For years companies have invested in customer loyalty through programs, incentives, customer service operations and more. Meanwhile, not nearly as much attention has been placed on a segment that has proven, direct correlations to customer retention: employee engagement and loyalty. In business you need people you can depend on to ‘have your back’, to commit to your business vision and make the journey to success with you. Your employees are your income protection. It doesn’t matter if you’re in a service or product/merchandise business, it’s important to have loyal employees that stand with you. Finding them may just turn out to be the easy part. Keeping them, on the other hand, is a totally different story and explains the importance of building employee loyalty. This article will refer to financial services businesses in particular due to the author’s affinity to this profession, however the key points are equally transferrable across other businesses within (and without of) the financial services profession.
Your ‘Front’- In any type of business, the boss is rarely the one to greet a customer at the door. It will, more than likely, be an employee. A loyal employee will extend the same welcome to a client as you yourself would, because he/she understands the importance of keeping the client happy and the consequences if you don’t. How do you achieve this? The answer is quite simple: You lead by example. There are a number of great promoters of the service experience. Ron Kaufman is one who has a passion for service that is as strong as any the author has seen. Engaging your team in a process of identifying client contact points, and challenging them to contribute ideas for improving the service experience will reap benefits on several levels. It will increase their engagement, get their ‘buy-in’ to the concept and demonstrate that their ideas and input are valued. You have just created a win/win situation. The engaged and loyal employee will provide a far superior client experience both upfront and ongoing to that of a disengaged individual with lower loyalty.
Your ‘Engine Room’- No matter who the boss is, there will always be workers. In the case of the financial services business, the author often refers to these people as the ‘engine room’. While you are busy acquiring or reviewing clients, they are the ones taking care of production (it doesn’t matter if it’s chasing down outstanding information for an application or corresponding to set coming meetings) so you can have maximum time available for revenue producing work. Why is it important to have loyal employees for this? Because, you can rely on them to get the job done effectively and efficiently without major fallout. Furthermore, they love their job and they are well trained and know what they’re doing. If you have to keep training new people because you haven’t built loyalty with the veteran employees, you will only be hurting yourself. Not only is it time consuming, it’s expensive. A study by Columbia University suggests that replacing a lost employee can cost up to 150% of that person’s annual salary. Not only do beginners work slower, because they’re unfamiliar with the business’ systems and processes, there is a higher likelihood they will make more mistakes, requiring more time to be spent double checking work. This leads to inefficient operations, ergo less time to spend with clients on revenue producing activities. You can motivate your team by clearly articulating the business vision, getting their ‘buy-in’, setting goals and rewarding them for reaching them. It doesn’t have to be a huge thing, or even monetary; it’s about recognition and demonstrating that you are aware of the effort put forward by each of your employees. Regularly updating them as to how things are tracking is crucial. Have a function once a year to celebrate their accomplishments and the success of the business. This need not be an expensive exercise.
Your ‘Dependents’- You are responsible for your employees. Let them know that you understand this responsibility and that you have their best interest at heart. If you show your employees that you genuinely care about their welfare, there is nothing (within reason) they won’t do for you and your business. It’s your job to make sure there is plenty of work for them and it’s their job to make sure it gets done. Just as a well-oiled machine runs smoothly, an appreciated team works optimally. Above all, don’t forget to stop and say hello, ask how he/she is, pat a shoulder now and then. Even when you get to the point where you have managers, don’t forget you are the boss, their team leader, and they want to know you still see them. The magic to loyalty is to be a true leader.
All in all, building loyalty is about being aware of what is going on in the business, and with your subordinates and subsequently acting upon it. Studies demonstrate that companies who make an effort to achieve committed and loyal employees will achieve significant increases in the earnings per employee (Bashaw & Grant, 1994; Konovsky & Cropanzano, 1991; Mayer & Schoorman, 1992; Moorman et al., 1993). A little creativity and a lot of common sense will get you to the point of optimizing your workforce and letting you build a solid foundation for a prospering business.
Blog by Simon Backman 