Employee Loyalty Research
By John Hennessy
According to research by author and entrepreneur Dianne Durkin, spending the time and resources to cultivate employee loyalty can mean a big difference to the long-term health and profitability of any company. An employee that believes in the worth of the company he or she represents will be more likely to communicate that belief down the line to the most important part of the equation: the customer.
In her book The Loyalty Advantage: Essential Steps to Energize Your Company, Your Customers, Your Brand (AMACOM, 2004), Ms. Durkin offers the following.
- Employee loyalty drives customer loyalty, which drives brand loyalty.
- If you haven’t thought about quantifying the effect of loyalty, you’re not alone. But companies on the leading edge of loyalty know that it has a long-term impact on a wide range of factors, including a company’s reputation, productivity, and profitability; customer loyalty and long-term value; brand development; and business growth.
- Christine Wright-Isak, Ph.D., president of Northlight Marketing, Inc., a research firm specializing in business sociology, says, “Loyalty is something that comes over and above compensation. The company culture has to consider some intangibles, for instance, the common human need to feel valued.”
- Why do customers make the choices they do? Customers come to your company because they hope to find a product or service that they need—even if sometimes they don’t know what they need until they find it. That belief – that your company can fulfill these spoken or unspoken needs – is often directly related to the attitudes and beliefs of your employees. A knowledgeable, enthusiastic employee can often turn even a skeptic into a satisfied customer, one who has the potential not only to continue spending money with your company but to refer friends and colleagues who will do the same.
Moderator’s Comment: Which companies have a culture that cultivates employee loyalty and are they outperforming competitors that don’t?
Our office just cancelled service with a large office supply company. The simple reason – a grumpy person answered the phone and was abrupt with our office
manager regarding an order. That office supply company has everything we need, offers convenient delivery and is competitively priced, but we’re no longer a customer.
Fewer and fewer shoppers and companies are willing to give business to firms whose employees make it clear that it would all be better if customers would
just go away. All the loyalty benefits, store improvements and product innovation in the world are wasted if the front treats customers like the enemy.
Have a friend shop anonymously. Call your help desk. Phone in a complaint. Write your company. And do it regularly. Your initiatives might be faltering
due to incidents of poor employee loyalty and not the merits of any program. If that’s the case, put those programs on hold and focus on improving your employee loyalty.
John Hennessy – Moderator