Expert Mode: Turning Your Biggest Complaint Into Your Biggest Competitive Advantage
This article was based on the interview with Courtney Owumi, VP of Consumer Experience and Membership Engagement at Shipt by Greg Kihlström, AI and MarTech keynote speaker for The Agile Brand with Greg Kihlström podcast. Listen to the original episode here:
As marketing leaders, we are conditioned to view customer complaints as fires to be extinguished. A persistent pain point is a flaw in the system, a bug to be patched, a process to be optimized. We gather the data, we validate the sentiment, and we task our teams with smoothing over the friction. But what if the most common, most fundamental complaint about your business isn’t a flaw to be fixed, but a feature of the business model itself? What if addressing it requires not a tweak, but a fundamental challenge to the way you generate revenue? This is where true organizational agility is tested—not in the speed of response, but in the courage to act on insights that question everything.
This isn’t a theoretical exercise. It’s the reality for any brand operating in a complex ecosystem, particularly in third-party marketplaces where value chains are long and transparency is often elusive. Shipt, the same-day delivery service and wholly-owned subsidiary of Target, found itself facing just such a challenge. Their customers, like those of their competitors, consistently pointed to a “cost trifecta”—markups, fees, and tips—as a primary source of friction and a driver of churn. Instead of accepting this as an unavoidable cost of doing business, Shipt’s leadership team took a harder look. They identified the one lever they could control and used it to architect a bold, strategic move that transformed their value proposition for their most important customers, turning an industry-wide problem into a powerful, differentiating asset.
Confronting the Unsolvable Industry Problem
In any third-party marketplace, there are realities of the business model that are often taken as given. The platform doesn’t own the inventory, so a margin must be added. There are operational costs, so fees are necessary. And gig-economy workers need to be compensated, so tips are encouraged. Most companies treat these as immutable laws of their industry. Shipt recognized this reality but refused to be constrained by it, choosing instead to dissect the problem and find a point of leverage.
“The cost trifecta…these issues are industry issues. When you are in a third-party marketplace, it is the most pervasive issue for your customer perception. It is also inherent to the business model… Markups is a lever that we own, that we can control. So that’s how we landed on, this could be the thing that could change the industry.”
The lesson for leaders here is one of surgical precision. Rather than attempting to boil the ocean by addressing every component of the cost trifecta, the team at Shipt focused their efforts where they could have the most control and impact. They couldn’t eliminate tips for their shoppers or regulatory fees, but the markup on products was a lever entirely within their control. This decision to focus on what was controllable, rather than being paralyzed by what wasn’t, is a hallmark of strategic maturity. It demonstrates a deep understanding of their own business model and the courage to manipulate a core revenue stream in service of a greater long-term goal: building unshakable customer loyalty.
The Scalpel, Not the Sledgehammer: Targeting for Maximum Impact
Once the “what” was decided—eliminating markups—the “who” and “how” became the critical next steps. A universal price adjustment across the entire platform would have been a monumental undertaking with staggering financial implications. Instead of a broad, and likely diluted, gesture, Shipt opted for a highly strategic, targeted approach. They identified a specific, high-value segment where this benefit would resonate most powerfully: members of Target’s new loyalty program, Target Circle 360.
“We wanted to encourage folks to really explore that third-party marketplace and really understand the full breadth of benefits that they have access to… we felt like if we were going to make that investment, that would be the place that would have the biggest benefit. And it opens the door for Shipt to be able to talk to millions of new customers.”
This is a masterclass in investing in customer experience where it will generate the highest return. By tying this significant benefit to the Target Circle 360 membership, Shipt achieved several strategic objectives at once. They provided a powerful, tangible reason for Target’s best customers to engage with the Shipt marketplace, driving cross-shopping and adoption. They created a competitive moat that other delivery services couldn’t easily replicate. And perhaps most importantly, they turned a CX investment into a powerful enterprise asset that strengthened the bond between Shipt and its parent company, Target. It’s a move that showcases a sophisticated understanding that not all customers are the same, and that sometimes the most impactful initiatives are those reserved for the ones who matter most to your long-term growth.
From Insight to Action: Navigating the Internal Labyrinth
Of course, a strategic decision of this magnitude is never as simple as flipping a switch. The journey from insight to market reality is fraught with internal hurdles. For Shipt, bringing this vision to life required navigating two significant challenges that will be familiar to any leader trying to drive change within a large organization: securing executive buy-in for a high-stakes bet and then translating a complex business change into a simple, compelling marketing message.
“How do you take such a complicated message that is not mass, right? It is for a certain group of people and how do you make it something that is an easy get, that is exciting and that conveys, no one else is doing this and the value it can bring… through message testing and understanding how we can deliver that message very clearly, we were able to do so.”
The first challenge was building a business case on a foundation of “very little information,” as Owumi notes. This required a leap of faith from leadership, grounded in customer insight and a pilot program, but a leap nonetheless. The second challenge fell squarely in the marketing domain. Communicating the absence of something—in this case, markups—is notoriously difficult. It requires educating the customer on an industry standard they may not have been fully aware of, and then positioning your brand as the one that has solved it for them. This had to be done simply, powerfully, and, as Owumi alludes, with the careful guidance of legal partners. The success of the initiative depended not just on the operational execution, but on the ability of the marketing team to make a complex, behind-the-scenes financial change feel like an exciting, must-have customer benefit.
Rethinking ROI: When Lifetime Value Transcends the Transaction
The results—multi-fold growth in order volume and a double-digit increase in cross-shopping—speak for themselves. But the most profound impact of this initiative may be how it forced Shipt to evolve its definition of value. Traditional models of Customer Lifetime Value (CLV) often lean heavily on transaction-level profitability. This move turned that model on its head for an entire customer segment.
“This flips our profit model on the head for this select group of customers… these Circle 360 members inherently have less revenue attached to their orders, but they are ordering and they are extremely valuable. So how do we think about changing our our definition of value to understand, how do we continue to invest in the right groups of customers.”
This is the kind of forward-thinking that separates leading organizations from the rest. Shipt recognized that the value of these members wasn’t just in the margin of a single order. It was in their increased order frequency, their loyalty to the ecosystem, and their engagement across the broader marketplace. This shift requires a more holistic measurement framework, one that connects CX sentiment directly to business behaviors. It’s a journey Shipt is still on, but it’s the right one. It acknowledges that in a subscription and loyalty-driven world, the most valuable customers are not always the ones with the highest margin per transaction, but the ones who are most deeply and consistently engaged with your brand.
Summary
The story of Shipt’s no-markup initiative is more than a successful case study in customer experience. It is a playbook for strategic courage. It demonstrates that the most entrenched, industry-wide customer pain points are not liabilities to be managed, but opportunities for bold differentiation. By isolating a controllable lever, targeting the investment for maximum impact, and navigating the internal complexities of execution, Shipt created a powerful competitive advantage that is difficult to replicate. It serves as a powerful reminder that true customer-centricity isn’t just about listening and responding; it’s about being willing to challenge your own foundational business assumptions in service of the customer.
For marketing leaders, the implications are clear. Our role extends beyond messaging and campaigns; it is to be the voice of the customer in the rooms where strategic bets are made. It’s about building the business case to invest in long-term value over short-term margin and championing the idea that the best way to grow your business is to solve your customers’ biggest problems—especially the ones your competitors have deemed unsolvable. As technology like AI continues to accelerate our ability to move from mining data to acting on it, the organizations that will win are the ones that, like Shipt, combine insight with the organizational courage to build what comes next.
