This Week's Herman Trend Alert

HR in Normal 2.0

  The Herman Trend Alert

April 7, 2010

Money is King in 2010 and Beyond?

The recent prolonged economic downturn has shifted consumer values---for both external and internal customers. In a drastic change from its 2008 findings, Colloquy's 2010 Retail Loyalty Index found that low prices have replaced customer service as the top driver of customer loyalty.

Not surprisingly, lowest-priced Walmart emerged as the dominant retailer in many categories---reflecting a reality of the Great Recession. Costco, known for great service and the dominant 2008-index retailer, had the highest customer loyalty ratings in three out of five of the Mass Merchant regional categories.

Regionally in the Grocery Sector, Kroger in the Midwest, Publix in the Southeast, and H-E-B in the Southwest all bested Walmart. These chains offer low prices and higher levels of customer service. (From experience, we can tell you that H-E-B is simply the best-run supermarket chain with the highest levels of customer service we have encountered anywhere; their long employee tenure and high employee engagement are the reasons.)

For a complete analysis of COLLOQUY's latest study, download their white paper titled "RetailTALK: What Price Loyalty?" at

In other survey results released recently by Accountemps, 46 percent of CFOs surveyed said "bonuses were the most effective way to acknowledge a job well done; only 21 said time off was the best way. Other types of rewards deemed popular were departmental gatherings (15 percent) and tickets to events (4 percent).

"When resources are limited, rewarding staff with extra time off . . . or a department celebration. . ., can help boost spirits and motivate teams," said Max Messmer, chairman of Accountemps.

(Better yet, we suggest when financial resources are not available, ask employees for their best no-cost ideas. We have seen some amazing results from this facilitation.)

We suspect these same attitudes are present around the world. When money is tight, cash is king. As economies slowly recover, we expect to see a shift back to the importance of customer service and time off for external and internal customers respectively. However, as you read in last week's Herman Trend Alert, we expect India, Brazil, and Costa Rica to lead the way.

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