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The Customer Loyalty Code - And How to Crack it.

Factor 1. Leadership and Strategy

A couple of weeks ago I wrote about what I believe to be the Customer Loyalty Code. I suggested that it was –

Customer Loyalty Code

I then gave a short explanation of what it meant, but promised to provide more details in later papers. Well here is the first of those papers about the extra detail. The first factor is Leadership + Strategy so here’s an overview of what I had in mind when I included this.


Anyone who's studied the Ken Blanchard approach to what he describes as 'Situational Leadership' will know that he believes that a great leader is able to adapt his or her style to suit the needs of the situation. Well its the same here. The right leader will be one who is able to provide the style of leadership that is appropriate to the creation of a highly service focussed organisation. By that I mean a style of leadership that will bring out the best colleague and customer service behaviours in all people. There are many elements to this, more than there is space for in this paper, however here are a few of the key ones I've witnessed during my work with great service leaders and would therefore recommend.

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  • Personal characteristics

  • Approachable – Someone that people are comfortable around and have no fear of approaching with personal issues, business improvement ideas or problems.

  • Value Driven – Great leaders are driven by great values. Their behaviour is determined by what they believe to be noble human behaviours and the example they set inspires others to emulate them and their style of leadership.

  • Integrity – Integrity is a key to trust, which is vital in all relationships. No one will trust a person who is not honest, open and candid. A great leader is someone who says what they mean, means what they say and is true to their values.

  • Inspirational – Different people can be inspirational in different ways. Some are gregarious, others are less so. The style may vary, but a great leader will be able to inspire loyalty and the desire and motivation in people to achieve things they may not have believed possible. (In his book with the same title, Dr Stephen Covey called this 'The 8th Habit'.)

  • Consistent – People want in their leader a person with whom they 'know where they are and what to expect'. Not someone who regularly 'blows hot and cold' over the same issues. A consistent leader sets a steady direction which people are happy to follow. (more about this in Vision, below)

  • Business competencies

  • Vision – I'm a fan of the John Kotter approach to leadership. I've seen it working extremely well in many organisations. He believes the first job of a leader is to set the direction for an organisation or group of people. For it to make a worthwhile difference, that direction needs to be something that will stretch people, needing them to bring the best of their abilities, and be something that they believe is worthy of their efforts. That's a tall order, but a great leader will have the ability to create and elucidate such a Vision.

    I'm also a fan of Simon Sinek, and his thoughts about how important knowing 'why' we are doing what we do is to the success of any organisation. A great leader will therefore make the 'why', otherwise known as the 'purpose' of our work, clear and understood by everyone. This is much harder to to do than it might first appear. Anyone who's done it will know this. 'What' we do, and 'How' we do it, is quite easy to establish. But 'Why' we do it is much more difficult. It's all to easy to come up with something trite, like 'we save the world' or 'we improve humanity', but to create something that is relevant to the organisation and what it does, succinct, easily understood, uplifting and worthy of peoples efforts…….that takes time and skill.

  • Alignment – There's no point in creating a worthy vision and purpose if the leader is not then able to get everyone in the organisation, or at least the vast majority of people, aligned by a commitment to work together to make it happen. That requires a determination to make sure all people understand the purpose and vision, the reasons why they matter to the future of the organisation, and how everyone can make a worthwhile contribution to making that better future a reality.

    This is never done from behind a desk. Nor is it done by e-mails, intranet posts or internal marketing posters. It can only be done by regularly getting out amongst people and discussing it with them. Allowing them to question the wisdom, and being able to convince them of its virtue.

  • Execution – John Kotter calls the next stage Inspiration and Motivation, but I think its better explained as Execution. You could call it making the dream come true. The key is to be prepared to do whatever it takes to make the necessary things happen for success, even if they hurt in the short term. That will require Inspiration and Motivation, but in my experience it needs a lot more besides.

    It also needs the necessary resources being available, systems and processes being revised or scrapped if necessary to support the vision, work force education to develop the new knowledge and skills they will need, constant monitoring of the results to ensure they stay on track, and the stamina to stick at it and see it through.

