Nov
12

Solving the Puzzle of Customer Loyalty: A Holistic Explanation

By Mike Gorun at Performance Loyalty Group  //  2013, November  //  No Comments // Tags: , , , ,

Solving the Puzzle of Customer Loyalty: A Holistic ExplanationI’ve written many articles about the different types of loyalty and how each can affect your business’ growth and revenue. However, I’ve never written an overview of how all these components fit together in a holistic manner. Hopefully, this blog article will help put the pieces together so that you better understand these concepts more globally.

Internal Service Quality:

It all begins with your internal service quality. Components of this include:

  • Workplace design – A well-designed dealership will maximize space to create a more efficient environment for employees and customers.
  • Job design – This doesn’t just include job descriptions but practicality. Ensure that the right employees are responsible for things that they have the knowledge and experience to handle effectively. And that all positions complement each other and generate the most efficient work-flow possible.
  • Employee selection and training – By having a hiring process that enables the best selection of employees with the highest chances of success in a given position, you can create a team of people that are effective. Experience and knowledge must be considered along with a candidate’s ability to work well with others. Ongoing training also assists in maximizing employee efficiency and productivity.
  • Recognition – By recognizing employees, you reinforce positive behavior and provide other employees with examples to follow. This also assists employees in better understanding your expectations of them, and it lets them know that they will be recognized for good work.

Paying attention and implementing programs and processes for these areas, can help increase employee satisfaction. Employees that are satisfied with their jobs tend to be more productive. This can then create a need for fewer employees, thus lowering your fixed expenses for staffing, reducing employee turnover and increasing employee retention.

External Service Value:

External service value should include a results-oriented service concept focused on providing an excellent customer experience through efficiency and communication. Customer recognition programs, such as loyalty programs, reinforce to the customer that you value their business.

If employees do their jobs in the most efficient manner possible, while the company rewards that hard work by providing a great work place, a positive environment is created. In this type of environment, employees care about customer service and experience which translates to higher customer satisfaction.

Higher customer satisfaction then leads to an increase in customer loyalty and customers become brand evangelists. Loyal customers are essential to any growth strategy.  They generate revenue from repeat business in service and sales. They also lead to increased retention and generate customer acquisition through referrals. All of this, of course, leads to revenue growth and profitability for the dealer.

My goal has always been to help dealerships see value in each of these areas and assist them in improving through education. Every one of these components is equally important.

I’m sure you’ve heard the saying that you are only as strong as your weakest link. Usually this saying is in reference to a team. What I’ve outlined is no exception other than it is also applicable to your processes. A weak link in process can be just as damaging as a weak link in your team. Take a moment and do an honest assessment of these areas of your dealership. The pieces for the puzzle are all right in front of you. It’s up to you to complete it.

Have you accessed your dealership? What changes did you make?

How does your dealership recognize employees to promote employee retention?

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