Business lessons from Peru's Wong family

By Kate Mulder

Kate Mulder talks with Efraín Wong, who is leading Peru’s legendary Wong family into a new business era.

Business lessons from Peru's Wong family

Efraín Wong, director of Wong

Wong is an iconic name in Peruvian business. As a foreigner, I\‘m amazed at how loyal Peruvians are to the brand; it seems to have a place in their hearts, gives them a sense of trust, a sense of home. As someone who enjoys learning the psychology of consumer behavior, it\‘s fascinating to watch.

The first time I walked into a Wong supermarket, I immediately thought of the book, The Experience Economy, written in by James Gilmore and Joseph Pine in 1999. They define the era of a successful business, teaching and showcasing that "goods and services are no longer enough; it\‘s giving your customer an experience that transforms your business and is the basis for future economic growth."

The Experience Economy has helped revolutionize multiple industries from marketing to tourism and architecture to urban planning, and Wong feels like it could be a case study taken right from the book.

Everything that the Wong brand does seems to exemplify this theory of the "experience economy", and even though the beloved grocery chain is now in the hands of a Chilean company, the family is still involved in multiple sectors creating similar results.

To get a better understanding of the philosophy behind Wong\‘s success, I spoke in detail with Efraín Wong who is directing and leading many areas of Corporacion Wong. It turns out this family didn\‘t need any books – for over 30 years, their approach to successful customer experience was simply good business sense. So until Efraín Wong has the time to write a book, we can all learn from his sound, yet simple advice in this translated and edited version of our talk.

How do you define Corporacion Wong today, after the sale of the supermarkets?
We\‘ve changed our focus into different markets, but not our core values: which have always been related to our customers and our employees. For customers, our goal is to continually provide the best customer service, believing that the customer is always right. In regard to our employees, we care that our employees are taken care of. It\‘s important they feel part of the company and have a sense of ownership.

In addition to customers and employees we focus on two other values: constant innovation and outstanding improvement. Theses values allow us to start from scratch in all endeavors with a good base of knowledge and services. We constantly work to improve at every level.

Where did you get your values?
Our values started as a legacy from our father. It was natural to us. We realized that these values were getting results. So we continued to focus on them.

The bottom line isn\‘t just about money. It\‘s a about doing things right and doing them well, to always go back to the customers. If you are worrying about money, you do things wrong. You limit yourself.

Tell me more about your philosophy on customers.
Well, it\‘s pretty simple: our business is the customer because with no customers there is no business. Our philosophy is to create customers that will be loyal for the rest of their lives, that our customers will send their children and their children, to look ahead to three generations.

This approach started when we first started with the convenience store. Our customers were families and friends from the neighborhood, so our service was more personalized. When we made a jump into supermarkets, we translated that focus on the customer to supermakets. Back then it wasn\‘t customary here in Peru to have good customer service in supermarkets; it was very self-service.

What advice do you have for new business owners and entrepreneurs to create a loyal and trusted brand?
First, it takes a lot of time.

Second, it\‘s important to remember that it\‘s a two-way relationship. If you are loyal to them they will be loyal back to you. If you trust your customers they will trust you back. The idea is here: don\‘t just sell to make a sale. You want them to stay with you for the rest of their life. Your client is for life. Take care of your customers and don\‘t be disloyal to them.

The third piece of advice is to make your customer feel special. When we first started our business, we did a lot of things different than the competitors. In addition, one of our main objectives was to listen to the customer.

We are always open to suggestions. For example, from the beginning we would have customer comments forms that we would read at management meetings. We would take a look into the most important suggestions.

When the customer would see the suggestions they made were implemented they felt like people really listened to them, to their voice. It made them feel special.

So then we adopted this philosophy with complaints. We are open to complaints because it is a good way to get feedback. We believe in solving any problems the customer has, no matter the cost. The cost doesn\‘t matter, what matters is that the customer is happy when they leave. This makes them more faithful.

What is your definition of innovation?
Always doing new things that surprise the customers. Creating new products or services that would blow the minds of your customers. Even if they don\‘t request them. Being open constant change. Constant upgrading or improvement.

