“In this economy, customer retention is a great objective. But customer loyalty is even better. Why? Retention programs are often built on a financial transaction. Problem is, your value add to the customer is now about lower prices. Competitors can start to pick away your clientele simply by offering a better deal. Much better is the day when you have loyal customers. These folks have formed an emotional bond with your business that is not going to be broken when the store down the street offers a bigger discount on canned peas.”
The same logic applies to employee retention and loyalty as well. Are you simply trying to retain employees (relying on pay and benefits as your key factors)? Or are you working to foster employee loyalty among those who are “emotionally bonded” to your organization?
Am I just splitting hairs? Why does this matter? Look to a recent article in the Economist citing this research:
“A survey by the Centre for Work-Life Policy, an American consultancy, found that between June 2007 and December 2008 the proportion of employees who professed loyalty to their employers slumped from 95% to 39%; the number voicing trust in them fell from 79% to 22%. A more recent survey by DDI, another American consultancy, found that more than half of respondents described their job as ‘stagnant’, meaning that they had nothing interesting to do and little hope of promotion. Half of these ‘stagnators’ planned to look for another job as soon as the economy improved. People are both clinging on to their current jobs, however much they dislike them, and dreaming of moving when the economy improves. This is taking a toll on both short-term productivity and long-term competitiveness: the people most likely to move when things look up are high-flyers who feel that their talents are being ignored.”
If you’re not working to create loyal employees, then you might as well kiss your best competitive advantage goodbye. How do you help foster loyalty? Give employees a stake in the outcome – ask their opinions, really listen to them, implement what you can. In their daily jobs, take the time to specifically, authentically appreciate what they do that helps make your organization a success.
What are your suggestions for making loyal employees, not just retaining them?