Monday, February 14, 2011

Internal Marketing Pays Off: Wegmans

The authors of the annual Fortune "100 Best Places to Work For" list make some wonderful points about why satisfying employees (part of internal marketing) makes good business sense. They note that senior managers at these companies genuinely care about the well-being of their employees, and great workplaces can be found in any industry.

The number one reason is truly the bottom line: It's profitable to treat your employees well. If I had invested in a portfolio of the stocks of the companies on the 1998 list (the first year it was compiled) and then changed my portfolio to reflect the 100 companies on every subsequent list, my annualized return for the 14 years would have been a bit more than 11% per year---far better than the overall market.

Wegmans, the grocery chain based in Western New York, has been at or near the top of Fortune's list for years. This year, it's #3, and it celebrated by offering free cake to customers in every store. "There is nothing more important to us than being a great place to work,” said CEO Danny Wegman. “When our people feel valued and cared about, they make our customers feel the same." [italics are mine]

Customers do indeed feel valued and are incredibly loyal to Wegmans. Alec Baldwin has filmed two commercials for Wegmans, which is one of his mother's favorite places to shop. The company has an active blog and is on YouTube as well as on Twitter (15,000+ followers) and Flickr.

Marketers in any industry would be lucky to have customers who feel as strongly as the loyal customer base at Wegmans. They keep buying from the chain year after year after year (and introducing their friends to the Wegmans experience). Not surprisingly, Wegmans' customers have a heart too: They've increased their donations to hunger relief at the checkout, with the proceeds going to stock local food banks.

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