For example, we would innovate often in the stores simply by changing the layout of the store or by adding new lines of product. Our customers would constantly feel like they are in a new place, that everyday is different. We like being the pioneers of change, of new things.

Do you have an example of new services you brought?
Yes, fish is a good one. Back in the 90s, supermarkets were afraid of selling fish becuase it was smelly and hard to preserve. We wanted to be the first to offer fish. So we went to other stores all over the world to research how other companies were selling fish. We accumulated this know-how from around the world, and implemented it so well, that even when people came from other countries they were in awe with what they saw.

What gets you excited to wake up in the morning?
I love doing new things and creating new things. I think of all the benefits to my work, and know that I will receive rewards for my work.

What keeps you up at night. What worries you the most?
For example now, I am worried because we have business that are growing way too fast and I don\‘t have all the time I want to develop and train our people. I worry if they don\‘t feel that they belong to the company because it\‘s moving too fast to develop their sense of ownership. For me it is one of the most important values in the company. We aim for the best customer service, and it\‘s impossible to give the good service unless your employees are happy with the company. If our employees don\‘t feel wanted, they cannot treat the customer right.

For example, at International Bakery we have tripled our volumes in a year and a half, it\‘s growing so fast. A sense of ownership is also important in the manufacturing process. You want to do things right because you want to produce a good product. If you feel related to the company and products, you want to give it your best. The people that make the bread, they don’t see the end customer, so they need to feel confident about the company.

What will Peru need to do to continue economic growth and become a leader in the region?
We have a lot of potential, but our challenge is we don\‘t have the population. Emerging market leaders have larger population. But if we focus on getting out of our boundaries and exporting to our regional neighbors, there is lots of potential. With that, we need to find and work with our strengths and advantages that Peru can offer its customers. Much of our growth is based on raw material. What we still haven\‘t done to all these raw materials is, well, we need to add extra value to all of our goods.

Would adding value be a way to sustain economic growth?
It\‘s not just adding value, the challenge here is to also create a brand that has the same or better image than other countries. For example Peru has probably the best cocoa that you can get but customers still buy chocolate from Switzerland or Belgium. Brands from Peru need to promote themselves better. People\‘s ideas of Peru are changing, and we need to make sure Peruvian brands are seen as quality.

A challenge is also that many small businesses here invest in machinery and infrastructure – they buy things. But they often don\‘t invest in training their people or in themselves to gain more knowledge so they can grow.

What is your thought on the future of technology here in Peru?
I think in Peru there are places where we can apply cutting edge technology, but the problem is finding adequate technology for a developing economy. We can bring in the state of the art technology, but it also has to match the work force.

What are some of the other projects you are involved in that people might not know about?
Fisheries, we export anchovies and frozen fish. That requires a lot of innovation to attend our customers in other countries. All of our customers are overseas

We also do sugarcane and fishmeal, we look for the best technology and quality.

We also focus on manufacturing, because it requires constant improvement of processes. When it comes to process, we look develop new ones or improve existing ones. For example, in Peru most of processes in manufacturing require a lot of manual labor, but we work on automation.

What do you see for the future of Peru\‘s business climate?
For Corporacion Wong, the next five years we want to expand to the regional market. Many companies focus on Europe, Asia, the US, but we are right in the backyard of Brazil, a large emerging economy. So we have a huge opportunity there. Companies that export to US, Europe and Asia need to make a big leap in volume and process in order to export. But medium size companies can adapt more easily to regional markets and with more ease.

What is your view on the entrepreneurial spirit in Peru?
I think it is very strong. I have been able to see it first hand and work with many organizations that help young entrepreneurs.

The problem is the mortality rate is high on businesses, and a huge challenge is management. We are missing good management needed to grow these businesses.

Kate is the voice of business, technology and entrepreneurship in Peru.  She currently helps technologies from the US expand to Peru and serves as an advisor for Peru Capital Network – Peru\‘s first formal Angel Investor Network.