Cycle of Success Spirals by BretSimmons
Yesterday I wrote an article entitled Engagement: There is Something Wrong with This Picture. I looked at a study published in the Journal of Applied Psychology and discussed some of the problems I have with the conclusions the article suggests about engagement.
But I love the conclusion the study suggests about the link between employee performance and customer loyalty – a major principle of the Service-Profit Chain. One thing the authors suggest that is really interesting is that loyal customers can have an effect on how well these service employees do their job. They call this a cycle of success spiral:
..it seems that the greater the customers’ intention to return to this specific hotel or restaurant for future service, the higher the climate for service among employees, which in turn influences customers’ appraisal of employee performance. Employees and customers in these situations appear to be playing a key role in a cycle of success spirals (Heskett et al., 1997). Our results follow this line. We found that service climate and customer loyalty seem to have these positive reciprocal relationships. (p.1224)
If you expect your employees to provide impressive customer service without providing them the resources they need to make it happen (training, technology, autonomy) you are living in la-la land. Enable your employees to provide kick ass excellence; your employees will love it and so will your customers. Those delighted customers will return, which will further delight your employees.
Customer loyalty hits both your top line (return sales and referrals) and bottom line (e.g. less advertising and promotion costs), while employee loyalty hits your bottom line (e.g. increased productivity, lower recruitment and training costs).
All of this happens ONLY by design, not wishful thinking and exhortation.
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