Can efforts to capture customer loyalty be thwarted by employee loyalty?
Evidence gathered from top retail groups, including auto dealerships, indicates that employee loyalty directly affects customer loyalty and thus business results.
Dealer operators and their managers do their business, their stakeholders and their shareholders disservice when they fail to foster, develop and reward employee engagement. Get this loyalty driver fixed first. Then watch the ROI on customer loyalty improve.
According to customer experience researchers Temkin Group, engaged employees are key to engaged and loyal customers.
“Engaged employees deliver a better customer experience; a better customer experience creates customer loyalty; puts employee engagement; and, customer loyalty leads to more profitable business results,” Bruce Temkin, managing partner, told Direct Marketing News.
Among auto dealership franchises,Toyotadoes the best job at this, according to Temkin’s Experience Ratings report, just released.
Is employee loyalty killing your dealership?
When employees are taken for granted, not given clear direction, rarely cheered on and viewed as utilities, don’t expect them to engage customers in positive ways.
Absenteeism, water cooler huddles and high turnover are signs employee loyalty is in bad shape.
The good news is that developing employee loyalty is not rocket science, but a good dose of the Golden Rule, treating others as one would like to be treated.
Here are some ideas for engaging employees so they can deliver better customer experience:
- Hire the right people. Look for those possessing the required job skills - as well as having the heart and desire to serve others.
- Lead with vision. Employees who can articulate the dealership’s guiding principles and reflect them in their engagement with others have bought into leadership’s vision. Wall plaques cannot adequately convey this vision. Ongoing cheerleading sessions and desk side chats will.
- Equip staff to master and own their jobs. Only when employees know their jobs and are comfortable performing them will their attitude and actions allow them to focus more on others and their needs than their own. Provide training on both hard job skills and soft attitude skills.
- Care for their families. This is a tough business, given the hours, competitiveness and personality types it attracts. Nothing tells employees you care about them like paying attention to their personal life and family. Include families in company events. Send flowers or other forms of condolence when an employee’s family member is ill or otherwise struggling. Can the dealership fund a scholarship program for employees’ children or sponsor a kids’ day program during summer months? Might a letter to a spouse of a hard-working member of the team encourage both employee and spouse?
- Link their loyalty to customer loyalty: Some people get it naturally, that warmth, helpfulness and personal interest in others, that sparks social interaction. Most of us need a few clues. Consider an all-staff event to talk about the link between customer loyalty and employee loyalty. Help them see clearly that their behavior and attitude on the job (as well as off) either bolsters or undermines efforts to build customer loyalty long-term. If you need outside expert help, make the call and the investment.
“Most industries earn their reputations,” Temkin told Direct Marketing News. ”What happens is industries end up cultivating their mediocrity.”
What reputation is employee loyalty cultivating for your dealership and your customers?
How do you “lead with vision” at your dealership?
When did you last share with someone important why you enjoy him or her? We’re fast to convey disappointment or dissatisfaction with others, but uplifting the attributes in them we like feels rather strange.
Yet when it comes to building loyalty, whether in customers, coworkers or family members, nothing will engage their attention – and draw them to us in response – like taking the time to consider and then share positive observations about them.
You may be thinking that an idea like this has no place in the rough and tumble world of auto sales, when in fact, you wouldn’t be further from the truth. Anytime that there is any interpersonal friction, misunderstanding or a feeling of ingratitude, an uplifting and edifying discussion about the values you perceive in someone else will carry the day for a long time to come.
The hardest challenge for most of us is identifying specifically what it is we like about someone else – and then being courageous enough to share these observations with them. You don’t want to spin an attribute that’s not exhibited in someone, but you can identify qualities in him or her worth mentioning. This means though taking time to observe your employees/coworkers and learn their interests.
When you build up others, both you and the recipient should experience a lift while building the working relationship.
If your goal is to build a loyal customer base, there’s no better place to start than by building up your employees’ loyalty and engagement by making sure they know how they are valued. Properly timed sharing of encouraging remarks like “things I like about you” is the most cost-effective means for improving employee morale and loyalty.
