Loyalty Through Leadership
By John Hennessy, Vice President, Concept Shopping, Inc.
(www.conceptshopping.com)
Writing on the Fast Company blog, Chuck Salter relates an airline situation with a twist.
Instead of swearing off an airline due to his experiencing several mechanical delays, information and personal interaction between captain and passengers led Mr. Salter to praise
the captain and minimize the inconvenience of the delays.
As Mr. Salter relates, “Our captain was a natural, though. He not only nipped a potential passenger riot in the bud, he also won over a tough crowd with his candor and charm.
As unlucky as we felt to be on a thrice-delayed flight, we felt fortunate to have flown with him. (Yes, we eventually made it home that night.)"
Moderator’s Comment: Are your leaders customer-engaging, loyalty-building assets?
The story Chuck relates is a great example of how important a leader’s practices and personality are to the customer experience. In this example, an experience
that could have deterred travelers from choosing this airline actually elevated their perception of the airline due to the direct communication and strong leadership of the pilot.
How the leader handles customers determines how all personnel relate to customers. If their leader engages customers directly in both good situations and,
more importantly, in bad, other employees are more likely to step up.
There’s an additional loyalty consideration in how this pilot responded versus how most leaders respond when faced with an unpleasant situation. If you
are afraid to interact with your customers and hide rather than help them when they have a problem, how can you expect any loyalty?
Want to improve your business and increase shopper loyalty? Hire and reward leaders who are customer advocates. –
John Hennessy – Moderator
There are two key drivers of customer satisfaction and loyalty described in the story Chuck relates. The first is Corporate Reputation/Reputation Management, which encompasses leadership in the industry, strong corporate citizenship, financial soundness, and effective senior leadership. Although a pilot might not be considered a “senior leader” of the airlines, he is certainly the senior leader of their airplane he is flying.
Customers learn much more about an organization and their senior leadership when things go wrong than when things go right. Whether we are talking about the senior leaders in ethically plagued companies or the exceptional senior leaders at the helm of McNeil during the Tylenol tragedy, customers, employees, suppliers, government officials and the media size up a company based on the way they handle adverse situations during the tough times.
The second key driver of customer satisfaction and loyalty is Effective Customer Service, which encompasses being easy to do business with and caring about the customer. If the day to day employees who are responsible for 90% of customer contact don’t feel their senior leaders would care about a particular customer problem, their own level of customer service and support will diminish, leading to customer dissatisfaction, decreased retention and purchase intent, and a worsening of the financial health of an organization.
Customers understand that “stuff happens,” however, it is how a company handles a problem that will make the difference in whether the customer gives that company another chance.
I believe leaders are born, not developed through leadership courses or by reading great business books on the subject. Sure, a great leadership approach to business can be fine-tuned, but in general, people either have it or they don’t. So, what this points to is the importance of hiring to fit your organization’s goals. And, you can’t always tell who is a leader from personality profiles, resumes, or testing. When you add gut feel established by spending time with people, to all the testing that’s done today, you can improve the end result.
Kai Clarke put this in the clearest perspective for me, so I hope he won’t mind my hitchhiking on his comments a bit. As others have noted, leaders are found throughout organizations, not just at the top. And, they function best when given room to lead. Managers who aren’t leaders need to recognize the leaders among their subordinates and encourage them in whatever ways they can. One supermarket chain I worked at did this by authorizing all store employees to handle customer complaints up to and including replacing items or refunding purchase amounts. Some of them backed away from this responsibility – continuing to refer customers to the manager – while others embraced it by going out of their way to solve customer problems.
We called this practice “Managing Moments Of Truth.” Moments Of Truth occurred when concerned customers required an acknowledgement of the problem, an apology, and an acceptable solution. This was our “Triple A Response” (acknowledgement, apology, and acceptable solution). Reminds me of Chuck Salter’s airline captain story. Anyone can look like an effective leader when everything is going right. True leadership, however, emerges when things are going wrong.
This is a great point, i.e., the importance of the human touch in loyalty that some retailers like Dorothy Lane have put to great advantage. But, for the most part, it has taken a back seat to more explicit value appeal such as points or miles. We know that the explicit value appeal can influence behavior in the short term, but it’s less clear that it creates loyalty in any real emotional sense. Those retailers who can use their people to create positive, memorable experiences or to neutralize a major negative like the Captain did, will get a superior ROI from their investment in loyalty.
Sometimes great businesspeople develop themselves into charismatic leaders. That can set an upbeat, enthusiastic tone. The leaders can visit their stores often, raising morale wherever they go. Most businesspeople aren’t born to be natural charismatic leaders, but some of the right behavior can be coached and smart businesspeople who are self-aware can hire managers and executives who are more charismatic already and/or who can be coached. Any airline already knows 99% of possible disappointing scenarios and can rehearse its staff on the best way to make lemons into lemonade. Of course, if the top management doesn’t care or has so little ability to put itself into its customer’s shoes, the rehearsals won’t happen. Self-aware people care about the impression they make on others and work to refine those impressions appropriately.
Customer advocates and communication should be a key requirement for all managers and the companies they lead. Instead, we often tend to accept managers, rather than leaders in our organization. We frequently forget that our customers are both internal and external, and that their perspectives, happiness and repeat business all contribute to the success of our business. The great managers recognize this and account for this as a standard part of their perspectives. We call these people leaders. They demand and get respect because they listen before they speak, think of others first, and place a priority on communicating the truth. Great leaders have great organizations which reflect the same values and perspectives while communicating this both internally and externally to their customers. This is clear from their PR and their position on doing the right thing for their customers, rather than just doing something.
Talent is light years from potential. When we hire the right talent and place it in the right place at the right time the possibilities are quite endless. Strengths management, via the Gallup organization, has done wonders for me personally as a manager and for my organization. Add in the power of perpetual positive thinking/attitudes and I’m unstoppable. I always tell my associates that they are to think of sales and service much like they would a house party. From the moment you open the door you treat your guests with the utmost respect and see that their needs are met to ensure a great time is had by all (you, the host, and your guests – b/c if work isn’t “fun” it becomes a thing to be avoided). If someone were to hurt themselves while at your party, you would make sure they were comfortable and knew without a doubt you cared about their well-being (as opposed to taking down data and filling out forms – or worse, calling a 3rd party to handle the “issue”). If someone were trying to take something from your home, you would remain courteous to the individual and be discrete so as not to call attention from the other guests or jeopardize the awesome party going on (as opposed to assuming an unnatural tone/dialogue and using tactics all in attendance are sure to see through). The bottom line is you make sure everyone is having a good time. You get everyone’s name and instinctively offer yours. You are proud of the party you’re throwing and want everyone to know just who’s house (store – specific store if in multiple location markets) they currently find all the fun going on all around them! Play hard. Play smart. Play together. Being patient, productive, and positive is key to the every day. At least that’s the way I’ve come to survive as one heck of successful Retail Store Manager with a team that knows nothing of the frightful term – turnover!