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Customer And Employee Loyalty:
How Do You Rate?

by Anne Rose, of Canadian Management Centre's Customer Service Training Seminars
Posted in January, 2008.

Developing Customer Loyalty

The average company loses half their customers in 5 years and half their employees in 4 years. This has significant impact to overall customer, employee, investor and supplier loyalty. Loyalty is the degree to which these groups are loyal to your product, service and organization.

In today's market, being customer-focused is a key to survival and longevity. High levels of loyalty have positive impact on customer satisfaction, profitability, and reputation. Happy employees work harder, produce more and stay with an employer longer. Investors and suppliers feel increased confidence in the organization and their actions reflect that.

So how do you know if your organization is lacking in loyalty or strong in it? Here are just a few key steps in gauging and improving loyalty:

1. Evaluate your current levels of loyalty.
Information can be gathered from customers, employees, suppliers, partners and investors. Ask questions such as: How satisfied are you with the services we provide you? How well are problems handled? How can we better serve you?

Ask your employees how satisfied they are in their jobs and how well they are communicated with by management. These all affect loyalty. Find areas to improve on and then act on them!

2. Create clear mission, vision and value statements and goals.
These provide the map to guide daily behavior and strengthen long-term performance. Designing and utilizing them invites people to adjust the activities, projects and tasks to support and shift the organization closer to the set goals. Clearly define them and communicate them to all levels of employees and management.

3. Invest in your employees.
An attitude of indifference to your customers causes an average of 68% of customers to stop doing business with you. This attitude of indifference is displayed and communicated by employees both within your organization to other employees and to customers. A commitment to communication, on-going learning, culture development and the rewarding of performance all help in creating a positive attitude and work environment.

4. Create a customer-focused organization.
Gauge how customer-focused or internally-focused your processes are. Does your personal telephone answering stop at 5 p.m., yet your customers tend to call after that time? You can utilize simple mapping techniques, which can allow you to display these processes and quickly identify areas for improvement - both in efficiencies within your company and its employees as well as with the goal of creating more customer-focused, customer-friendly, processes.

5. Identify the target customer group that will purchase your services.
These are the customers that tend to clearly see the value in what you offer, have the funds to pay for it and who are looking for long-term customer-supplier relationships. Are you currently selling to your target audience? Should you be targeting other groups instead, or in addition? The closer you are to your defined 'best customer group; profile, the higher the degree of loyalty and overall profitability you will experience.

The bottom line is that all of the major types of loyalty have significant impact. Retention of current customers, employees, suppliers and investors are important to the success of your business. Take the time to re-evaluate your success with each group and watch as your performance, profitability and potential increase!

Anne Rose wrote this article from her position with the Canadian Management Centre's Customer Service Training seminars. These provide skills and techniques designed to improve customer satisfaction.

If you have questions, comments, or new information to provide on this topic, let him know and we can add it in as an addendum to this article.

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