All businesses are competing to achieve profitable growth in today’s competitive marketplace. In order to achieve profitable growth a business must have strong customer retention. This in turn, comes from customer satisfaction. Customer satisfaction directly relates to employee satisfaction – if employees are pleased and fulfilled this will translate to satisfied customers. In order for employee satisfaction to occur the proper foundation must be built. This can be easiest to represent through a pyramid.
All successful companies know the value of profitable growth. All growth is not created equal-not all growth is profitable. Profitable growth enables companies to retain good employees, reward performance and invest in the future. Profitable growth is key to all things good in the business world.
Once it is understood and established that profitable growth is important, the next step is to explore how to achieve this growth. The foundation of profitable growth is customer retention. It is impossible to achieve profitable growth without retaining current customers. New customer acquisition requires investing a tremendous amount of precious resources including time, merchandise and funds. According to Leading on the Edge of Chaos, acquiring new customers can cost five times more than satisfying and retaining current customers. Maintaining existing customers does not require that same level of investment. A 2% increase in customer retention has the same effect on profits as cutting costs by 10%. i To learn more about the four steps to improving customer retention and growing your market share click here.
Satisfied customers are customers that forge a long lasting relationship with a company because they have no reason to explore other options. Finding the solution to customer satisfaction can be tricky. The keys to customer satisfaction are not game day tickets or the gift of a fancy dinner. Customer Appreciation Days and cookouts are thoughtful, but at best these drive customer appreciation (not to be confused with customer loyalty). The best way to achieve customer satisfaction is to provide your customer with a high quality customer service represenative that is satisfied, cares about his company and his committed to delivering value to his customers. There is a direct connection between satisfied employees and satisfied customers. Satisfied employees will be a customer advocate, have a more positive attitude and generally provide a better overall customer experience.
The next step in The Growth Pyramid is discovering the key to making an employee happy. The most productive and satisfied employees have achieved a balance of time, income and employer respect. An employee who makes great money but works 70 hours a week does not have the time to enjoy his income with his family. There is great value in rounding out the employee experience by inviting their feedback and opinions on an on-going basis. This is showing your employees respect. No amount of Christmas bonus or holiday turkey can compete with the value of feeling empowered and respected in the workplace.
Successful companies understand they should focus the majority of their attention on employee satisfaction. This may sound counterintuitive because it may seem on the surface that employee satisfaction is not responsible for profitable growth. Happy employees contribute to the type of organization that pulls employees and customers where they want them to go instead of pushing them in that direction. Employees support achievement that leads to being a part of a winning a team. Employee accountability in conjunction with a positive work environment and fair compensation will lead a company to success.
Owners that want to improve overall profitable growth should not focus on growth. Yes, you read that correctly. Conversely, focus on giving your employees a fair balance of income, time and respect. From this The Growth Pyramid is born. From well-rounded, happy employees comes that satisfied customer detailed above. Satisfied customers equal retained customers which equals profitable growth. It may seem backwards not to focus on growth to grow your business. Focus your time, energy and money on the people and your business will respond favorably.
It can be difficult but the key here is to change points of view from output to in-put. At the end of the day, focus on the people. Empower and trust your employees. Employers should harness the power of the employees and give them a defined vision. To learn more about steps your company can take to creating a vision click here to read our article, Four Steps to Drive and Measure Success for Textile Rentals. Employees respond to and respect a vision and will deliver results yielding success for the entire organization.
i ”Leading on the Edge of Chaos”, Emmett C. Murphy & Mark A. Murphy
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