Thoughts on Customer and Employee Loyalty

On the way to work recently, I was listening to my favorite morning radio show. The hosts shared some commentary about an Internet story stating that Americans are more loyal to brands (like their favorite soda) than they are to their employer.

Companies did not fare well when it comes to allegiance. Most Americans said they are more committed to their favorite soft drink than the company they work for.

The poll by market research company Ipsos showed that the majority of Americans do not believe that companies are doing a good job rewarding loyal employees or customers.

Only 55 percent of employees said they would stay at their job and turn down higher pay elsewhere, which suggests that 45 percent of workers would leave their job if offered a 10 percent hike in pay.

“Employers have real issues,” Keiningham said. “This should be a wake-up call. The only way to grow your way out of a bad economy is to hold on to your customers and encourage both employee and customer loyalty.”

So. How can companies earn employee and customer loyalty in an era of skepticism and low commitment? Although some companies try to use financial incentive to get loyalty, true loyalty cannot be bought or manufactured. In fact, in some cases financial reward can actually be detrimental, as demonstrated in the following video, The surprising truth about what motivates us.

True loyalty is intrinsic, self-motivated, not externally prompted. Loyalty must develop over time through a relationship of trust and respect.

  1. Tell the Truth – to your employees and to your customers. The worst truth is always better than a great lie.
  2. Be Fair– make the right decision, even when it’s painful.
  3. Be Consistent – provide a repeatable, quality experience for all. Devise systems that support consistency. “You don’t earn loyalty in a day. You earn loyalty day-by-day.” (Jeffrey Gittomer)
  4. Encourage Worthwhile Investment of time, energy, and resources.
  5. Manage Expectations – make them realistic, reasonable, and deliverable.
  6. Recognize and Reward Creatively and Appropriately – even though loyalty cannot be obtained or managed through rewards, they are a great way to say “thank you” after the fact. Here are 25 Ways to Reward Employees (Without Spending a Dime).
  7. Don’t take loyalty for granted – cherish your loyal employees and customers. Loyalty, once earned, is renewable, but not indestructible; you must maintain it.

Additional Reading:
Why Amish Businesses Thrive
How To Wake Dormant Customers

In this economy companies cannot afford high employee turnover rates or high customer attrition (or just plain indifference). Employers should surely merit greater loyalty than their employee’s favorite brand of soda . . . Seriously.

What are your thoughts? How can your current employer earn your loyalty? As a customer, what kind of companies merit your loyalty? Why?

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