Rahul Shrestha, September 22, 2017
Customer loyalty is a major driver of growth and stability for any company in a competitive market. Researches show that the cost of acquiring new customers is higher than retaining current customer in the long run. Additionally, loyal customers create a domino effect where they help acquire new customers through recommendation and great reviews. Thus, it is important for entrepreneurs to focus on customer retention as much as customer acquisition.
A Harvard University research shows that the major driver of customer loyalty is customer satisfaction, and a major contributor of customer satisfaction is great product and great customer service, which is an integral requirement every business organization strives to deliver. A process to achieve it is through constant effort put in by the employees. Well motivated employees strive to perform their very best and help the company in producing the best results, whereas in a reverse scenario, unmotivated employees might lead to fall in the quality of the product and service which the company has promised to deliver.
There are various factors that keeps an employee motivated. Most of them are strongly motivated by money, others simply seek recognition, and some do it to not get fired. There are numerous ways of motivating a person, but building loyalty is something that exceeds beyond just motivating. Loyalty is intrinsic in nature which cannot be preached but is developed over a period of time. It is an intricate affair of cultivating a long term relationship that is mutual for both parties.
Three important steps towards building loyal employees are:
- Strict selection: Hiring competent employees whose objectives and vision aligns with that of the company is the first step towards building a loyal employee base.
- Incentives: Employers must recognize what the employees expect from the organization and fairly compensate them for their performance.
- Inclusion: Allowing employees to be part of the decision making process empowers them to align themselves with the company’s point of view.
In the words of Steve Jobs: “The total should be more than sum of all parts.” A company should strive to create a synergy between the overall functioning of the company and its employees to achieve efficiency.
Loyal employees remain dedicated to the cause of the business at all times. It can be understood that an active participation from the employees in the overall process of the organization, results in products and services that customers want. Customers are satisfied by those the products and services which give higher value than what they pay for. And value always attract customers.