Here’s how this might work in the dealership. Chatting with a service advisor in the break room, the service manager says, “You know, Larry, I’ve known you now for what, three years? You know what I like about you? I like that you’re always punctual. I like the way you greet our customers and always have something to say to them that makes them smile. I like it that when you talk about your kids your stories are always upbeat; it’s obvious you love them very much. I’m glad you’re on our team, Larry. Thanks for your commitment and loyalty. It means a lot to me.”
How would such words shared sincerely with you make you feel about your employer, your job and yourself? The fact that someone else took the time to recognize these qualities in another speaks volumes.
Life can beat us down, and no one is immune from life’s trials. We can’t do much about those matters, but we can learn to speak grace into others’ lives. Why not choose today to be a deliverer of grace to those who labor with you.
Share an example where you have improved employee morale and loyalty at your business.
How does your business build a loyal customer base?
When the 83 year-old retired and sold his successful car dealership in Ann Arbor, he decided to say thank you to his staff by giving them $1000 for every year they were employed at his company. To some, this meant receiving a check for up to $46,000 – a sum of money most had never seen all at once.
When asked why he chose to be so generous, Cooper explained that he wanted to make as big of a difference in their lives as they had in his. This illustrates the kind of boss Cooper was. His employees stayed with the company, not because they had any idea they would be rewarded so generously, but because Cooper created the kind of atmosphere where employees wanted to stay.
Creating the same atmosphere can be possible in any organization by focusing on a few key areas.
Be Honest and Fair
As the saying goes “You reap what you sow.” You can’t expect your employees to be truthful with you if you aren’t being truthful with them. Making sure that your employees trust you will help keep them honest as well. Honesty breeds loyalty and your employees will come to recognize you and your organization as having integrity. Also, remember to always treat people with respect if you want to be respected in return. Many leaders wish to instill fear in their employees, but a good and thoughtful leader knows that fear and respect are vastly different.
Build a Communicative Environment
Employees won’t naturally feel that they can approach you with questions or concerns unless you encourage them to do so. These conversations shouldn’t feel awkward or threatening, but should be considered a sign that your employee is committed and invested in the success of the company. Being open to dialogue will only help the entire team find solutions together.
Effective management means building a community of individuals who are all involved in the company’s daily operations as well as creating an environment where people and ideas are truly encouraged and valued.
Genuinely Care, and Show It
The greatest resource your organization has is the people who come to work every day. Don’t view employees as employees, but as people first. Explore different ways in which you can truly connect with them and engage in fruitful dialogue. The more you know about your team members, their hobbies, dreams and goals, the more you’ll know about what they have to offer.
Also, once you see your team as actual people, you’ll be much more open to the idea of offering solutions that can help them do a better job, such as more flexible hours or telecommuting. This will in turn naturally breed loyalty as your employees will view your company as one that truly cares.
Give Employees the Chance to Shine
The more you get your staff involved in all aspects of the business, the more they will be allowed to shine. This will not only feed their need to be valued, but it will allow you to see the potential in certain employees that are ready to advance to the next level. Also, the more input your employees have in aspects of your business, the more invested they will become in the ultimate success of the company.
It’s not necessary to give employees $1000 for every year they’ve been with your company, but in order to create solid bonds and loyalty, you need to create an environment where the entire team can be heard and can feel valued.
Source: Business 2 Community, November 1, 2012. Author, Erin Palmer
What are the best approaches for an employer to gain trust with his/her employees?
Besides money, what are other ways that you can incentivize loyal employees?
How can you/your manager better create a communicative environment in the workplace?
One of my favorite comedians is Bill Engvall, who does the “Here’s Your Sign” gags. According to Wikipedia, “Engvall describes people who ask questions to which the answers should be obvious, and in the process, Engvall shows these people to be stupid. With the tag, “Here’s Your Sign”, Engvall then metaphorically gives these people a sign declaring their stupidity as a warning to others interacting with this person.” (e.g. “A couple of months ago I went fishing with a buddy of mine. As we pulled his boat into the dock, I lifted up this big ‘ol stringer of bass and this idiot on the dock goes, ‘Hey, y’all catch all them fish?’ Nope. Talked ‘em into giving up.”).
Just as Engvall metaphorically awards people’s signs of stupidity, other arenas of life give off similar warning signs that can be just as easily identified if we’re paying attention.
