Loyalty is a powerful tool, but like a blueprint, is made up of many components and elements. It’s built through daily interactions, behaviors, many touch points and habits. By building a loyalty blueprint, companies can establish enduring connections with their frontline workforce that transcend mere transactions and routines, and last beyond a mere moment in time.
What if we told you that every action you take can build a powerful advantage for your organization?
The advantage? Loyalty.
In the dynamic world of business, loyalty has evolved into a valuable currency. In this blog, we delve into the captivating concept of loyalty and how it can be harnessed to boost retention and productivity within your frontline workforce.
Whether you're a company looking to enhance how you retain dedicated employees or want to improve employee engagement, these principles should feel highly relevant.
.png)
We recently spoke with Gal Zauberman, the Joseph Cullman Professor of Marketing at Yale and an advisor to Denim.
Gal studies human judgment and decision making, including the nature of experiences and memory for emotion and choice, about his thoughts on establishing loyalty within an organization, and more importantly, how these organizations can move to action.
He reminded us, “Loyalty should be viewed as an ongoing journey. It commences with individual behavior, each reward offered, and every habit formed. By nurturing this journey, businesses can establish enduring connections that transcend mere transactions and routines, ultimately fortifying their frontline workforce.”
Here are his suggestions on exactly how companies can build loyalty with its workforce.
Building Loyalty Through Behavior
To foster loyalty - whether among customers or employees - leaders must recognize the role of behavior. Daily, weekly and ongoing behavior.
Just as individuals have routines in their daily lives, companies require effective routines and structures. A key notion is that "being part of this routine" and excelling within it starts with behavior tied to recognition and incentives.
Consider the costs associated with changing a behavior – they extend beyond finances to emotions. People typically resist change, unless there's a direct clear path forward and a compelling motivator. (More about motivators in a moment!)
One way companies can address this by creating a platform or a system that clearly communicates expected behaviors and goals. To go a step further, Gal encourages companies to be as transparent as possible on how the expected behavior impacts broader company objectives. Essentially, giving employees “line of sight” to the impact they make on their company.
For example, how do the daily behaviors of a team member in a housekeeping department or an assembler on a manufacturing line impact overall company performance? Frame their tasks and activities around efficiency, quality and safety build up to big outcomes - make sure they understand how. It is not about ‘cleaning the machine’, but ‘keeping the team safe.’
In many ways, building loyalty through identifying and communicating critical behavior and the meaning of their work puts more control in the hands of your team to create shared success.
Gal's Reminder: “Construct a platform that allows people to engage. It will build currency with your teams and that currency accumulates into short term and long term returns.”
Did you know? Research has shown that teams who set goals obtain 20–25% improved work performance! 1
The Power of Habits: Cultivating Loyalty Through Repetition
Habits are the cornerstone of loyalty, whether in customer behavior or employee commitment.
Habits form through repetition of critical behaviors and cost very little to establish. The power of habits, if successful, revolves around the notion that not engaging in a habit becomes more painful than engaging or perpetuating it.
To instill superior habits and create motivation, it's crucial to introduce tangible elements into the process and then grant individuals the autonomy to develop their habits. The earlier this is done in an employee’s tenure, the more effective it will likely be.
Managers can help employees develop good habits with these three simple, tangible steps:
- Provide cues: Trigger moments and clear expectations
- Create routines: Repetitive behaviors
- Provide recognition: Rewards & feedback
In short, create a work environment that encourages positive habits, from the tangible daily activities to team dynamics, such as collaboration and innovation. Let your employees do the rest.
Gal's Reminder: “A habit is built with repetition and has low cost.”
Did you know? Praise and commendation from managers was rated the top motivator for performance, beating out other noncash and financial incentives, by a majority of workers (67%). 2
Apply a Customer View: How does your employee view value?
When it comes to employee loyalty, it's useful to have a customer perspective.
Think about what would make you feel loyal to a business as a customer. What kind of customer experience would you expect? What kind of rewards or value would you appreciate?
Customers often develop loyalty by examining the actual - or psychological - costs of change. In other words - they balance the value they currently receive versus what an alternative might provide. A similar approach can be applied to employees.
In fact, you probably know exactly what your customers value most about your business.
Consider what your employees value most. Flexibility? Pay? Recognition? A sense of community? If you don’t know, then ask. Or even better – systematically study.
Businesses must offer both in-the-moment and longer-term value to their employees. It will serve as a reminder that their achievements are recognized, and most importantly, impact the greater good of their organization.
Gal’s Reminder: “Just like your customers have unique needs and perspectives, so do your employees. How they view the business may not be the same as yours - understand them uniquely to create the best experience for each of them.”
Rewards and Retention: Pivotal Role for Loyalty
Rewards play a pivotal role in fostering loyalty.
The structure of rewards, including both present and promised, can be a powerful motivator. Ensuring your employees understand the totality of a rewards structure will translate into a structure your employees can predict, impact and have the autonomy to impact.
This understanding leans on concepts like medium maximization and loss aversion, underscoring the significance of short-term and accumulation-based rewards.
.png)
Companies can get more from their investment in their people and create a sense of loyalty currency by establishing engagement and rewards & recognition programs. When employers tailor rewards to the context or the individual, they can foster engagement with deeper meaning.
Just think about how successful consumer rewards programs have been – and continue to be - when they allow individuals to accumulate points and rewards over time, all while contributing to a shared outcome.
In the employee example, a reward & recognition program employees can see, control and contribute to is powerful. The essential task is to make the accumulated rewards and flow of progress and new incentives vivid for your workforce. It connects tangible rewards with the less tangible, although still important, recognition.
Not to mention, tracking and displaying progress will create a digital work record for your employee – an uncommon yet powerful tool for the frontline, deskless workforce.
Gal’s Reminder: “Strive to create near-term, concrete goals that are easy to understand and tightly aligned with incentives. A reward for behaviors that happened three months ago will have less impact on repeatable behaviors than one given real-time.”
In Summary
Employee loyalty is a valuable asset for any company, but is especially important for companies with frontline workforces who may not participate in the regular flow of communication and decision making. In the pursuit of loyalty, companies must embrace the influence of behavior, habit-building and rewards. By understanding the psychology of loyalty and taking steps to build loyalty among employees, companies can boost retention, productivity, and overall success.
At Denim, we are committed to helping businesses retain and grow a happier, more productive frontline workforce. We help establish direct communication channels, drive performance by clarifying goals and work habits, and reward employees for the right behaviors.
Are you ready to increase employee loyalty within your organization? Let’s talk!
1CMOE.com
2Bersin by Deloitte
