Mike Hohnen

Coaching for personal growth, change and development

Employee loyalty

The Frontline Manager Makes the World go Around

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Despite the fact that we read stories that companies such as Zappos and others are abolishing the role of middle management, the reality out there is that the vast majority of companies rely heavily on middle managers to keep the wheels moving.

So, unless you have embarked on the experiment of abolishing middle managers, there is a high likelihood that you recognize that your frontline managers are crucial to your business.

Take one metric. Staff turnover.

A controllable cost that also has a high impact on your customer loyalty and satisfaction. It is widely recognized that employee turnover is linked to the management style of the immediate supervisor.

Or, change management.

Whatever customer satisfaction strategy and tactics you are developing – the effort is wasted if your frontline is not implementing according to that plan.

The Frontline Manager is the Linchpin

But, how much attention are you giving the growth and development of those frontline managers?
If you are like most of the companies recently surveyed by HBR, not much.

What that same survey shows is that, paradoxically, the same companies that say the frontline manager is a linchpin in the organization also say that the same frontline managers need to develop a number of crucial skills, including organizational savvy, leadership, and talent development.

But they recognize that not much is being done in the company to actually develop those people – go figure.

The reality out there – still according to the HBR survey – is that most development for this level of management tends to be ad hoc, sporadic, or just too brief to actually make a difference.

In general, it seems that leadership development follows the trickle-down model. Most gets invested at the top; and if there are resources left, they are spent on the frontline managers – sometimes.

So, once again, we have a classic knowing – doing gap. The problem is recognized – but somehow nothing gets done.
I wonder why.
Let’s just recap why frontline leadership is crucial to your service organization. We live in a world of Hypercompetition. Customers are flooded with offers and messages. In every imaginable category, supply outstrips demand.

So, if you are not just going to live a mediocre existence trying to survive, you need to stand out and be, if not the absolute best, then at least among the best.

Your aim is customer loyalty. If you can get that right, you will drive profits and growth as a result. This is the basic learning from the research done that led to The Service Profit Chain.

The best starting point for developing your frontline managers is to introduce them to the Service Profit Chain framework.

If you would like a refresher course on the mechanics of the Service Profit Chain and how employee engagement ultimately leads to profit and growth, check out my free video course here: 

A Managers Guide to a Dream Team

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The Service Profit Chain is a well-documented concept.

Since the original research was published in 1989, hundreds of articles have promoted the original findings which essentially boil down to the fact that happy employees create happy customers – and the happier the customers you have, the more money you make –
Yes, I know that was a very simplified version.

What not so many people talk about, or even document, is that this concept of ‘happy employees’ is not so much a question of employee satisfaction but, to a much higher degree, a question of employee engagement.
So, what are the steps to producing a high level of engagement on a service team?
According to the original research in The Service Profit Chain, there 8 steps in a self-reinforcing cycle called the dream team cycle.
Look closely and you will recognize that this is exactly what the best high profile service companies do:

The Right Team
Careful selection of new recruits. Hire for attitude. Train for skills.Coach for performance and that includes dealing with the bad apples.
Continuous Improvement
Best in class training and development at all levels in the organization. Continuous improvement is considered one of the great benefits of the job. “In this job, I grow”…
Great Support Systems
Service is not just something the frontline does for our customers. Service is our culture. Employees and managers who do not have customer contact service the employees that do. (Our IT department is not the IT-Police – it is an internal service department that supports the frontline in getting the job done.)
Empowerment
The best service employees take pride in solving the problem on the spot. So the freedom to act is hugely motivating. Southwest Airlines famously tells its employees, ”You may do anything you are not uncomfortable doing to solve a passengers problem.”
Clear Expectations
In the same way that anyone who has made it to a great sports team knows what is expected of them, employees in the best service organizations also know what is expected of them. It is part of their motivation to be part of a team that is not afraid to set the bar high.
Appropriate Rewards and Recognition
Focusing on what works, celebrating success, and acknowledging each others contributions makes work meaningful.
High Levels of Satisfaction and Engagement
As a result of Steps 1-6, we generate not just higher levels of satisfaction, but also real engagement – Service work becomes fun and meaningful.

Employees Recommend New Employees
When we need to recruit new team members, our best employees recommend friends and previous colleagues from other organizations because these are the people they would like to work with. Gradually we become the preferred employer in our region – which means we get the pick of the crop.

And that takes us back to Step 1 – The Right Team.
Done consistently this 8-step cycle become a self-reinforcing process that propels our service delivery capacity to higher and higher levels – and we all know what that does for our customer satisfaction and loyalty.

