Employee and customer loyalty are one in the same. The gift of customer loyalty begins with employee loyalty. Nurtured and directed employee loyalty will create worlds of energy, inoculating against the apathy and distrust endemic in many organizations. It can also result in synergy, the energy-laden connection that emerges in a group channeling momentum toward the common good. Trust, added to the mix, instills confidence, which helps employee loyalty grow, and customer loyalty flourish.
Employee & Customer Loyalty Case Study: Sam Walton and Wal-Mart
At the time of Sam Walton’s death in 1992, Wal-Mart had annual sales of $44 billion. One out of every five retail items purchased in America came from a Wal-Mart store. His personal fortune exceeded $23 billion. Sam once said: “There is only one boss: the customer. And he can fire everybody, from the chairman on down, simply by spending his money somewhere else.” When asked how Wal-Mart was able to grow so fast, Sam replied, “The answer is always the same-people. Not only the right kind, but interested, dedicated, enthusiastic, and loyal people. That makes our company exceptional.”
Employee & Customer Loyalty Case Study: Herb Kelleher and Southwest Airlines
Southwest Airlines devotes a considerable budget to celebrating its employees with parties, banquets, gifts, birthday cards and outings. Accountants have told Herb Kelleher how much money he could save if he didn’t budget for these activities. His reply: “Southwest Airlines has the fewest customer complaints in the industry. How much is that worth?”
Kelleher believes that the front office is there to support the employees. He said: “Southwest has its customers, the passengers; and I have my customers, the airline’s employees. If the passengers aren’t satisfied, they won’t fly with us. If the employees aren’t satisfied, they won’t provide the product we need.” Southwest employees make flying a fun experience. They try to surprise and delight the customers.
Employee & Customer Loyalty Case Study: Nordstrom Rules
Nordstrom leaders also inspire employees with actions and directions that are surprising. For example, the Nordstrom Handbook says: “Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them.” And Rule 1 simply reads: “Use your good judgment in all situations. There will be no additional rules. Please feel free to ask your department manager, store manager, or division manager any question at any time.”
The founders of Nordstrom maintain what they call a “worshipful relationship” with the customer, resulting in delighted customers, enthusiastic salespeople, and high profits. They actively practice “doing virtually anything possible to please the customer.” The founders also do virtually anything possible to please their employees.
Employee & Customer Loyalty Case Study: Ritz Carlton: Discovering what customers savor
A few months ago, I was involved in a seminar in Pasadena at the Ritz-Carlton Hotel. During lunch I asked my waiter for a burger and a chocolate shake. When he let me know that they didn’t offer milkshakes, I setfled for a glass of water. I was surprised when a chocolate shake arrived with my hamburger. Manuel Avila, my waiter, on his own initiative, found chocolate ice cream and cold milk in the kitchen and created a shake. Manuel felt free to exercise initiative on my behalf because of the positive creative examples set by his leaders.
When Employees are Cared for, They Care for Customers
The way employees treat customers reflects directly on the way they are personally treated. Many employees are truly loyal. The question is; how do we retain and increase our loyal employees, thereby increasing our customer loyalty base?
The way employees treat customers reflects directly on the way they are personally treated. How can you emulate these four cases to improve loyalty in your organization?