Wednesday, December 06, 2006

Tim Hortons - Modernize Your Thinking

My blogging will be lighter over the next two weeks as I am back home in Ontario Canada visiting my family, but I will post as I can. Being back here, I got to thinking about an interesting retail phenomenon in Canada - Tim Hortons, which has almost a cult like following here. They started out as great coffee and donuts at an unbeatable price, but have moved into having a great lunch menu with soups and sandwiches too. All of this coupled with extremely friendly service, in a spotless environment. They offer unbeatable consistency - you know exactly what you are getting when you go in there, and are a staple of both rural and urban life. However some of the companies policies feel a little like stepping back in time.

The first is that they do not accept any form of payment except cash. I am sure they have some great arguments as to why this is a good business practice (low transaction amounts and speed of checkout) but whatever they are it seems that this came out of status-quo thinking. Not only is the policy not well signed (people can get all the way to ordering only to find out about the cash only policy), but they don't even offer alternatives (in-store cash machines). This policy feels like an un-innovative solution to the wrong problem.

A second interesting fact is that they appear to have no interest in building a relationship with their customers beyond that of a sales transaction. Somehow their own success has duped them into thinking that they know better than their own customers. On their web site under the FAQ section I found the following response to the question of "I would like to submit an idea to Tim Hortons":

"Tim Hortons is approached about many ideas, suggestions and new product concepts. Unfortunately, we are unable to accept unsolicited ideas. We rely entirely on our own advertising, research, marketing and product planning departments for the generation and development of new concepts. We thank you for thinking of us, but must decline to avoid the possibility of future misunderstandings"

Come on guys - do you honestly believe that you know better about what your customers want then they do? The Tim Hortons myspace page makes it obvious that the advertising/ marketing team needs a serious lesson in new economy marketing...

Tim Hortons is definitely a retail success and has found a way to build a loyal customer following, through good products and services. The will continue to grow as they expand into new territory, but I question if they are somehow limiting themselves with decision making that is so obviously not focused on building better relationships with their customers. They already have what many companies yearn for - loyal customers. By modernizing their thinking they could capitalize on their most underutilized asset -their customer.


Justin Beller said...

Kevin - you and your readers may be interested in a related post I have on my organization's blog at:

Tim Horton's has obviously built some kind of brand if you describe them as having a cult-like following in Canada. Still, this brand defies logic behind brand building with what you describe ("cash only" and "we won't take your suggestions").

So, I ask, what is your experience and your emotional relationship with them?

Kevin Donaldson said...

They definitely have a brand and its connected with the culture of being canadian. Hard to describe. Maybe the history of Tim Horton being a hockey player, its place in rural canadian culture - sometimes its hard to understand exactly what drives a brand, but it is there. Personally, I am connected to the product and brand as others. These types of policies feel like knee jerk reations to solve issues that aren't well thought out - so although I will still eat there, its unlike that I would want to work for a company with this type of thinking. They could do so much more.