The first step toward satisfied customers is satisfied employees.
The loyalty approach we call ‘Customer First’ is, above all else, a growth strategy – an ethos, a vision, a mindset and a practice of putting the Customer at the centre of decision making throughout an organization in order to sustainably drive sales and profit growth.
Going beyond the concept of ‘Customer centricity’, a Customer First approach actually suggests a sequence or order to organization’s operations model to start first with Customers, then next with staff, followed by shareholders and suppliers. An anagram to remember this approach is to think about satisfying the C.E.O.S of the business (Customers, Employees, Owners, Suppliers) in that order.
Customer First starts as a vision and strategy. In order to execute on this vision and deliver on the strategy in a way that Customers can fell a difference in their experience, the concept must first win understanding and buy in from staff, and employees must be trained and coached in the behaviours and tactics of putting Customers first. The real task is to create behaviours and actions that change the way of employee thinking (and not vice versa) so that Customer First becomes their reflex, their default action, and the purpose for their job.
Although it may sound paradoxical, the first logical step toward installing Customer First is to put Employees first.
Leading with empathy and respect teaches empathy and respect
The fact is well documented in management science that the better employees are treated, the better they will treat the Customers. Empathy for staff teaches empathy for Customers.
Good leaders build up ‘relational bank accounts’ with their employees: leaders earn credits by giving recognition, appreciation, thanks, honesty, dignity, kindness, and respect to their teams. Being themselves trustworthy and selfless, and showing simple courtesies and encouragement to staff also earn ‘deposits’ into these ‘trust’ accounts. [For more on the concept of relational bank accounts and the principle of servant leadership, please see the book called The Servant, by James C. Hunter, page 134]
Withdrawals from the relational account occur when a leader (for example) is discourteous, poorly listens, breaks promises, displays arrogance, punishes unfairly, or gives poor support to the team. For every withdrawal, it takes 4 deposits to get even.
Treating all employees with dignity and remembering that each employee is an individual with different needs and aspirations teaches employees that all Customers deserve to be treated with respect and individuality (which we call ‘personalisation’).
Employees, in turn, learn how to build up relational bank accounts with Customers – earning credits for giving recognition, appreciation, thanks, kindness, dignity and respect to shoppers as individuals. And each employee learns to recognise and correct potential withdrawals by Customers for disappointing service, broken promises, unfair propositions, and punishing policies or practices.
When it comes to empathy and respect, the apple doesn’t fall far from the tree.
To bring Customer First to life, first empower and energize staff
Sadly, most organisations give front-line employees – the very faces of the organisation to the Customer – as little trust and authority as possible. Customer First organisations give front-line employees broad authority to resolve Customer needs, and extend the power to satisfy Customers to most members of staff, in some form. [For world-best practices in this regard, please see the policies from Nordstroms in the US and Ritz-Carlton globally].
Trust – who is trusted to do the right thing for Customers?
Observe who in the store has the power to satisfy Customers making a return or wanting a refund: is the front line employee empowered to satisfy the Customer, or must the Manager be called?
The store’s practice says volumes about who deserves trust in the eyes of the business. Requiring levels of approvals and higher Management involvement (or some other form of hoop-jumping) is neither trusting of employees nor Customers.
Ownership – who ‘owns’ the Customer?
Watch to see where Customers must go to get service: is there one ‘service’ desk where Customers must queue to ask a question or make a complaint, or can the helpful cashier make it good on the spot? Are all employees empowered to assist Customers in finding products on the shelf?
The best practice in my experience in putting employees first by giving trust and ownership is, regrettably, no longer practiced. The concept (originated by King Soopers, now a division of The Kroger Co.) was to give every employee the power to resolve any Customer concern instantly on the spot, in store or in any social setting, via conflict resolution training and a solution called a ‘Guest Appreciation Certificate’. Every employee carried a small pad of these certificates on their person.
