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Loyal Customers Thrive Where You Find Loyal Employees

Successful home builders recognize the importance of customer loyalty in generating future sales. Few, however, realize just how significant employee loyalty is in achieving those same goals. In fact, customer loyalty is so dependent on employee loyalty that it’s impossible to improve the former without maintaining the latter.
This challenge is getting tougher, too. According to the biennial employee loyalty study by Walker Information, a U.S.-based consulting firm, disloyal employees in America now outnumber truly loyal ones. Last conducted in 2007, the study shows that the percentage of loyal employees has remained steady at 34 per cent, while the percentage of high-risk employees is at 36 per cent — five percentage points higher than it was in 2005. In short, negative employees now outnumber positive ones south of the border. Some carry-over can be made to Canada as well, but a similar study is needed to confirm this phenomenon.
The impact on organizations is far-reaching — from high turnover rates to low sales figures. According to the Walker survey, loyal employees are twice as likely as disloyal employees to execute company strategies in their daily work. In addition, loyal employees are more focused on helping the company succeed, and they are more willing to help colleagues with heavy workloads — all of which are key attributes for business success. This is especially relevant in the current economic climate, where staff reductions and increased workloads are the norm.

Damage Can Be Extensive
If ignored, high-risk employees have the potential to cause significant damage to a company’s reputation. Just look at the recent case of Dominos Pizza. Employees at one store posted a video on YouTube of a worker putting cheese in his nose before placing it on a sandwich. The video went viral, and the company’s CEO was compelled to post his own video to try to mitigate the harm done to the company’s brand.
Closer to home is the case of a home builder’s disloyal employee who became disgruntled and quit, only to call the builder’s clients to trash talk his former employer in violation of their employment agreement. Even though the builder got a cease and desist order from the courts, the damage was significant.
Recovery from such damage isn’t easy, but it is possible. I recommend a transparent approach whereby employees openly discuss the actions of a rogue employee with those affected. Acknowledging the problem and openly discussing it will help customers assess your true integrity. In the end, most customers will appreciate the honest discussion, and essentially overlook the unfortunate behaviour.
However, it’s best to avoid such problems altogether by having systems in place that make employees feel valued and connected. You can gauge employees’ current level of loyalty by asking a few questions about job satisfaction, productivity and how likely they are to recommend your company as a great place to work.
According to researchers, the top experience-based drivers of loyalty are fairness at work, care and concern, trust in employees, feelings of accomplishment and satisfaction day-to-day. Employee surveys should highlight areas where you can help workers feel like they are respected members of a team and their contributions are valued.
Also, note that employee loyalty tends to increase along with tenure, so it’s especially important to work with new hires. According to the Walker study, employees who have been with a company less than a year are the least loyal, at 26 per cent, while loyalty is the highest, at 45 per cent, among those who have been on the job six to nine years. After a decade on the job, however, loyalty tends to diminish as certain workers start to feel trapped in a position.
In tough economic times, referral business is key to any home builder’s success, and that requires a loyal customer base. It takes a team of loyal employees to create the type of buying experience your customers will want to rave about.

Cardis’s Tips:
Treat your team with the same level of caring that you give your best customers.
Survey employees to assess their attitudes about their job and your company.
Resolve issues with disgruntled employees before they get out of hand.
Make every employee feel like a valued contributor to the company’s goals.
Terminate high-risk, unresponsive employees before they have a chance to harm your company’s reputation.

Paul Cardis is the founder of AVID, Canada's leading provider of customer loyalty management and sales generation services for the home building industry. He can be reached at paul.cardis@avidratings.ca and you can visit AVID on-line at www.avidratings.ca.

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