low price. As an example, go to Costco and you'll get premium albacore tuna (privately labeled Kirkland) at a great price. You also have to buy 6-8 cans at a time! Same premium quality is avail at TJs, but you can buy 1-2.

    TJs offers premium products, without having to buy in bulk (sometimes a wasteful strategy due to spoilage).

  • by Daniele Hagen Tue May 8, 2012 via blog

    Brian,
    You are so right. And, if a Trader Joe's crew member (they are called crew members, not employees or staff) can't answer a question, they will always make sure someone else can.
    I also appreciate that the crew has tasted just about everything in the store. They can give honest opinions, like, "If you like spicy, you'll love this new simmer sauce." Or, "If you're not into tangy, you might want to skip this yogurt."

    Daniele

  • by Daniele Hagen Tue May 8, 2012 via blog

    Hi Paul,
    Thanks for commenting.
    I totally agree! With just 2 people in my household, I don't need 7 pounds of pasta at a time. I don't waste food when I shop at TJs. Another value prposition, thanks for pointing it out.
    Daniele

  • by Michael O'Daniel Tue May 8, 2012 via blog

    Daniele, you pretty much nailed it. Let me expand a bit, however, on the Promotion area. TJs does run regular schedules on radio, varying, I assume, from market to market depending on the competition. Their biggest Promotion expenditure would seem to be direct mail - the "Fearless Flyer," "occupant" rather than individually addressed, undoubtedly in targeted zip codes. And there's always a stack in the store itself. This is a good way to introduce or highlight products, although if it were me, I would try to do this via periodic emailings because I think there is so much waste in the current approach. But TJs already flies in the face of conventional wisdom in many other areas, so let's give them a pass on this one. They have, I see, upgraded their website to pitch specific products as well.

    My biggest quibble with TJs is that they discontinue products without notice, or run out of stock and are vague about when the product will again be available. That seems to vary from store to store and depends on how well the staff have been trained. Finally, a tip for all, offered without cost or obligation: if you're a dark chocolate junkie, buying the 12oz bag of semisweet chocolate chips may satisfy your cravings more cost-effectively than one of the more expensive bars. (Now they'll discontinue the chips!)

  • by Daniele Hagen Tue May 8, 2012 via blog

    All very good points, Michael. I do think TJs could do more electronic outreach.

    What I've heard is that TJs will discontinue a product if the supplier wants to jack prices up beyond what Joe's thinks is reasonable. So I guess, in a way, they are looking out for their customers when they do that, and staying true to their core value of reasonable pricing.

    Now I want chococolate...

    Daniele

  • by Daniele Hagen Tue May 8, 2012 via blog

    Correction: proposition.

  • by Tobias Schremmer Tue May 8, 2012 via blog

    Awesome piece!
    (Disclosure: Daniele is a MarketingProfs colleague and a pal).

    I shared your excitement when we recently found out that TJ is (F.I.N.A.L.L.Y.) coming to Austin.
    http://www.statesman.com/business/trader-joes-coming-to-downtown-austin-next-year-2311879.html

    One more point about "Place" I would add is that they seem to do well picking store locations. For example, the Austin store is slated to be adjacent to the iconic Austin Power Plant (and just a short hop from Whole Foods world HQ/flagship store). The TJ's that opened in Brooklyn when I lived there took over a landmarked, high-ceilinged bank on Atlantic Ave. That just adds that extra vibe, that this trip to the store is not just a trip to the store. Similar in some ways to what Apple has done with retail.

    Here is a really good article from 2 years ago that delves into TJ's business model in much more detail:
    http://money.cnn.com/2010/08/20/news/companies/inside_trader_joes_full_version.fortune/index.htm

  • by Danette Tue May 8, 2012 via blog

    Now I wish we had Trader Joe's !!!!!!

    Great article !

    Danette

  • by Susan LaBelle Tue May 8, 2012 via blog

    Daniele,

    Loved your concise description of the marketing lessons from TJ's. One thing that makes me crazy at most stores--food, clothing, whatever--is that they train their employees to ask if you found what you were looking for today. Try saying "No, I wanted X and you don't have it" at most stores. The employees will just stare at you. The company doesn't train them in actual answers, just to ask the question.
    At TJ's if you say you couldn't find something you wanted, the crew members have an answer--if they still carry it, when it will be coming in, if others have asked for it. They have even called me when an item that was out of stock came in. That is how you earn customer loyalty.
    A marketing lesson for all--don't solicit customer feedback if you plan to ignore it. Your customers will quickly migrate to a competitor who listens.

  • by Karen Loomis Tue May 8, 2012 via blog

    I have a girlfriend who use to live in AZ near the Trader Joes in Ahwatukee. She moved 8 years ago and has been pining about the lack of Traders Joes in Sarasota, FL where she lives. She has people ship her her favorite items, or while visiting sends a care package back o FL. Now that's true love!

