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My approach to business is built on two very simple axioms. Thousands of books and countless research projects have explored the direct correlation between "satisfaction," "loyalty," and "profits," but in the end it all boils down to these two simple ideas:
1. Loyal customers and productive; loyal employees drive a company’s financial success.
2. That which gets measured one time improves; that which gets measured continuously improves exponentially.
How do loyal customers and employees drive a company’s financial success? Loyal employees enjoy their jobs and stay with the company. The longer an employee stays, the better they become at their job, the better they understand their products, and the better they will be at satisfying customer needs. As they stay loyal, turnover is reduced. As employee turnover is reduced, costs decline. The result: loyal employees, better served customers, lower costs.
Over time, satisfied customers generally become loyal customers. As they have consistently satisfying experiences, their trust and confidence increases. They keep coming back and they tell their friends to do so, too. Revenue per customer increases as they buy additional products and services. Acquisition costs decline and operating costs are reduced. The result: higher revenues, more referrals, lower costs.
So what better way to ensure loyalty than to measure it? When you know that your employees are loyal, they will help in making loyal customers, which in turn increases profits. Everyone is a winner in the end!
Richard D. Hanks
Salt Lake City, Utah
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