From Satisfied to Loyal Customers in 5 Steps

It used to be that product and service quality were considered the main contributors to competitive advantage. No longer. A highly cited Bain & Company study of hundreds of American companies with customer satisfaction ratings of 85% to 90% found absolutely no evidence that their high ‘customer satisfaction scores’ correlated with creating loyal customers or revenue growth.

Today, product and service quality are the expectation, not the differentiator. All too often customers who appear to be very satisfied with a product or service are only as loyal as the next best offer made by your competition. If you want to develop a strong base of loyal customers who will stay with you and recommend your organization to others, you have to create exceptional value beyond your product or service offerings, and you have to deliver superior service.

The Role of Employee Engagement

In addition to a strategic plan that puts customers at the center of your business, the biggest factor contributing to the level of loyalty your customers have for your organization or brand is whether your employees are dedicated to creating value for them.

Fundamentally, this is a question of employee engagement. A growing body of evidence shows that a high level of employee engagement enables the sustainable profitability that comes from customer loyalty. To deliver exceptional value and service, you need employees who are committed to the work, willing to contribute their talents, and inspired to put in more than the minimum required to get by. And these things can’t be mandated by management. They can only be willingly given by enthusiastic and dedicated individuals.

In other words, the more engaged your people are, the more willing they will be to put in the level of discretionary effort that strengthens customer loyalty.

This is why it’s also critical that you build a culture where employees understand and believe in your organization’s vision, mission and values. People work best when their activities are clearly aligned with a set of principles that they can connect with and get behind.

Does your culture support the kind of engagement that will inspire people to go above and beyond? Ask yourself:

Does our organization’s purpose inspire our employees?

Does every employee understand how his or her role contributes to the overall purpose?

Can our employees describe, in their own words and in a meaningful way, how our organization creates value for our customers?

A Management Roadmap for Creating a Customer-Centric Organization

So, what concrete actions can you take to increase employee engagement and move more of your customers from the “satisfied” box to the “loyal” one? Here’s a 5-step roadmap to get you started:

  1. Create a vision, mission and set of values (or guiding principles) that focus on creating value for customers—this is essential to drive the right employee behaviors.
  2. Operationally define “customer-centric”: Establish metrics that define success and identify the right behaviors to reinforce.
  3. Put your people first:
    • Help them fulfill their personal values and goals and develop their talents.
    • Involve them in creating the implementation plans needed to drive your customer-focus strategy.
    • Invest in them by providing training that’s aligned with organizational strategy.
    • Empower them with the authority and responsibility to make decisions that will produce desired results.
  4. Align all human resource and management practices necessary to implement your customer-focus strategy, and communicate the necessary behaviors and competencies required for successful implementation.
  5. Emphasize the importance of communication and building trust between employees and managers; be as transparent as possible about your organization’s performance and operational strategies.

When people are driven by values and an organizational purpose they believe in, given responsibility for the results of their efforts, and recognized and rewarded for what they do, they will deliver exceptional value and service to your customers. And that’s how you create long-term, loyal customers that results in superior long-term growth.