  • by Stan Aaronson Tue May 8, 2012 via blog

    The thoughts herein are candid, thoughtful, articulate and represent the similar thoughts of thousands of consumers. It is extremely gratifying to have the author format the article using the 4P marketing stratagems -- a format that retains its relevance and veracity in spite of those who choose to demean 4P strategy. Adding to the author's comments, TJ's has yet to rely on social media platforms to expand its promotion stratagem; apparently because its primary promotional platform is word-of-mouth brand advocacy.

  • by Daniele Hagen Tue May 8, 2012 via blog

    Aw, shucks, T, thanks!

    Here's a little tidbit I learned about Place:
    When stores ask for your zip code at check-out, what they really want to know is where they should build new locations. I am now far less annoyed when I am asked that question. 86301, in case you were wondering.

    Daniele

  • by Daniele Hagen Tue May 8, 2012 via blog

    Thanks, Danette!

  • by Daniele Hagen Tue May 8, 2012 via blog

    Susan,
    Yes! I've had the same experience. I'd rather be told why a store doesn't carry something, or what to try as a replacement than hear, "Oh, sorry, we don't have that." Chances are, the store has a good reason for no longer carrying something. (See reply to Michael O'Daniel's comment above).

    Here's another retail pet peeve: When eating say, a hamburger at a restaurant, and the servers asks, "How does that taste?"
    I want to say, "It tastes like a hamburger."
    I wish servers would ask, "Are you satisfied with what you ordered?"

    Daniele

  • by Daniele Hagen Tue May 8, 2012 via blog

    Right-on, Stan!

    Thanks for the validation. The 4Ps are tried and true. Sure, they can be expanded upon and adapted, but the fundamentals of good marketing remain the same.

    Daniele

  • by Dodie Tue May 8, 2012 via blog

    You forgot one of the most important thing about Trader Joes they have great customer service. Go into Safeway or Lucky's and see if you get the same customer service. It is hard to find anywhere else and many customers notice. It seems people tend to forget the human aspect to what makes a place great. Recently a friend of mine who moved to Maryland told me he had just come from a Trader Joes and he loved going, because the employees always made him feel welcome and invited. He is from California and is familiar with the stores, he said no matter where you shop at a TJ's the people that work there have the same welcoming feel to them. Product is great, but without the people who sale the product it is nothing.

  • by Joy Lanzerotte Wed May 9, 2012 via blog

    Danielle you nailed it on the 4 P's re: TJ's. As a person hired by TJ's for Menlo Park to demo, you know from the get go what it means to be a team player. The training is thorough, you work all areas not just demo meaning change can happen in just a few minutes. TJ's knows exactly what they want from the staff the captain is the leader and is visible! How many of us go into grocery stores and locate let alone know who the leader of the store might be. Also there is no middle man, and HAPPY is what is nourished. From the time we enter with plants all outside to the flowers we smell upon entry it is, as you aptly wrote, home. If you ever want to sample something take it to demo and you are given the chance to do just that before you buy but no pressure to buy. It is the perfect grocery store for a single person though there are no bulk items, many items are presented from little pizzas to pre packaged salads to small veggies/fruits for one. Thank you Danielle for your blog, it's a fun place to shop and to work! KUDOS

  • by Jim Fraser Wed May 9, 2012 via blog

    I also have good memories of the store, but wonder if smallish size and tight target market just makes it easier to be a more focused (and loved) brand than a Stop & Shop or a Meijer, not to mention a Walmart? I'm sure everyone can learn something from them (and Whole Foods) but the important thing is to apply the learning in a way that's right for you.

  • by Kathy Doering Wed May 9, 2012 via blog

    I would add Trust to the list as well. I trust them to provide products that pass their inspection process. It just goes to show you that when you build it right from the very beginning, the rest will just fall into place.
    I drive 30 minutes to shop at TJ's and it is well worth it for all the reasons listed here!

  • by sadie Wed May 9, 2012 via blog

    theres a tj's opening in sarasota with in the year :)

  • by Daniele Hagen Wed May 9, 2012 via blog

    Hi Karen,
    I've actually been to the Ahwatukee TJs. I made a point of going any time I was "down in the Valley." Glad she's getting a Joe's in Sarasota! Maybe your friend will return the favor and send other Joe's deprived friends care packages once her store is up and running.

    Daniele

  • by Daniele Hagen Wed May 9, 2012 via blog

    Dodie, I think the 5th P would be people, for sure.

