If your business is selling retail items, you no doubt have seen the figures that create links between customer satisfaction and loyalty.

But what about employee loyalty? What about the measurements you use to test how loyal your staff are to your company? This interesting quote by Frederick Reichheld compares the relationship between employee loyalty and customer loyalty…

“We found that there was a cause-and-effect relationship between the two; that it was impossible to maintain a loyal customer base without a base of loyal employees; and that the best employees prefer to work for companies that deliver the kind of superior value that builds customer loyalty… building loyalty has in fact become the acid test of leadership.”

Read that last sentence again…he claims that the acid test of leadership is building the loyalty of your staff to your company. Food for thought, eh?

When you think that a “totally satisfied” customer contributes 2.6 times as much revenue as a “somewhat satisfied” customer, it must be worth your while identifying not only what makes people loyal to your business, but also what you can do to build loyalty within your team.

So, how do you keep employees loyal? Real improvements in customer service start with providing superior service and support to the employees themselves. It’s a win/win situation. Treat your employees like royalty, and they’ll treat your customers the same. But treat your employees like dirt, and you can imagine how that message will be passed on to the customer base.

Here are some examples of the research showing the connection between internal and external service:

• The best predictor of customer satisfaction among workplace attributes is what Vanderbilt professor Roland Rust calls service climate: “those attributes of overall workplace climate that characterise how well equipped employees are to deliver customer service, such as the adequacy of resources and equipment and job skills development.”

• For every one percent increase in internal service climate there is a two percent increase in revenue.

• In cardiac care units where nurses’ moods were depressed, patient death rates were four times higher than in comparable units.

• Cornell’s School of Hotel Administration found that employees’ emotional commitment and sense of identity with the company is a key factor in providing excellent service.

• A study of call-centres found that “satisfied call-centre employees make for satisfied and loyal customers… customers decide whether or not to make future purchasing decisions with a company, or to recommend its services to others, as a direct result of their experiences with a call-centre rep… key indicators of call-center representative satisfaction include relationships with co-workers and management, job challenges, and frequency of development or training opportunities… sense of pride with their job and within the overall company.”

Interesting findings. And it all goes to show that a company’s external customer service is only as strong as the company’s internal leadership, and the culture of commitment that this leadership creates. It really is all up to you as leader in retail environments. If you want loyal customers, make sure you have loyal employees.

Thanks again

Sean

Sean McPheat
Managing Director
MTD Management Course

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We all know how important it is to provide great customer service. Happy customers tend to become loyal customers and a loyal customer is likely to stick with you for years on end, regardless of minor price changes.

There are some additional benefits to developing client loyalty, though, and each has a significant impact on your organisation as a whole. Consider the following:

• Your revenue will grow because loyal customers are more likely to purchase additional products from you as the need arises. They’re also more likely to refer prospects that will result in sales.
• The costs associated with operating your business will decrease. This will happen because you won’t have to spend as much time and money on the acquisition of new customers and because providing good customer service to loyal customers is a very efficient process.
• Your employee retention levels will increase because your employees will be happier with their jobs and satisfied with the work they are doing (which, in turn, creates additional customer loyalty and reduced costs).

It’s easy to see why focusing on strong customer service is important to customer loyalty and the overall success of your business. Do you do anything special to encourage your employees to give better customer service – or to encourage your customers to remain loyal?

Thanks again,

Sean

Sean McPheat
Managing Director
MTD Manager Training

Click below for a:
FREE email course “Improve Your Management Skills”