Not every leader will be great at all these; different people always have different strengths; however, a great service leader is likely to be good at most of them, and will find people to work along side who have the necessary strengths in their areas of weakness.


For customer service to make a worthwhile difference to business performance and results it cannot be considered as something that is ‘nice to have’. It must become a core part of the strategy for success. Service Excellence is one of those topics, like Safety, Efficiency, Quality, etc., that few in any organisation will challenge as not being a good focus of everyone’s efforts. So if it becomes a part of core strategy, people throughout the organisation are likely to view it as sensible.

But how do you make it clear to everyone that it really matters, and then keep it at the forefront of their minds and a driver for their day to day decisions and behaviours? Here again there is more to this than there is space for in this paper, but the following are a few things I’ve seen work well in many organisations.

  • Theme and Logo – Almost all of the successful programmes I’ve worked on have had a theme or title, and a logo of some type, to give easy long term recognition. Example themes include Caring Counts, First Choice, Service Excellence and Becoming the Best. It obviously has to be something that is appropriate to your situation, the people you employ and the type of organisation you are, but I have found that choosing the right one will help execution.

  • Subject for Meetings – One way to make sure people know how important something is, and to keep fresh, is to make it a topic of or a key part of regular business meetings. That’s easy to do if you have a good and trusted source of regular feedback from colleagues and customers. Meetings can then focus on what they are telling us, what we plan to do about it and what has resulted from what we have done in the past.

  • Training and Benchmarking – People can always improve their skills. So on-going training on the key elements of service excellence, customer experience management and customer loyalty building will keep it fresh in peoples’ minds and up to date with the latest trends and techniques. It also helps to keep an eye on what others are doing. You obviously need to know what competitors are up to, but I don’t think there’s much point in copying them. That will not create differentiation. It’s better to look wider and see what the best organisations in different sectors are doing and consider how you might do the same.

  • Measurement and Feedback – It’s hard to manage something that isn’t measured. It’s therefore important to have in place a variety of channels to measure the impact of what is being done. Most organisation have the occasional customer satisfaction survey. Maybe once or twice a year. That’s useful but its far from enough. What is needed is feedback that is event driven (meaning that critical customer or colleague events trigger the feedback) and real time (meaning that is is measured immediately after the event).

    But there no point in doing this if the information that is gathered isn’t made good, timely use of. Ideally it will be analysed as it is gathered and sent to the people that have the closest influence on what is being measured, so they can take any appropriate actions from what they learn. That then provides a continuous pulse of what colleagues and customers think, it enables you to act on it immediately, and then to monitor the effect of what you have done.

  • Recognition and Rewards – People know that the things that matter most in any organisation are the ones that leaders spend most of their time on and give most of their attention to, and/or those that are linked to recognition and worthwhile rewards.

    Recognition can range from a simple ‘thank you’ for individuals or teams that have made a positive difference for a colleague or customer, to formal internal awards schemes. The best organisations have a variety of systems in place to recognise the right behaviours. Keep in mind that its just as important to recognise the behaviours that will lead to good outcomes as it is to recognise the actual outcomes.

    Rewards can also help, but they need not always be the usual financial ones. In fact research has shown that excessive financial rewards are counter-productive and do not create the desired outcomes. So instead of financial rewards they could be opportunities for valued training, interesting project work, additional responsibility, promotion, etc.

    But worthwhile financial rewards can of course, be much valued. It all depends on what your colleagues will value most. Here again, having a variety of reward options is important. Keep in mind that the more personal the rewards are to the recipient, the more impact they will have and the more they will be valued.

The overview of this is that for people to recognise that something is part of core strategy it’s not enough to write about it in the corporate strategy documents and mention it once in a while at company meetings. For sustainable success, it needs to become something which is a constant theme, pervading everything throughout the organisation.


I believe that leadership and strategy are the foundation on which a loyalty building customer experience programme is built. That’s why I made them the two elements of the first factor in The Customer Loyalty Code. I hope this short paper helps, and provides a few useful ideas to get this in place in any organisation.

In my next paper about The Customer Loyalty Code, I will write about the second factor, which is People and Culture.

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