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Customer Loyalty

“Companies are not successful by accident. There is a cause and effect relationship between businesses practices, employee satisfaction, customer loyalty, and profitability.”  This bit of wisdom is from Tom Olivo of Success Profiles who has spent the last few years studying business success.

In fact, many recent business studies have proven that loyal customers mean higher profits. To that end, many companies put their focus on “Wowing” or delighting their customers with extraordinary products or extraordinary levels of service.

Like the initial quality movement, we are now finding that a company can literally bankrupt itself with too much Wow. Remember the stations that offered full-service at self-serve prices. It didn’t take too long to notice how much the extra people and supplies were costing! Of the 14 companies in Tom Peters book, In Search of Excellence, the majority are now out of business.

Many in the industry also learned that each time they create Wow, once all the competitors made the same offer, the Wow loses all its punch and becomes simply expected. Remember when pay-at-the-pump was a Wow novelty when it first came out and you might even be able to get an extra penny or two for the convenience? Now that a majority of c-stores have this technology, it’s become expected, not a reason for delight and certainly not something you customers will pay extra to receive.

So what is the permanent solution to rock-solid customer loyalty. Interestingly enough, what the latest studies find is that customer loyalty is driven by employee loyalty. Companies with high employee turnover have high customer turnover. Employees with low employee turnover tend to have low customer turnover. With these proven business statistics in hand, many companies are now turning their attention to employee satisfaction.

So what makes a satisfied employee? If your first answer is pay, you would be incorrect. Research shows that what people look for most in a job is respect and the ability to know their work is meaningful – that they make a difference and count to the organization.

One of the tools we use at Meridian is an employee survey to determine that pinpoints employee attitudes. The survey serves as a barometer of satisfaction levels. We have found the scores on the survey questions to have a high correlation to turnover rates (the higher the satisfaction levels the lower the company turnover percentage.)

With our survey format, we isolate satisfaction levels according to division (or profit center) as well as time with the company. Ideally, your long-time workers should be the happiest. If new employees are happy and old employees are disgruntled, it can mean your company is changing and the old salts don’t like the changes, or that more senior employees have a better grip on day-to-day reality and are not happy.

So how do you promote employee loyalty? Actually, it’s not to far away from the golden rule— treat them the way you would want to be treated if you were in their shoes. Here’s how companies with low turnover achieve their success.

1) Provide a safe, pleasant working environment.

  • Those with night shifts in potentially dangerous neighborhood locations provide escorts to employee vehicles at the beginning and end of each shift.
  • Offer pleasingly decorated spaces where employees can get away from customers for a quiet moment. (Even a little round table with a tablecloth stuck in the inventory room is better than nothing.)
  • Put soft mats on cashier areas with hard floors.
  • Have adequate lighting.
  • Provide extra large desks with plenty of drawers and organizers.
  • Adequately heat and cool working spaces.

2) Educate employees about how their job relates to the big picture of the total business. Teach employees how their performance really makes a difference.

3) Offer flexible work hours and comp time. Time with family is exceedingly important to today’s busy parents.

  • Flex time where employees can set their own hours within given parameters.
  • Personal time off – used in lieu of the typical sick day, employees can earn PTO hours based upon hours worked. For instance, one hour of PTO for every 60 hours worked.
  • Comp time – allowing time off for personal needs and family to be “made up” either before or after the event. Note: watch that you don’t unknowingly violate wage and hour laws.

4) Offer social activities – successful events include:

  • Cooking contests and potluck meals – breakfast, chili, salsa, etc.
  • Holiday theme parties – Halloween shouldn’t be the only time adults can dress up and have fun. Any holiday can turn into an event.
  • Family Picnic and Game Day – organized games for both kids and adults with lots of good food and fellowship. Team games are a great way to get unfamiliar folks to work together.
  • Group Tickets – free or discount tickets to sporting events, concerts, plays, etc.

5) Reward and praise outstanding individual and team performance.

  • Create meaningful company profit and cash goals.
  • Make it tangible – Use visual graphics to help reinforce the goal daily. A building company used a bulletin board for employees to show how their bonus would be spent. Employees were asked to bring in a picture. On the board were houses, boats, cars, trips to Hawaii, etc. The best, however, was the guy who brought in his actual credit card and stuck it to the board proving he was going to pay down his debt!

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