As business managers and/or owners, we all like to think we’ve got a pulse on employee morale, which is a critical component to how successful a business is. As someone who makes a living knowing what makes customers loyal, I know for a fact that if a business’ employees aren’t happy, chances are that business will not have happy customers. Front line employee interactions with customers can make or break those customer experiences. Unhappy customers lead to fewer repeat customers and referrals, which eventually impacts the bottom line.
Yet occasionally, even the best business owners and managers are guilty of becoming overly absorbed with a particular issue, burying their head in the sand in response to a problem or just being too darn busy to pay attention. They may miss those signs that should warn them when dysfunction is stealthily creeping into their corporate culture, ready to apply a long, slow choke-hold that will lead to revenue decline.
So, in case you haven’t been paying attention to your corporate culture lately, here’s your sign!
1) If you haven’t changed with the times, here’s your sign! If the higher-ups at your store continue to do things because that’s the way they’ve always been done, or if they refuse to consider a new technology or marketing program because “we sold plenty of cars twenty years ago without that,” they need to get with the times. Today’s marketplace is very different than it was twenty years ago.
2) If you change with the times every week, here’s your sign! In contrast to never changing with the times, some managers change direction every week based on an article they read, a suggestion from a friend, news that a competitor is doing something or even just on which way the wind blows. Sending employees scrambling in a different direction every week is counter-productive. Set long term goals, set programs and processes in place and stick with them for at least six months to give them a chance.
3) If it takes too long to get stuff approved, here’s your sign! Efficient businesses demand efficient processes. If it takes a committee to get anything approved, or if employees aren’t following the processes in place, it’s a problem and there’s probably a reason. Do your processes need to be reviewed? What’s really slowing down employee productivity?
4) If you’re not rewarding your employees for innovation or hard work, here’s your sign! In general, it’s fair to expect employees to do their job without complaint. But if someone comes up with an innovative idea, or if an employee delivers results that you know must have taken extra hard work, reward them! Nobody wants to work somewhere if they don’t feel appreciated.
5) If you have high turnover, here’s your sign! Now I realize that the retail and automotive industries have higher turnover than most, but why is that? If you have more employees quitting than are leaving because of lay-offs, chances are there’s something wrong with your corporate culture. What is it? Conducting exit surveys is one way to find out, or it may just require a little digging.
Fostering a positive work environment makes for happy employees, which in turn leads to happy-and loyal-customers.
Have you taken a close look at your corporate culture lately?
What do you think are signs of poor employee morale?
What’s the most incredible act of customer service you have ever performed for a customer, and did it inspire their undying loyalty? In this story by Peter Shankman, he recounts how after a long travel day he boarded a plane, tired and hungry. As a joke, he tweeted out to Morton’s steakhouse to please have a Porterhouse waiting for him at the airport when he landed. Of course he was not expecting any response, but guess what? At the airport Morton’s was there, waiting for him with a Porterhouse.
Shoe purveyor Zappos is also well-known for its great customer service. When this blogger’s mother was suffering from health issues and related problems with her feet, she had to return some shoes to Zappos and ended up getting into a long conversation with the customer service agent. The customer service person sent a bouquet of flowers to the mother and gave the mother, daughter and sister VIP memberships. The sister vowed to buy every pair of shoes from Zappos from then on.
And there’s the famous example of Southwest Airlines holding a plane flight for a grandfather who was flying to Denver to see his three-year old grandchild who had been beaten to death by his daughter’s live-in boyfriend, and who was scheduled to be taken off life support that night. When the grandfather arrived at the gate twelve minutes late for his flight he was shocked to find the plane still there. The pilot said, “They can’t go anywhere without me and I wasn’t going anywhere without you.” Cost of delaying flight: who knows and who cares? The knowledge that Southwest did the right thing and the amount of goodwill it created: priceless.
Of course, you don’t have to be a restaurant, retailer or an airline to provide outstanding customer service. Opportunities exist every day in your business.
When was the last time you dealt with an upset customer or noticed that a customer seemed stressed? What did you do? Did you avoid them, get defensive, or did you ask questions so you would understand their concerns, stresses, problems or fears? Then did you go out of your way to provide a service that was above and beyond what was expected?
What is the best customer service experience that you have ever had? Did it inspire your loyalty to that company?
What acts of customer service have you or your co-workers provided that created loyal customers for your dealership?