Can the Living Wage result in increased brand loyalty and sales?

There are a lot of angles you could take when discussing the Living Wage: Social, Economic, Political…

However, inspired by recent YouGov insights published by The Independent’s bitesize sister publication, i100, I’d like to discuss the Living Wage purely from a retail brand loyalty perspective.

Living Wage = long term brand loyalty?

The i100 article references YouGov evidence that upon their introduction of the Living Wage, people spoke more positively about Morrisons and Lidl.

Makes sense, right? You give your staff a pay rise in the name of paying them enough to be able to live and kind words from Joe Public are not surprising. However, will the introduction of the Living Wage translate into long term brand loyalty and thus increased sales?

In short, no.

Well not in my opinion, not on its own anyway. Let me explain…

I take the view that the Living Wage resonates well with consumers because of the principles it stands for, not merely for the act of increasing the salary of the lowest paid in our society.

That is not me belittling the significance that this will have to those who are due the raise – for me it’s a positive step in the right direction towards a more equal society. However, I did promise that I would discuss the Living Wage from a purely retail brand loyalty perspective so let me take my donkey jacket off again.

Consumers subscribe to authentic brand values

I subscribe to the view, popularised by the likes of Seth Godin, that brand loyalty is formed in part from the relationship a consumer builds with your brand but also how the brand itself makes each individual consumer feel about themselves.

For example, people buy Apple products because it reinforces what they believe about the world and they like what it tells others in society about them – I have taste and I appreciate quality.

The Living Wage is one of many brand values

The Living Wage works in a similar way. The Living Wage becomes another ‘signal’ to consumers about what the brand stands for – “We are General Retailer and we believe in empowerment and enablement of our people through fair pay.”

However, all of the signals broadcast by any brand need to be consistent and authentic, else consumers will smell a fake.

In the case of launching the Living Wage, if the other signals sent off about a brand don’t reinforce the principles of the Living Wage, more cynical consumers may perceive the generous act as nothing more than a publicity stunt. In effect the brand could be seen as ‘wearing the charity marathon shirt in public without running the race.’

Living Wage mind-set = long term brand loyalty

The Living Wage must be accompanied by cultural commitment and consistency in empowerment and enablement. Your entire organisation must live the principles of the Living Wage. This should not only extend to how you treat your employees, but your suppliers too. After all, we are all people and regardless of the CEO, employee, partner or supplier label, our commitment to fair treatment, respect, empowerment and enablement should not change.

I believe that a long term increase in brand loyalty and sales are only possible when consumers see that the Living Wage is not just a one-time publicity ‘event’. Consumers believe the Living Wage is your mind-set as part of a culture of association and, I hope, supplier engagement.

S4RB specialise in helping organisations build better and more effective relationships with their suppliers under the banner of ‘supplier engagement’. But what does supplier engagement mean? My colleague, Alex Fitchett, explores Subjectivity and Supplier Engagement.

Tags: Supplier engagement

David Taylor

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