Leadership and customer loyalty

Sep 23 2013 by Duane Dike Print This Article

Almost everyone in service and goods organizations (bosses, workers and partners) ultimately answers to an influential and powerful group of beings called customers. Loyal customers are worth their weight in repeat visits and goodwill (profits). If you think about it, customers are not all that difficult to please. They respond well to attentive service and solid products. Your most loyal customers will click the like-button in response to innovative ideas and products that make them happy.

As we all know, negative customer experiences can quickly start to harm the public perception of your product or brand. Yet it really doesn't take much effort to change customer experience from good to great! Likewise, customer loyalty isn't all that difficult to pull off, either.

The behavior of front line employees is the reputation of an organization. It doesn't really matter what ideological plans are cooked up by CEOs, the behavior of front line employees is the most important factor in shaping the perception of organizational culture among the public. A disgruntled (or off-kilter) front-line employee can destroy organizational reputation, especially given the speed that news travels on the internet and social media.

Just to be fair, the entire weight of perception-setting doesn't necessarily sit on the shoulders of front line employees. All sorts of other factors are part of the equation; intended brand identity (think Apple, Coca-Cola, Disney, Google), community involvement (employee volunteer programs), consistently positive messages (protecting the brand), and corporate relationships with the media.

When all these factors are positive, customers will remain loyal because of connective identity. When one of those factors falters, the delicate balance between good and bad perceptions starts to shift. And, dare I say, just one bad employee can single-handedly destroy customer loyalty, especially in service-oriented environments such as a restaurant or hotel.

Leadership and Customer Loyalty

So how does leadership fit in to this conversation? The answer: secure and confident managers (secure in knowledge, relationships, and with organizational purpose) are, simply put, good for business because of the effect of their behavior on employee morale. Secure and confident managers are emotionally intelligent with the propensity to sense employee strengths, aptitude, and moods. When employee morale is high, front-line workers are more likely to protect organizational brand and serve customers well.

In effect, good leaders are functionally productive because they know the importance of hiring the right people for the job and how to equip them with the skills necessary to interact with customers. On the other hand, dysfunctional leader behavior correlates to poor customer relations and ultimately, increased employee turnover.

High employee turnover means that the training process never ends. It takes time for new front line employees to be comfortable on the job. Those assimilation months are risky as new employees dance around the ins and outs of the customer satisfaction equation.

Employee Morale and Customer Loyalty

It's important to understand that almost imperceptible changes in supervisor behavioural can have an impact on employee morale and so on the employee-customer loyalty equation. Employer behavior that is supportive results in a balance of emotions, values, intelligence, and collaboration between employees and organizational leaders. Conversely, when personal employee values are out of balance with corporate values, employee turnover increases and the endless cycle of training and re-training is perpetuated.

An interesting study published in 2008 concludes that employee fatigue is often the result of lack of supervisor support. Faulty support is an endless downward spiral because fatigued employees are negatively sensitive to leader inconsistent behavior. When employees feel refreshed on the job, customers tend to score the organization higher on satisfaction and loyalty surveys.

In essence, these refreshed customer focused employees know their position on the team and the organizational rules of behavior. Good managers communicate those rules in action and words, thereby creating supportive, collaborative, and friendly cultures. Healthy organizational structures and well-defined cultures are motivational when the good elements of the culture are practiced at the local store level by front-line supervisors.

Front Line Workers

We also need to remember that it is our lowest paid employees who are often those who directly interact with customers. So these lower-paid employees are actually the most important factors in our organizational identity and customer loyalty. Leading them are front line supervisors, often the lowest paid of organizational leaders. An interesting conundrum.

A CEO has little or no contact with front-line employees. Because of that distance, intended organizational culture and leader philosophies can dissipate by the time they reach the outer limits of organizational markets. Good senior managers minimize this dissipation by focusing all positive leadership effort on mid-level and lower-level managers. Encouraging these sub-managers to behave according to corporate ideals ensures they are effective communicators of organizational culture and philosophy.

Front-line supervisors who accurately communicate service-minded philosophies through their behavior stimulate service-oriented climates. If intended culture is communicated and sustained, front line employees assimilate into the philosophy and become an organization's competitive advantage. The risks of not assimilating new employees in an organization's culture include employee alienation, insecurity, inequity and poor customer service.

The-All Important Culture Perception

Friendly, supportive, and collaborative organizational cultures correlate to employee physical and emotional well-being, better work performance, stronger social relationships, better job effort, and higher levels of commitment, satisfaction, and morale.

We're social beasts, and crave acceptance in the pack. Kind of a prehistoric way of looking at things, but it's true, once we realize the power of innate needs of community and relationships among all levels of the organization, loyalty among those all-important customers will soar.

"Customer satisfaction is worthless. Customer loyalty is priceless" Ė Jeffrey Gitomer, author, speaker.

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About The Author

Duane Dike
Duane Dike

Duane Dike is the manager of creative production for a large entertainment company in Southern California. He has a doctorate in management and organizational leadership and an MBA in management. He is a popular guest speaker for education and management groups on subjects related to innovation, leadership and thinking.