07/ 14/ 2004
by Jeffrey Moses
As experienced small-business owners know, it costs much more to acquire new customers than it does to keep the ones you already have. Create loyal customers by offering special preferred-customer sales and promotions, reward repeat purchases with discounts or additional free merchandise, and respond to customer requests for items to be stocked.
These activities and others will help create repeat business, but each of these has its limitations. They are, after all, one-time or, at best, two-time events. You need customers every day, but you can have a special preferred-customer sale only once or twice a year.
The foundation to creating a wide base of loyal customers is the loyalty and commitment of your employees -- your sales staff, your managers, your receptionists and cashiers, your technicians or repair staff, your accountants or bookkeepers and all others who come into contact in any way with customers. The more loyal your employees, the more likely they are to create repeat, loyal customers.
Loyal employees are those who have made an emotional commitment to remaining with your business for the long-term. This commitment translates into a financial bond: employees know that the better the company does, the more secure their jobs will be. This knowledge will enliven every interaction they have with customers. Special sales and other activities are worthwhile, but the ongoing, day-to-day enthusiasm and commitment of loyal employees will do far more to create loyalty among customers.
Loyal employees are creative; they look for ways to create sales and to satisfy customer needs. Loyal employees are dedicated; they go out of their way to create extra value for customers, even to the extent of working into the evening and weekends when required. Loyal employees look to the long term, not just to the immediate sale. They realize that doing whatever it takes to give customers a positive shopping and buying experience will strengthen their own futures. In other words, loyal employees spontaneously do just what a business needs for growth: they show customers that they care. That, in every instance, is the most important criteria for establishing loyal customers.
The creation of loyal employees is both a science and an art. Proven ways to foster an atmosphere of loyalty among employees include:
- Long-term financial motivation. Profit sharing, stock options and employee ownership plans are all viable options.
- Recognition for accomplishments. Employees need, above all, to feel needed valued and recognized as part of the team.
- Opportunity for career growth within the company. This includes both financial growth and the chance to take on more challenging, personally rewarding responsibilities. Whenever possible, promote from within.
- Close professional and personal interaction with management and company ownership. Employees who are recognized and personally known to management are much more likely to feel valuable. Employees should be a part of all company meetings, parties and group activities.
- A company culture that promotes sharing of ideas, team effort and the recognition that individual accomplishment is good for everyone. Companies that develop a culture that promotes selfishness or backbiting will have few loyal employees.
- A culture in which employees are not overly fearful of making mistakes. Enthusiasm is stifled when occasional mistakes are dealt with harshly.
- Showing employees how their tasks affect the company’s bottom line. When employees understand how valuable their jobs are to the overall success of the company, they will naturally become more dedicated to excellence in all they do.
- Inspiring and rewarding creativity. When employees find a better way to do something, reward them for their ingenuity. Don’t allow your company’s chain of command to become stagnate and unreceptive. Make it easy for new ideas to filter upward. Only when managers (and you as the owner) are aware of new ideas and open to implementing them, can the creativity of all employees find expression company-wide.
