Good insights from The Wise Marketer on the correlation between satisfied customers and satisfied employees.
It's easy to get so involved in the intricacies and technicalities of loyalty programs that the most important part - the human aspect - gets neglected.
The technology involved is a marvelous tool - without it, loyalty programs as we know them would not be possible.
But we must remember that loyalty (and its opposite, the desire to simply walk away) are both intensely human emotions. And, unless the program generates an emotional connection with people, it won't work.
We must also remember that humans aren't as predictable as technology.
Actions that might make one person loyal could well turn off someone else. It gets even more complicated: something that could engender loyalty in someone on one day might do the opposite on another day.
Customers are human, and loyalty is a strong emotional link.
Who is more qualified than customers to tell us what customers want, and what they don't want?
One thing is certain, building loyalty will not get any easier. While advances in technology have made loyalty programs more effective, accurate and appealing to customers, these same advances have made it much easier for customers to switch suppliers.
Comparisons of stock, prices, trading policies, delivery times and costs are now readily available to customers. And if the item is to be sent to them, do they care from where it comes?
Many suppliers are apparently equally trustworthy and reputable.
It is important to have some unique property that makes you stand out from the crowd. All other things being equal, a good loyalty program can do just that.
A loyal employee is more valuable than a loyal customer...
Employees are also human, and they bond emotionally with your customers.
The virtuous circle of "customer - employee - shareholder - customer" has become well-known in loyalty marketing.
These groups go together and if the loyalty or even co-operation of any of the groups is lost, the chain breaks.
To be completely successful, they must all work together, supporting each other, to build strong relationships.
According to Frederick Reichheld, the father of the Net Promoter Score, "the only way a company can build a loyal customer base is by building committed relationships with the employees responsible for serving those customers."
In fact, "loyalty leader" companies identified by Reichheld were seen to out-perform their competitors by a factor of 2.2 in the stock market.
Recent research supports the view that top executives are not only realizing the value of employee loyalty, but actually doing something about it.
It would seem that while there is no shortage of businesses that pay lip service to employee loyalty - even featuring it prominently in their company policy - fewer actually have procedures in place that percolate through the business right down to the bottom and exert a real effect.
The days when management could expect undying loyalty simply because they have employed someone have gone forever.
Add to that the fact that in many cases, it's actually the employees near the bottom of the ladder - those who are often treated most poorly and are underpaid - that have most personal interaction with customers, and it becomes clear that there is a problem.
Without loyalty to the business there won't be enthusiasm at the customer facing level, and that's enough to nullify very expensive marketing programs that are intended to show customers how important they are.
In this time of universal cost-cutting resulting in employee cutbacks, fewer employees are being asked to do more and more work and, quite understandably, are becoming demoralized and discontented.
It is becoming increasingly difficult for HR managers to maintain the loyalty of their employees.
And of course, the level of employee loyalty is influenced by factors other than those within an organization.
The state of the general job market has a major effect on whether employees change jobs frequently or not. As more jobs open up, the opportunities to defect increase.
So how should top management approach the challenge of increasing the loyalty of employees?