Customer Employee Loyalty

Loyal customers create loyal employees

On average, it costs a business 6-7 times more to acquire a new customer, than it does to retain one. If a business has actively focused on a customer loyalty driven strategy, it can afford to pay employees better. That’s because, on average, they’re spending less to acquire customers.

This relationship as Frederick Reicheld says, “Increased pay helps boost employee morale and commitment; as employees stay longer, their productivity rises, and training costs fall; employees’ overall job satisfaction, combined with knowledge and experience, leads to better service to customers; customers are then more inclined to stay loyal to the company; and as the best customers and employees become part of the loyalty-based system, competitors are inevitably left to survive with less desirable customers and less talented employee” (Reichlend and Sasser).

This is especially true when we look at serviced based roles. If a customer has developed a personal relationship with salespeople or staff, the customer tends to rely on that individual’s decision-making help.

This relationship is beneficial to both the business and the customer. Further, the more regular a customer becomes, generally the higher the level of customer satisfaction. Likewise, if staff are dealing with content customers, they are much more likely to enjoy the job more and do a better job.

To a business owner, this should seem straightforward. It costs both time and money to train new staff. If a company can retain good employees and develop loyalty both in their customers and staff, overall the company is better off.

If you’d like to learn how to start creating loyalty within your customer base, start off by taking an assessment of your customer's feedback.