    Daniele

  • by Daniele Hagen Wed May 9, 2012 via blog

    Thanks, Joy!
    It's nice to hear from an "insider" that the company values proper training and that it is thorough. Very good point about the Captain (store manager) always being visible-it says a lot about how Trader Joe's understands leadership. You have to be present and aware to know what your store, crew members, and customers need.

    Daniele

  • by Daniele Hagen Wed May 9, 2012 via blog

    Excellent point, Jim. What works for one retailer may not work for all retailers.
    I'm going to remember the phrase, "...apply the learning in a way that's right for you." What a great take-away.

    Daniele

  • by Daniele Hagen Wed May 9, 2012 via blog

    Thanks, Kathy! I agree. I trust Trader Joe's.
    Have you ever noticed that if (and it's rare) there is a product recall, they are very up-front about it? I appreciate that. Honesty begets trust.

    Daniele

  • by Emily Griebel Wed May 9, 2012 via blog

    Great post, Daniele! These are tenets we preach to our clients often. You did a great job of summing up how Trader Joe's uses "Big M" Marketing to its advantage. I wrote a similar article featuring the 4 Ps for Talent Zoo. Thought you might enjoy reading it:

    http://www.talentzoo.com/news.php?articleID=12294&ref=articlerss

    --Emily

  • by WritingAce Wed May 9, 2012 via blog

    I love TJ's. My only complaint is when I love a product and either it is out of stock OR, as previously mentioned, is suddenly discontinued. Also, it seems that no matter what time of day I go, they're stocking shelves, sometimes during busy periods which makes it difficult to get around in the aisles. They have the best prices on cereals and I can trust them to carry quality products.

  • by Daniele Hagen Wed May 9, 2012 via blog

    Thanks, Emily. I'll check out your article!

    Daniele

  • by Daniele Hagen Wed May 9, 2012 via blog

    I hear ya, the stores can be crowded. I've learned that after 5 pm is the best bet for easy access at "my" store here in AZ. In California, after 5 was the worst time.
    Daniele

  • by Michael O'Daniel Thu May 10, 2012 via blog

    Interesting, isn't it, that this post seems to have drawn way more comments than most others. And both the post and the comments are largely about personal interaction with the customer! What a radical concept! One of the things that bothers me so much about marketing today -- whether B2B or B2C -- is that we get so hung up on numbers and analytics and do not go into the arena, as it were, to see firsthand what the customer experience is like. Try it sometime!

    Re: Daniele's response to my comment of May 8 about products being discontinued - this is an area where TJs could do so much better with the extra step of on-site, primary market research. They know well in advance when they're thinking about discontinuing products - why not give the customer a say in the matter? If I've become attached to a particular product, and would prefer that it remain available, shouldn't the retailer want to know how much of an issue the price is? Sure, they discontinue products because suppliers raise their prices, or the cost of the ingredients becomes too high, both of which affect the profit margin -- but suppose I'd be willing to pay more, up to whatever point, to have that product available? I already pay more than I'd prefer for certain products at TJs, but that's offset by (a) the overall lower prices on most items and (b) the convenience of not having to make a separate trip to another store just for that one item.

    TJs does so many things well that it's frustrating to me as a marketer that they don't put a bit more time, effort and $$ into improving the final 10-20% of just basic stuff like primary market research. If a 10% increase in your marketing budget resulted in a 15-20-25% increase in sales, wouldn't you want to do that?

  • by Peter Frank Thu May 17, 2012 via blog

    Great Post indeed.

    In addition to your location part, I would say Trader Joe's have more of the product I would buy and less of those I won't. And it all come in a relatively small, lively stores, which saves me a lot of time.

    But unfortunately, their product offering suffers from frustrating, sudden discontinuation. In a sense, I hated them when they do that "to me".
    On the other hand, I don't even remember noticing a product discontinuation in any other chain store. So the positive aspect for them is that they sell products that I (/customers) care about. Looking at the discussion, it's telling that I'm not the only one!

  • by Daniele Hagen Thu May 17, 2012 via blog

    Thanks, Peter. I wonder if anyone from Trader Joe's leadership is following this thread and will take note of the "discontinued item issue." :)
    One can hope...

    Daniele

  • by Eric Antariksa - Marketing Student Sat May 26, 2012 via blog

    Among those four factors, which is the most significant?
    I guess, the product factor. Simplicity and variety. This is great combination. Brilliant product strategy.

  • by Mark Gardiner Mon Jul 2, 2012 via blog

    After 20 years in the ad business, I took a $12/hour job at Trader Joe's to learn how it built one of America's strongest brands, virtually without advertising. If you'd like to get more information and a different perspective on Trader Joe's masterful job of cultural branding, read "Build a Brand Like Trader Joe's". It's available for Kindle at Amazon, and a print edition will be available soon, too.

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