Loyal Employees = Loyal Customers?

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I saw this interesting sidebar in a recent CRM Magazine article on loyalty programs.

SIDEBAR: Loyalty from the Inside Out

If your employees aren’t loyal, it’s hard to imagine your customers will be. Dianne Durkin, president and founder of consultancy The Loyalty Factor, says younger employees are notorious for job-swapping — and, as with customers, it’s far more costly to acquire and train a new employee than it is to retain an existing one. It’s imperative that a company hire people who fit its culture, and invest in the “little things” that will entice them to stay.

“The two most underutilized words in the English language are ‘thank you,'” Durkin says. Forget high salaries and bonuses; employees really want appreciation and recognition. Whether it’s a simple “Good job!” or a handwritten note placed on a desk — no emails! — the personal touch makes employees feel not only relevant but important.

Given today’s high turnover rate, employers need to understand what does contribute to employee loyalty. Durkin ranks the top factors, in order of descending importance:

  • Vision and purpose: Make sure employees have a solid grasp of company direction and what they contribute to the corporation.
  • A learning environment: Provide an opportunity for growth and responsibility. People have a short attention span; they’ll be more likely to stay if they’re challenged with new and interesting projects.
  • A fun environment: The workplace has to be an enjoyable space to interact with others. Staffers will treat each other (and customers!) better.
  • Modern technology: Employees using advanced technology outside of work expect the same at work.
  • A good salary: People need adequate compensation for the work they’re doing, but it’s not foremost among their concerns.

Southwest Airlines is one of the few airlines to make it to the top of the consumer-loyalty list, in part because its employees are extremely happy as well. When Durkin asked why they choose to stay, employees responded, “Because this is a company that loves us back.” Passengers, in turn, say humorous crews and in-flight games make Southwest a joy to fly. “If you’re a businessperson on one of these flights,” she says, “don’t plan on doing any business.” (She means that in a good way.)

Some firms have even embarked on rewards programs for employees. Points can be awarded to recognize achievement or as a display of gratitude, and can be redeemed for rewards at the company store. Before launching any programs, Durkin suggests asking these essential questions: What is the level of pride and commitment in the firm? What are the firm’s top three strengths? What are its top three areas of development? What do you personally need to increase your productivity and efficiency? What is the one message you’d give to your firm’s leader? Those answers will help develop the appropriate programs that will drive employee — and then customer — loyalty.

Really great observations. I think for growing and emerging companies, since customer (and revenue) acquisition is so critical, there is less time for planning for employee growth and retention. Let’s look at these accounts below on the interview processes at Google and Microsoft. As we hear, Google is the best place to work ever, with free food, laundry, commuter buses from all over the Bay Area, and a comprehensive set of other benefits.

Post 1, “Back to Microsoft,” covers a senior engineers decision to rejoin the Microsoft team because he wanted a more defined career path to a meaningful management career. And in this other post, a European engineer talks about interviews at Microsoft and Google. The decision was a no at both organizations, but his criticism of the Google process was that it was a bit immature. Each candidate was interviewed as if they had zero experience, and would join as a junior employee. This offers a fresh start in some ways, but can be insulting if you feel your prior experience is a valuable contribution to the team.

Going back to the sidebar, the things that increase employee loyalty are largely free or inexpensive.  All it takes is putting the employee first. And when the employees feel rewarded and treated well, they will do the same to your customers. At the end of the day, isn’t that what we want? More happy customers?

Investing in happy employees looks like a wise investment to me.

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