Employee loyalty is crucial for business success as it directly impacts customer experience where every single interaction with the brand through the employee is the ‘moment of truth’ for the customer, says Ashok M.S., Chief Operating Officer, Accentiv.

How is customer loyalty different from employee loyalty in terms of concept and approach?
The principles applied to building loyalty are the same whether it is for the customer or for the employee. The principles include providing a great product or service experience which the customer or the employee cherishes, giving incentives when customers or employees exhibit a desired behavior and sustaining a meaningful communication with the audience. In both cases, the hygiene factors, like salary and work environment, in the case of employees, and product quality and overall buying/usage experience in the case of customers, have to be met before we can build loyalty.
However there is a lot of difference in execution. The employees themselves are critical success factors in making a customer loyalty program tick. Employees live and breathe the brand daily and so they need to be totally aligned to the brand promise. It is therefore imperative that the levels of engagement are much higher and there is absolute transparency in terms of the program construct and communication. The incentive for exhibiting a desired behavior needs to be more direct and visible and employee loyalty works best when the rewards are tangible.
In the case of customer loyalty, the interaction with the brand is less frequent, so it is important that during every interaction, the brand promise is delivered effectively. The customer loyalty approach can also have a balance of tangible and intangible rewards, pushing the customers to desire a higher status in the program and work towards it. While employees are likely to be more charitable if there are occasional slip ups in the employee loyalty engagement as they have also invested in the relationship, customers are less likely to forgive if they find that the brand is slipping on its promise.

How is employee loyalty correlated to customer loyalty? What comes first?
Clearly employee loyalty comes first. For an organization to induce customer loyalty or implement a customer loyalty program they should have enthusiastic, empowered and fully satisfied employees. That alone will make the customers cherish their interaction with the brand. Employees can make or mar customer loyalty and unless the organization is fully confident that it has a very satisfied workforce it cannot implement customer loyalty programs successfully.

In your opinion, is customer loyalty originated & fueled by employee engagement?
From my experience, employees should come first; the reason is that for the customer, every interaction with the brand is a moment of truth, be it while calling a call center or visiting the retail counter when buying the product. In this moment of truth, it is the employee who will represent the brand. Therefore, it is essential for employees to not only be adequately trained, but also to feel happy working for the brand so that they convey the joy and pride with which the brand should be sold. When that happens, customers’ experience will be good and that will build loyalty over a period of time.

Would you say customer loyalty transports from the strong emotional connect with the brand than in any other way?
Correct, because the customer interacts with the brand once or twice a year; it is not like 8 hours a day as in the case of employees. The employee is living and dreaming the brand, hence it is very important that he or she likes the brand and cherishes working for the particular company. The employee connect must be very strong.

Could you share some examples of companies in India that have understood the importance of the brand being consistent at every touch point?
There are many companies which have done this in the past and continue to do this in India very well. An example that comes to mind is Bharat Petroleum. Their primary focus was on training the employees, everybody in the customer chain including their delivery boys at the pumps – 50,000 of them were taken to the training program. The employees believe in the brand and they effectively communicate the brand value to the customers. This actually helped them to gain a good market share as well. Another example is the Tatas. The employees are very proud to be working for a Tata company and it manifests itself at every touch point and employees are willing to go that extra mile to help customers. In the retail front, companies like Lifestyle and Shoppers Stop have very strong employee engagement programs. They train their employees well and that is manifested in the customer experience at the final touch points. Companies like Airtel, Genpact and Aon Hewitt have very good reward and recognition strategies in their CRM approach.
The workforce today is very young and the churn rates are high, so employee engagement activities and training ensures that employees are proud to be working for the company. Even when an employee deals with an irate customer, they are able to handle it very well. It is important, especially for customer facing employees. An engaged and happy employee is able to empathize with the irate customer without compromising the brand value.

What are the elements for engagement and loyalty for employees?
Training employees on brand value and product knowledge is very important, so that they align their pitch when they talk to customers. Secondly, it is important to constantly communicate with employees to reiterate the learning at the training program, so that employees retain it. Engaging the employees only basis work-related communication may not yield results. The intranet should also have other relevant content which enables them to have a better work-life balance like content on healthy eating, keeping fit, etc.. This enhances the happiness of the employees and will enable them to deliver better touch point experience for the customer.
Customer or employee acquisition is 3-4 times costlier than retaining a customer/ employee. The present system of automation has enabled companies to track customer churn rate. So to acquire the business intelligence, companies are willing to invest in, both customer and employee loyalty programs. You need to continuously engage with customers and employees. So, while budgeting you need to provide for the cost of communication and cost of rewards. Once the programs start making sense to the target audiences, whether it is employees or customers, over a period of 3 to 5 years, you will start seeing those results coming in.

How is employee loyalty building different than customer loyalty building? Which takes longer?
Let me explain with an example – in retail, where the interaction is almost twice or thrice a month, the customer starts seeing that with every visit he/she gets some points which is a tangible benefit that he/she can redeem for something meaningful. The overall experience of the store is good, the ambience is good, and employees are courteous, so loyalty starts building within 3 to 4 months. Whereas in the case of employees, in the first year the employee is still sceptical and wondering whether the company is meaning what it is professing? In the second year, thanks to constant reinforcement of the company’s values, the employee gets more serious in the job and it is in the third year when the actual loyalty or the emotional connect with the company starts building, and only when that happens, can one expect the employee to stay for the next 3-5 years. Hence, building employee loyalty takes longer.

How do organizations differentiate between the two?
For employees, it is not a loyalty program but is more of a rewards and recognition program. Employees are recognized for their contribution to enhancing the brand value and demonstrating exemplary talent in an open forum which helps in building loyalty to the brand and the company. While the hygiene factors of salary, etc. are essential, building an emotional connect increases the chances of retaining talent.

Is Indian business patient?
In India everybody wants results as of yesterday. Top management’s horizon has shrunk to a three year period. Managers have started pushing for results at the end of the first year itself, but one needs to be a bit more patient. For the program to sink in with all benefits it takes upto a year. You need to continuously invest over a period of time before you start seeing results. Having experimented in the past, I think the realization has come to many companies that this is a long road. People understand the difference between a tactical engagement which is short-term and a proper loyalty engagement which is for a long-term.

How do you know which loyalty program will work for which company?
It is a tough one. While designing a customer loyalty program, we undertake a detailed profiling of the customers, which helps us build the program features and rewards catalogue which will appeal to the respective profile. Similar is the case with employees. Of course, the organization and HR already has an idea and are able to contribute very well in deciding what sort of program is suitable.

How is employee and customer loyalty measured? How do you track improvements over time?
Employee loyalty is measured by employee satisfaction surveys, employee participation in the various activities, and reduction in attrition rate and overall improvement in the bottom line of the company.
Customer loyalty is measured in terms of penetration and value contribution of loyal customers, response to program communication, percentage of active customers, customer satisfaction surveys, response to cross-sell and up-sell campaigns and overall ROI for the program spend.
Employee loyalty and customer loyalty metrics can be tracked over time for improvements and decline, and specific issues enhancing or impeding the metrics can be identified and addressed. This is done by measuring the same set of metrics over a period of time with identical audiences.