Streamline Training & Documentation: The Role of Training in Building Customer Loyalty

Tuesday, May 22, 2007

The Role of Training in Building Customer Loyalty

A little over a year ago, I talked about Fred Reichheld's findings concerning what builds loyalty among profitable customers. As a follow-up, I'd like to call attention to what Reichheld has to say about the role of training in promoting customer loyalty.

In the May 2006 issue of Training magazine, Reichheld was interviewed by Joe Kornik, editor-in-chief. When Kornik asked how training can help with loyalty, Reichheld said:

The biggest shortcoming I've seen in the training industry is the lack of a linkage from what the organization says is their ultimate goal and the way the employees treat the customers. Training is not just a way to increase customer service, but it's a way to help employees put themselves in a better position to be able to drive profitable growth for the company. That seems like a simple connection, but rarely do I see companies making that connection because they have no real way to measure it. They measure profits, but they have no way of measuring how many of their customers are being turned into loyal customers or promoters. That's the missing link in most corporations today.¹

Reichheld points out that training alone cannot offset the negative impact on loyalty of misguided company policies that annoy customers, lead them to complain to friends and acquaintances, and ultimately detract from a company's financial performance. Reichheld goes on to say:

Employees are much more proud and energized to be in a place where the real mission is to treat the customer right. ... If you're going to be earning a portion of your profits through these types of dirty tricks [e.g., nuisance fees at banks], and you're going to require that your employees enforce them, then you can spend on training until you're blue in the face, and it isn't going to make any difference in the end.

So, the bottom line is: Don't just "train" employees to do the right thing for customers. Make treating customers (at least those not inveterate game-players) part of your business model.

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¹ Reichheld offers his solution to the measurement problem in The Ultimate Question: Driving Good Profits and True Growth, published by the Harvard Business School Press in 2006.

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Labels: Branding, Leadership

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