MANAGEMENT is efficiency in climbing the ladder of success; LEADERSHIP determines whether the ladder is leaning against the right wall - Stephen Covey

Friday, December 16, 2005

Loyalty Management

Did u know there is something called "Loyalty Management"? Well, if you didn't know, here's what it means - "Loyalty Management grows a business’s revenues and profits by improving retention among its customers, employees and investors." in Darrell Rigby's own words. Loyalty programs measure and track the loyalty of various groups, diagnose the root causes of defection among them, and develop ways not only to boost their allegiance but turn them into advocates for the company. He also mentions that Loyalty Management quantifiably links financial results to changes in retention rates, maintaining that even small shifts in retention can yield significant changes in company profit performance and growth.
Common uses, as identified by Darrell Rigby include:
a) Build lasting relationships with customers who contribute the most to profitability, and capture a larger share of their business;
b) Generate sales growth by increasing referrals from customers and employees;
c) Attract and retain employees whose skills, knowledge and relationships are essential to superior performance;
d) Improve productivity, and decrease recruitment and training costs;
e) Strategically align the interests and energies of employees, customers, suppliers and investors, in a self-reinforcing cycle;
f) Improve long-term financial performance and shareholder value.
WOW! Whadda concept!

5 Comments:

Blogger vkn said...

This is just great Sriram. The main issue that we have here is to tackle the increasing attrition rate. People are job-hopping everywhere even it is a 5% difference in their paychecks. You could find very few truly loyal people who stick on to one company for an agreed upon time frame, at least an year. Isn't it?

4:47 PM

 
Blogger Sriram said...

Hi Vkn,

Your so damn rite. Many people change jobs for reasons best known (mostly unknown!) to them. I dont believe in changing jobs for a mere increase in your paycheck. One must see the basic purpose by always asking the question "Where do you wanna be in 3/5 years' time?". During the initial years of your career, it's good to stick on with an employer for about 3-4 years to learn as much as possible and go up the learning curve. Then maybe after a cpl of years, you would be better off in judging yourself (hopefully!) and making wise-moves. But, many a times, I have heard lotsa people lament about their present jobs and I always tell them one thing that my ex-BOSS thought me...."If you cant live with it, you gotta get out of it"!

8:53 PM

 
Blogger Trevor Gay said...

Good post Sriram

Another way of putting it is that if you look after all the 'softer stuff' then the bottom line will look after itself.

I have always believed that what is traditionally called the 'soft stuff' is in fact the most important stuff - e.g. staff, customers, openness, honesty and an ethical framework.

Too many organisations and too many leaders and mangers concentrate only on the bottom line. That is my opinion is the wrong place to look. Of course the bottom line is crucial but not the most important thing.

Wouldn’t it be better to have a tombstone that reads – ‘he/she cared’ ... rather than ‘he/she always balanced the budget’?

6:41 PM

 
Blogger Sriram said...

Trevor,

I am WITH YOU on that one but sometimes SOFT is HARD! Many a times, people (ofcourse, not everyone) try to exploit ur niceness towards them and take an undue advantage of your goodness & ultimately "screw up" your well being...Well, thats the price we pay for being too nice?? I am an advocate for soft skills, smooth talking, being nice, warm, compassionate etc..but when the going gets tough, the tough just gets goin! There indeed has to be a fine line (maybe a thick one!)drawn between being aggressive & being harsh / rude but being too soft at all times doesnt take you too far...Do you agree? Pls lemme have your thoughts on my ideas....if I need course-correction, maybe u could lemme know...will try & work on it.

11:05 AM

 
Blogger Trevor Gay said...

Hi Sriram

An interesting discussion that is very close to my heart. Soft can definitely be hard. I worked in the NHS for 35 years and at various times in my career;

I was told I was too soft as a manager - I should be harder
I was told my heart ruled my head too often
I was told I did not have the ruthlessness needed to reach the top
I was told I was too close to the staff I managed
I was told I was too close to patients and their carers
I was told I was too easy going
I was told that I was idealistic
I was told I was too trusting of people.

I would probably agree with all those things said about me.

However with time to now reflect about that list I would rather be remembered for those 8 qualities then a list of the opposite qualities namely;

Too hard
Head always rules heart
Ruthless
Distant and removed from staff
Distant and removed from customers
Inflexible
Pessimistic
Non trusting of people

I will be happy to be remembered for the first list rather than the second list.

I have never accepted one has to be ruthless and hard to be successful. Just because one is concerned about other people; fairness; integrity; and the other ‘softer’ stuff does not mean one cannot be at the same time, decisive and consistent. I also think the qualities in the first list do not mean that you cannot be ‘tough when the going gets tough’.

I am happy to receive counter arguments on this Sriram. I will carry on being driven by the items on list one – it has stood me in good stead for my life so far. We all have strengths and preferred styles – mine happens to be more on the softer side. You are right there is always a risk that people will take advantage of good nature but I remain optimistic and trusting.

The greatest leader I have ever met is also the most humble and ‘soft’ person I have ever met. His concern is always for people.

5:57 PM

 

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