The Ritz-Carlton hotel chain has an exciting customer service policy that empowers every employee with $2,000 to satisfy any guest without approval. This isn’t a one-time power but it’s per incident. Some business owners like the general idea but express concerns about providing employees with this much freedom. They worry that employees will either abuse the empowerment or simply use it as a first course of action rather than effectively assessing each situation to determine whether another course of action could achieve the same goal. It’s certainly disconcerting and scary to give your employees unsupervised access to your wallet.
The ability of an employee to satisfy an upset customer on the spot is essential to diffusing and potentially rescuing a customer relationship. The reason this is so powerful is that most customers don’t expect employees to be so empowered. This is also why most upset customers immediately ask for a manager, rather than explain their problems to the first employee that attempts to assist them.
An article in the Harvard Business Review suggests that businesses empower their employees within boundaries. It further suggests that if the situation calls for a solution outside of those boundaries, the business should then require that its employee involve management. This is preferable to having the employee tell the customer there is nothing more that can be done, and potentially losing the customer’s business. This approach takes into account that, “employees often lack the experience, judgment, and discipline necessary to achieve this without breaking the bank.” But it still allows them the leeway to make some decisions on the spot.
The key to the success of a program of this type is “giving them a framework within which to operate… and feedback about how they are performing within that framework.” This empowers employees to WOW customers while minimizing abuses. At the same time, it ensures that larger issues which cannot be resolved within this framework get escalated to a manager. It also helps ensure that the employee doesn’t brush the customer off without satisfying them.
Customers don’t expect perfection. What they do expect, however, is for a business to make right a mistake. Many times, management fails to hear about issues because employees don’t escalate them. All too often, the first time management hears about an issue from an irate customer is via a bad review on Yelp or similar review site. This situation is avoidable. Whether you choose to give your employees free rein financially a la Ritz-Carlton or choose a more moderated form of empowerment as suggested by the Harvard Business Review, implementing some sort of empowerment on the employee level is a powerful way to retain customers and put out fires before they spread.
Which method works better: giving your employees free rein financially a la Ritz-Carlton or choosing a more moderated form of empowerment as suggested by the Harvard Business Review? Why?
How is your business empowering employees?
In the past, it wasn’t uncommon for employees to spend their whole working lives with a single company. People would start in their late teens and many would retire without ever having worked anywhere else. However, businesses, in general, and dealerships, specifically, are experiencing less loyalty from employees today than ever before in history. Why?
According to Orlando Barone of The Wharton School of Business, Gen Y has been educated and trained to be transactional managers and leaders. “I got the impression they perceived themselves more loyal to their values than to a particular company or organization,” Barone said. “They would be loyal to a place that enabled them to make the kind of impact they would like to make. I did not sense that they would be likely to identify with their organizations as if it were a sort of home or family. And reciprocally, they do not expect that kind of loyalty from their employer.” He goes on to say that employers who allow them to be these types of managers and leaders can earn a great deal of loyalty from them.
The labor laws of today encourage freedom. Freedoms of an employee to work where they want to as well as the freedom of employers to hire whom they want and to let them go when they’re ready to. Gone are the days of commitments that must be upheld by either an employee or an employer. Every day we see major players in key industries either leaving large, respected companies to start their own businesses or join competitors.
Working in the car business is a very taxing career. There are many late hours and not as many days off, especially in sales. Several positions are commission-based, which introduces stress into the equation as well. Combine these factors with a general lack of loyalty and you get a recipe for high turnover.
So how is a dealership supposed to combat this shift in attitude and increase employee loyalty?
The first thing that could be done is to create an environment that is conducive to family-life. Recognizing that for most of your employees, family comes first and respecting and encouraging that puts your dealership in line with their values. Creating an environment in which someone would want to work is also important. Employees want to not only feel appreciated, but also want to feel as if they’re making a difference. Empowering your employees to make decisions when it comes to customer experiences and fixing problems helps them feel as if they play an important role in your dealership. It can actually make a difference and help transform your dealership into one in which they are proud to be a part of.
All of this is easier said than done. People are resistant to change and putting your trust into your employees may be scary as a manager but it shows them that you believe in them and their judgment.
If you want your employees to be loyal to you, you have to be loyal to them.
How do you keep employees loyal at your business?
How can you show employees your loyalty as a manager/owner?
Why do you think that businesses are experiencing less employee loyalty than ever before?
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, Toyota does 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?