What Tractor Supply's Predicament Teaches Us About Our Own Customers
Liberal or conservative customer friction lives in every customer database, presenting risk and opportunity.
On July 1, the Wall Street Journal reported that Fortune 500 rural lifestyle brand Tractor Supply canceled all its DEI and environmental efforts due to conservative customer backlash. Hollywood director and conservative activist Robby Starbuck sparked the backlash with several social media posts that quickly gained traction with Tractor Supply customers.
Following Tractor Supply’s decision, the National Black Farmers Association called for the resignation of the CEO. Several employees, including a store manager, quit. More will follow.
At first glance, this story feels like an outlier, something that happens to other companies, not yours. If you live in an urban or inner suburban area, you may have never heard of Tractor Supply, even though it generates almost fifteen billion in annual revenue and has some 50,000 employees.
Customer Value Friction Prevents Conversion Every Day
Similar to Tractor Supply, your market makes decisions every day whether or not to buy your product, and customer personal values shape those decisions. While Tractor Supply’s predicament is public, value friction exists in every customer market. More often customers voice their displeasure by simply not buying a product and moving on to something that fits better.
While potential value friction with your customers may seem like a problem, it’s also a significant opportunity for fueling growth. By understanding and addressing potential sources of friction, you can not only eliminate friction, you can open up new business opportunities. Just as you might try to reduce friction by simplifying the steps to purchase on a website, value friction is something you can address to increase conversion rates.
Values can act like oil running through your business and into your markets to drive growth when alignment is strong. With strong alignment, customers know they want your product based on its affinity with who they are and how they want the world to see them. Values alignment triggers “motivated reasoning,” the desire to have a product while deflecting any product criticism. It’s one of the most powerful outcomes of value alignment for growth, speeding purchases, and increasing loyalty.
Getting Beyond the Default Settings to Generate Growth
Businesses often project a set of “default” values derived from the people who originally founded the business or where the business is. These values form culture, eventually expressed as a “badge” to the market. It’s part of the human nature behind a growing business. Internal culture becomes a driver for external communication - for better or worse.
The strategic decision every business needs to make about values and culture is one of squaring the projected values with market opportunity. This is how a business can get beyond its default settings to drive more efficient growth - to understand more overtly how the market thinks, where the growth potential is, and how to align with it, without judgment.
Tractor Supply created its mess by creating value friction with the market without knowing it. Internal programs became external badges that did not fit its market.
To avoid the mess, Tractor Supply could maintain the same programs around DEI and the environment, but make them less of a badge to the market. In other words, separate internal values from those expressed in the market. It’s a lesson for any business that wants to focus on growth and market fit while still doing what it believes is right.
It’s a simple decision, but so few businesses think about it. Given that the country is firmly sorted between liberal and conservative customers, no business is going to convince anyone to switch sides by projecting its values. The exercise of projecting internal values to the market is little more than the business patting itself on the back while possibly increasing risk with the marketplace.
Customer Reports Rarely Tell You Anything About Customer Values
Value friction happens every day and is largely undetected because customer database reports don’t reveal it. Database reports often generalize who we sell to by giving us an “average” view of customers. Or we look to segmentation studies that rely on demographics and vague descriptions. All of this misses the unique ways your customers view the world through their values - how they think when they look at your marketing and products.
Today’s customer “insights” focus on looking through the eyes of the business at customers. What’s needed is to look through the eyes of customers at your marketing - to determine if there is value alignment or not. It takes pushing aside any personal values to think about your customers more as “pluralistic” - made up of groups of people who think quite differently and may be quite different from you or me. Only then can we start to understand that a deeper human connection is possible.
The First Question to Answer
The first step to growth through market values alignment is to determine if projecting internal values is critical for the business. The answer may be yes or no - either answer is fine as long as it’s intentional.
If you decide that projecting internal values is important, then you have to double down on the customers that align with your values. For example, if you determine that projecting liberal values is important, then focus on customers who live in inner suburban and urban areas.
If projecting internal values is not important to you and you want your marketing to reflect market possibilities, then take a new look at your market through your customers’ eyes. Look at where they live, how old they are, and any other indicators of their values and worldview.
Ask customers questions about how they view the world vs. what features they like the most. Then compare customer views with what you are projecting on your market. The result will be relatively easy and low-cost adjustments that will yield growth with a far deeper human connection with your market.