Training and empowerment was given to all employees. Employees were energised to personally own the Customer, and were shown that ‘You Make the Difference’ as people, to Customers, versus the competition, and as valued contributors to the business.
Give employees a new common Customer Language
When you think about it, there is a common language spoken fluently in the industry and in stores for products – terms like SKU, out-of-stocks, shrink (wastage), case, shipper, promotion, etc. And, there is a language about the store itself – words like gondola, front end, power alley, racetrack, etc., to describe the structure. What most business don’t have is a language around their Customers – what needs Customers have, who is more loyal or gives opportunity, what the various shopping missions are, how the store is actually shopped by people, etc.
One early step in putting employees first – thereby empowering and giving ownership of the Customer – is to create and teach staff a language about their Customers. The vocabulary starts with Shopping Habits, and the primary sentences are about Price Sensitivity, Store Segments, Life Styles, Loyal Customer Mailings, Customer Promises, and so forth.
And to be fully empowering, the language must be translated into simple store-level expressions; for example, what percentage of our shoppers are Loyal Customers and how do I recognise them? How many Customers need I be certain are satisfied each day in my store to help grow or cement their loyalty so that our store sales increase?
Are you helping Customers or stacking apples?
The retail industry also has a common (and necessary) language about operational efficiency and productivity – terms like ‘man-hour sales’, ‘scanned throughput’, ‘cases-per-hour’ stocked, ‘store labour percentage’, ‘effective labour rate per hour’, etc. This language is so pervasive and measured (and what gets measured gets managed, as they say) that employees are often confused into thinking that their job is more about completing a task as an end in itself rather than as an activity that delivers value to Customers.
Once a young stock clerk myself, my task was to stack apples in attractive displays that made choices and selection easy for Customers. I became frustrated when Customers picked some apples off my beautiful display, because it meant that I then had to start over again stacking more apples to make a nice full presentation. And my productivity was slipping because I also needed to stack a case or two of lettuce as soon as the bloody apples were finished. When I was later called away from my apples to help as a cashier for a few minutes, or if I was distracted by a Customer asking me to help her find the applesauce, I became angry because my output numbers would be lowered and the display would be sold down even more!
I was being rewarded more for stacking apples nicely than for respectfully helping Customers. My training and my measures of success impressed on me that my job was really about stacking apples over serving Customers – the task first. So when I complained to my boss that I could do a better job if the Customers just left me alone, I was not surprised when he agreed. Of course, he went on to say, if only Customers would stop buying apples or quit needing to be checked out, then my tasks could be completed with great productivity and skill, and the display would be beautiful, no doubt. He reminded me then that he would not need me to work my next shift because the apples would not need stacking, as no Customers would have disturbed my good work. (Point understood; I never complained again, but this lesson helped ignite my mission to always put Customers first with the outcome of driving sales, which in proper turn, improves productivity).
Putting employees first is often about liberating them from focussing only on doing things right (tasks, production, etc.) to also thinking about doing more right things for Customers in the larger context of Customer First.
Rewrite the policy manual
Putting employees first so that they can better bring Customer First to life often means rewriting the employee policy manual. Beware of insensitive or insensible policies; one example is a sick day policy that requires every employee to bring in a doctor’s excuse, even for an absence of one day. Too often, policies are written in an attempt to manage behaviours exhibited infrequently by a very small minority of staff – the good of the many is outweighed by the bad of the few. Policies framed in a parent-to-child tone are disrespectful of staff and are ultimately counter-productive to creating a healthy Customer First culture.
Similarly, review the policy manual for serving Customers to assess how heavy the terms and conditions, or rules and regulations are for Customers. Does the Customer carry the burden of proof for refunds or exchanges? Are employees essentially allowed to trust Customers in various service situations?
The best Customer First practice we’ve seen for both the employee and Customer policy manuals inserts an extra page in the front of the manual outlining a Prime Directive that “Every employee of this company has the authority to do things for Customers outside this manual when the situation dictates”.