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Building a great service business begins with understanding the Service Profit Chain framework. In my view, that is the foundation. Check out my free introduction here

Customer Loyalty – the magic formula

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Most of us experience a market situation that can best be described as hyper-competition. Supply out strips demand in virtually any category you can think of.

When that plays out advertising becomes less and less useful because there is already so much of it that few people, if any pay attention to it.

So the name of the game is customer loyalty – trying to draw customers closer to us in such a way that they are less tempted to switch to the competitions latest bargain offer.

Many companies use a variety of sophisticated marketing tools and tricks to do this from simple punchcards that give you your 10Th coffee for free to more elaborate loyalty clubs like what many Air Lines have developed.

But I don’t think that bribing customers to come back is what really counts. It may produce some form of customer renetion but there is no emotional loyalty.

What is loyalty then if not retention or what is the difference you may ask?

Well, there are two reasons we need customer loyalty. One is the obvious, that it is much cheaper to sell to an existing customer than it is to acquire a new one.That is the Customer retention part.

But more importantly loyal customers tell their friends – in fact the more loyal they are the more they talk about it – and that is what makes the all important difference between mechanicaly loyal and emotionally loyal.

When you have positive emotional feelings about a product or a brand you become an ambassador or what Fred Reicheld calls a ‘promoter’.(Here is a quick overview of the Net Promotor Score system)

Obviously in order for customers to become loyal they must first of all be satisfied to some degree. Customer satisfaction is the prerequisite for customer loyalty. But how much customer satisfaction does it take to create lasting loyalty?

From deeply dissatisfied to relatively happy, nothing much happens. Then, as satisfaction becomes more than just satisfaction and turns into enthusiasm, loyalty increases sharply.

But notice that when we deliver the right service/product at the right price, at the right time, and to the agreed-upon specifications, we score a 3 or possibly a 3.5 if we are lucky.

“Hey! But that is not fair,” you might be thinking, “we are doing everything perfectly and just as agreed, and all we get is lukewarm feedback!”

Doing everything perfectly and as agreed upon is exactly the problem. When clients read your marketing material or listen to your sales pitch, they learn that you will do this, this, and this for them at this price and on such and such terms.

So, who will be impressed when you actually deliver on what you said you would deliver?

You are performing exactly as expected. If you do less, they will be annoyed. If you do more, they will be en route to enthusiasm. If what you do far exceeds their expectations, they will be ecstatic.

But what can we do more than delivering everything we said we would?

We can establish an emotional connection. And because so few companies get it, it is still unexpected. When we touch our customers emotionally we exceed their wildest expectations.

Just think of a wonderful service experience you have had at some point. What made it exceptional? The mechanical stuff or was it because some one touched you at an emotional level some how?

Nine times out of ten you will find that what creates enthusiasm and loyalty is an emotional connection.

So forget the punch cards and the bonus points – what you need to work on is your team.

It is the attitude and loyalty of your team to your business that drives true customer loyalty. ( see my previous post on Employee loyalty here)

Loyal employees create loyal customers – that is the magic formula and that is also at the heart of the Service Profit Chain

Musen er død…

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[lang_da]Det er ikke alt, hvad Alexander Kjærulf siger, jeg er helt enig i, men i hans pointe om den dødssyge mussamtale, har vi gjort mange af de samme observationer.

Den er for mig en forfærdelig sutteklud, som i bedste fald ikke gør nogen skade, men i værste fald er voldsomt demotiverende. Det er en sutteklud, fordi den giver mange ledere en illusion om, at de gør det de skal i form af feedback.

Men forestil dig at du var tenniscoach og du har fået opgave at coache et supertalent
– ville du gøre det ved at holde årlig MUS-samtale?

Masser af lederer bruger MUS-samtalen som undskyldning for ikke at bruge tid i dagligdagen på at give løbende feedback: “Vi tager det til MUS’en”…

Feedback is the breakfeast of champions – det er ingen tvivl om, at der er en tæt sammenhæng mellem performance og feedback. Det er derfor, at tenniscoachen står på sidelinjen og giver sin spiller feedback under træningen. Masser af feedback – hele tiden.

Det der virkelig giver arbejdsglæde er at vide, at man bidrager, at det ikke er ligegyldigt om man er der – at gå hjem og føle, at man har gjort en forskel er helt afgørende. Måden man bliver klar over det på er gennem feedback – masser af feedback.

Men læs selv Alexanders indlæg her
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