what goes around, comes around
This saying is widely known: it urges us to treat others in a similar fashion as one would like to be treated oneself. And, as in most cases concerning proverbs and other hints for good behaviour, nobody is really sticking to them.
But there is no smoke without fire…
Same in the modern economy. A shortsighted view on quarter results often is chosen over behaviour which leads to return on the long run. Here everybody is his own best friend: who cares what might comes around if the boss is coming around with a fat bonus?
Customers are replying in a similar fashion: they increasingly are only interested in short term gains, become inpatient, change their buying behaviour like a chameleon its skin colour, ventilate their annoyance in online forums or start yelling at the help desk employees. The tone of voice is getting rough out there!
Customer loyalty measurements show a negative trend, a downwards spiral, increasing over the years. Where in the past one could count on a loyal customer base and employees openly came out for the companies they were employed by, today it’s plain un-cool to show of that you’re from Siemens or likewise. OK, there are the known exceptions, like apple and various sports brands, but between us: who has a sticker of his employer stuck on his car bumper? Yeah, all those reps racing around in lease cars, because they have to! (Oh yes, and those apple freaks.)
And here is the clue, which some brands understand really well: if you treat your customers like you treat yourself, a loyalty can develop which increases turnover and profit.
Forward-looking marketing strategies build on customer loyalty and can prove the correlation between loyalty and profitability. Methods like ‘net promoter score’ by Fred Reichhelt and the ‘conversion model’ by Hofmeyr are introduced in many corporations in order to re-focus, away from the backwards oriented quarter results, towards forward-looking loyalty targets. It turns out that those companies, which are building on customer loyalty, are the most profitable in the market place. To me, that’s a proof of plain common sense.
Actually you don’t have to look at your customer’s loyalty to find out if you might have a profitable future and the chance to outgrow your competitors: just ask your employees! Also here goes around what comes around. If a company is able to mobilize the loyalty of its employees, it will be noticed from the outside. These days customers aren’t after the newest features or benefits of a product only, they also take into consideration the overall experience they have with the brand rendering the experience. What does this mean? Just ask any restaurant owner: if the total experiences that surround a meal are not in sync, the risk is high that the guest will leave. The schnitzel can be great, but if the waiter pretends to be French and is serving in a fitting snobby manner, it will all backfire – and the guests won’t come back, or even worse, they will spread negative advertisement.
So, prior to measuring your customer’s loyalty, have a look at your employee‘s: do you have motivated and loyal staff? Can they deliver an experience in line with the quality of your product? Or have they already mentally resigned, like with so many companies these days?
If you start to polish up your processes, gear up innovation or renew your CI, do not forget that customers do experience your company as a whole and that your employees are pivotable in rendering the experience. Being it the waiter, the cook or the doorman – they all are part of the final customer’s experience and judgement, and not only the quality of the meal.
This counts for all industries: the more employees are identifying with their company, are supporting it and are motivated and loyal, the more motivated and supportive the reaction of customers will be. They will reward this with their loyalty and increased consumption, which will ensure your profitability.
If this is what your after, start with your employees and stakeholders: because, what goes around, comes around!