In today’s commoditized world, loyalty is more important than ever. If you can’t compete on price, you have to focus on things that keep customers coming back. That means a good product, good service, and an experience that customers will remember. You’re only as good as the following you build.
Experts have been arguing about how to cultivate customer and brand loyalty for years. Consultant and loyalty expert Diane Durkin, who runs Loyalty Factor, LLC, has an original take on the issue. She says loyal employees build loyal customers, which in turn cultivates a solid brand following. Loyalty, in other words, starts from the inside.
We interviewed Diane to learn more about how loyalty radiates outwards from employees to brands. Here’s what she had to say.
BP: How do you differentiate customer loyalty and brand loyalty?
Customer loyalty is people recommending you to others because of good quality and service – a value added perspective. It is people wanting to use your products because of your value on going green and philanthropic philosophies.
Customer loyalty is continuously buying from your organization and recommending it to others.
Brand loyalty is having the name recognition and being recognized as a Best Run, Best Managed Company, Industry Leader, and a high integrity company.
BP: Can you tell me a little bit about how employee loyalty affects customer and brand loyalty?
When employees feel they are appreciated, learning and growing they have a sense of dedication and commitment to servicing the customer in a positive and helpful manner. They basically treat the customer the way they are being treated – with appreciation and wanting to meet with customers’ needs. Loyal employees take a lot of pride and commitment in exceeding customer expectations and helping the company grow and prosper.
BP: Some companies–Wal-Mart or McDonald’s comes to mind–have a reputation of high turnover and unenthusiastic employees, but still have brand loyalty. How do you explain companies like that?
Wal-Mart and McDonald’s do not have as many unenthusiastic employees as you may think. McDonald’s in particular has done a good job of transforming attitudes of their employees. With these two retailers, price, value and convenience are key ingredients. It’s hard to justify paying 10–20% more at another retailer for the same product.
BP: What’s the worst-case scenario for a company whose employees aren’t loyal?
There is a direct correlation between lack of employee loyalty and company performance. Companies highlighted as “Best Places to Work” also show growth and profitability.
BP: Can you give me 2-3 ways that a company can increase employee loyalty?
In order to increase employee loyalty, set a clearly defined purpose, vision and set of values that is understood by everyone.
Purpose: What we are here to achieve. How do we make a difference?
Vision: Where do we see ourselves in the future?
Values: Ethics and morals by which this company will operate.
Offer Culture & Communications Training to help employees understand the behaviors that will ensure their personal success within the organization.
Recognize effort and reward performance with small rewards and frequent words of appreciation. Utilize the two most underutilized words in the English language, “Thank You,” or “Great Job.” Distribute small tokens of appreciation like candy bars or $5 gift cards to Dunkin Donuts, McDonald’s or Wal-Mart. These small rewards have great mileage and help create employee engagement.
Dianne M. Durkin is the President and Founder of The Loyalty Factor, LLC, a training and consulting firm that specializes in change management, employee loyalty, and customer loyalty programs.