What is Loyalty? According to the Oxford Dictionary- Loyalty is a strong feeling of support or allegiance. Many organizations today are struggling to keep their teams loyal and ultimately their customers loyal. A family creates loyalty for each other through the bonds, relationships and experiences that parents and children form throughout their years of growth, however, some families do not have that same support and allegiance because of members that are simply not loyal like a child who grows up without any consistent role of a father or a mother who shows no affection, love and compassion to her children. Loyalty is created through worthwhile experiences.
Here is an example of a CEO that creates loyalty in his organization.
In a cavernous meeting room behind the Silverton Casino Lodge a few miles south of the Las Vegas Strip, there’s a party in full bloom. More than 1,000 revelers, many with beers in hand, are dancing, cheering and clapping to a parody video of Katy Perry’s “California Gurls.” On screen, a woman in an electric blue wig is lip-synching while in the audience, snack-size bags of cotton candy are being batted around like beach balls. When hundreds of balloons drop from the ceiling, the place erupts with the communal energy of New Year’s Eve.
But this isn’t a concert, or a revival or a product unveiling. This is Zappos, the online footwear and clothing retailer, putting corporate value #3 of 10 (“Create fun and a little weirdness”) on full display at its quarterly all-hands meeting. And by “all-hand” they mean every one of their 1,000 plus employees at the Las Vegas headquarters. Yes, Zappos operates a 24/7 Call Center. No, there is no one on the phones taking orders or answering customers’ questions right now. Yes, that’s counterintuitive for a business that lives and dies on Customer Service. No, Zappos doesn’t follow the corporate herd. (That’s value #4: Be adventurous, creative and open-minded.”)
The business being conducted in this room is strengthening the company’s vibrant corporate culture, because it’s the spring from which employee happiness, and thus profits flows. As CEO Tony Hsieh, 37, put it in his 2010 book, Delivering Happiness: A Path to Profits, Passion, and Purpose, a company’s culture should be more than words on a wall plaque.
“At Zappos, our belief is that you get the culture right, most of the other stuff- like great customer service, or building a great long-term brand, or passionate employees and customers- will happen naturally on its own,” Hsieh writes.
Hsieh (pronounced “Shay”) learned the value of culture through trial and error. Today, the office culture is such an all encompassing pursuit at Zappos that business people come to Las Vegas from around the world to experience how they do it firsthand. Hsieh has spun off a new company- Zappos Insights- to accommodate them. Visitors choose their own level of immersion, from a free, hour long tour of the headquarters (about 80 people take it each day) to a two-day boot camp, happy hour included, for nearly (US $4,000.00).
Figures from the quarterly meeting state that Zappos’ sales grew 39% in the fourth quarter of 2010 over 2009. They passed the 1 billion mark in sales in 2008, and they were acquired by Amazon.com the next year in a deal worth 1.2 billion the day it closed.
Zappos recently signed a deal with the city of Las Vegas to take over the current City Hall in Downtown when the city moves out in 2012. The wheels are already turning in Hsieh’s head; he envisions seeding the moribund area with bands to build an Austin, Texas-like music scene, a private school for employees’ kids, a greenhouse where Zappos people can grow their own veggies and maybe even a dorm to encourage his people to live, work and play in the city’s struggling urban core.
Employees get free health, dental and vision coverage; financial and legal assistance; merchandise discounts; even free food in the cafeteria. (It’s common for newbies to gain weight when they start- there’s even a name for it- the Zappos 20). The company debuted at #23 on Fortune’s “100 Best Companies to Work For” list in 2009; it moved up to #6 in 2011.
The major insight from this example of a CEO who builds loyalty is that it starts at the top. An organization can have a great team that loves people, however, without the feeling of support and allegiance from the top –there will be no loyalty, turnover will be high both internally and externally and customers will be spreading negative experiences like a wildfire.
Five Tips on Building Loyalty in your Small, Medium or Large Business:
- Recruit and Hire People that Love People
- Ensure that top management is providing support and allegiance to the team and ultimately the customers
- Create values that your team can live by daily that provide happiness and growth
- Ensure the physical environment (physical appearance and atmosphere) permeates energy, synergy and fun
- Give your customers “what they ask for and more….”
Bonus Feature: One of the “and more” that Gerald’s (*a rethread tire shop) is most noted for is giving a rose to every female customer. It is laid on the seat of each car before pick-up, and it comes with a note that expresses special appreciation for the business. Gerald’s knows how intimidating service stations can be for people, and they are constantly striving to soften the rough edges. “Has this idea paid off?” You bet. This idea has engaged their customers and created a word-of-mouth campaign that no advertising budget could replace.
How can you be a Gerald’s today?