Feature Article - January/February 2016

Loyalty Inside & Out

The Keys to Building—And Keeping—Customer Loyalty

By Joe Bush

Corporate public relations is everywhere: in-store, online and on multimedia advertising. Consumers are most familiar with retailers' efforts.

Target has wall signs with letters from community organizations and pictures of employees volunteering and reminders that a portion of profits go to local schools. Kohl's includes a message on its POS units reminding customers of its green buildings. Most recently a score of retailers have taken a stand against Black Friday and being open on Thanksgiving, while Macy's just announced it would not decorate for Christmas until Nov. 27.

Such moves show that big business has a heart, is thankful for the patronage from the nearby population, has the pulse of popular trends, and sometimes executes tactics that reflect the personal beliefs of ownership, like Chick-fil-A. The focus on image can also have the happy result of making shoppers feel good about returning to the stores time and again. In other words, it can inspire loyalty.

Most consumers are familiar with retailer membership programs driving repeat business: building points with purchases toward rewards, which are usually discounts on future purchases. Is that the only factor that keeps them coming back? Rewards are a draw, sure, but probably not effective if, for instance, customer service is poor, or inventory is frequently out of stock.

Membership programs are just one piece of the puzzle, and another is how the public feels about a company's ethics and practices. If you don't think consumers care, recall public outrage over Walmart's employee compensation policies, or the attention paid to which retailers use the word Christmas in advertising and subsequent call for boycotts by conservative groups.

With the rise of social media and Internet adding to the already ubiquitous traditional media, the public not only knows more, it can activate and spread opinion more easily than ever.

An increasing trend we are seeing in the news is customer loyalty, and conversely disloyalty, based on how a company treats their employees.

Jayme Muenz, HR manager of program management in the HR operations team at global information services firm Experian Services Corporation, said that because consumers are now reacting to such things, it's more important than ever to encourage loyalty within an organization with the best possible treatment of workers.

"An increasing trend we are seeing in the news is customer loyalty, and conversely disloyalty, based on how a company treats their employees," Muenz said. "What benefits they do or do not provide, what perceived sacrifices the company is making to provide a better experience for their employees—these are things that consumers are now paying attention to, because they themselves are employees, and they want to show loyalty to companies that demonstrate value in their employees."

So what are some best practices for developing a bond between employees and their company? Muenz said the first step is defining loyalty. Her expertise is the employee-organization relationship, and for her, employee loyalty is "tenure from engaged, contributory professionals."

"There are many reasons why people are engaged within their roles and responsibilities, and many areas of satisfaction that an organization can identify as contributing to that satisfaction," she said. "I think that it is a reasonable conclusion to say that an employee who is loyal to and committed to their organization brings energy to their job that is visible to their customers, and that customers want to partner with organizations with that kind of energy driving them."

Muenz said there are no secrets to the tools that employers can use to boost loyalty within their offices. Employees want to know that they, their ideas and their contributions matter to the organization, she said, and that their time is valued.

"While monetary recognition is one of the ways a business shows how it values employees, non-monetary recognition is highly important to employees across the generational spectrum," she said. "In many organizations, you see electronic 'thank you' card programs, spot recognition tools, and dedicated time in team meetings for verbal recognition from management and peers. These are, for many people, huge motivators as they foster a sense of community and teamwork as well as the recognition for a job well done."