Applying Consumer Marketing Best Practices to Employee Loyalty

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1 ed Bendaña, Executive Dir by Fr and Motivation MOTIVATION SOLUTIONS WHITE PAPER LOYALTY & MOTIVA APER April 2011 TION WHITE P Applying Consumer Marketing Best Practices to Employee Loyalty Maritz Motivation SolutionsMaritz Loyalty ector of Client Services, 2014 Maritz All rights reserved

2 Consumers are researching and buying products and services very differently today, which has led to a profound shift in thinking among marketers. HR professionals and the organizations they serve can apply these consumer marketing learnings to their employee loyalty and engagement strategies. For years, marketers have used the analogy of moving through a funnel to describe the process by which consumers decide what to buy. At the top of the funnel, consumers begin with an awareness of many potential brands. As they move down the funnel, consumers evaluate these options and narrow their choices until, at the bottom of the funnel, they decide to purchase a single product or service. This traditional funnel model was challenged in a June 2009 article in McKinsey Quarterly, in which David Court introduced a more evolved and dynamic decision-making process called the Consumer Decision Journey (Exhibit 1). The journey consists of four phases in which consumers: 1. Consider, 2. Evaluate, 3. Buy, and ultimately 4. Enjoy, Advocate and Bond, with their preferred brands. The genius in this revised perspective, particularly for brands that effectively execute the final stage, is that when the bond with the brand is cemented, consumers enter an Enjoy- Advocate-Buy loop that skips the competitive waters within the Consider and Evaluate stages. As a result, the cycle of consumer loyalty is accelerated and grows over the long term. Exhibit 1: CDJ: Consumer Decision Journey CONSIDER EVALUATE BOND Loyalty Loop AVOCATE ENJOY BUY 2014 Maritz All rights reserved 2

3 A New Framework for Employee Loyalty Now, envision the Consumer Decision Journey in the context of the corporate imperative to build employee loyalty through engagement. Organizations of all sizes have long recognized the benefits of a loyal and engaged workforce: increased performance, desired retention, job satisfaction, and an enhanced consumer experience, to name a few. What organizations often overlook is the importance of an ongoing process guiding your most highly engaged employees down a defined path that leads to an Enjoy-Advocate-Bond-Grow loop that facilitates long-term growth for both the individual and ultimately the wider organization. Using the Consumer Decision Journey as a framework, HR practitioners can create a similar Employee Loyalty Path (Exhibit 2). Exhibit 2: ELP: Employee Loyalty Path CONSIDER APPLY GROW/ DEVELOP Loyalty Loop BOND AVOCATE ENJOY ACCEPT/ ON BOARD Each milestone along the Employee Loyalty Path provides employers with loyalty and engagement opportunities, particularly the critical Enjoy, Advocate, Bond and Grow stages. Consider The path begins with a potential candidate s top-of-mind consideration set for possible employers that he has culled from his own research, suggestions from friends and family, or other motivators such as job availability, skill-set match, and employer reputation. He will add new options and remove others as he becomes further educated about the opportunity landscape. In this pre-relationship phase, employers have an opportunity to showcase their employee-focused culture through recruitment efforts, advertising, Best Places to Work promotion, etc. To this end, a 2011 Maritz Poll showed that 40 percent of employees were influenced by their company s brand image or reputation for choosing it as a place to work. Subsequently, these employees were significantly more engaged in every important aspect of their jobs, including their willingness to advocate the company as a place to work for others. Apply The precarious application phase is next. We ve all been here and can quickly recall the uncertainty and occasional frustration associated with this process. For many organizations, the application phase becomes a missed opportunity because it lacks the human connection. How many of us have submitted an application or initiated other contact without ever hearing back from the organization to which we expressed interest? Yet even an automated 2014 Maritz All rights reserved 3

4 response thanking candidates for their interest and providing the expectation for further correspondence could go a long way toward communicating a company culture that considers job seekers like employees to be first and foremost, people. Accept/Onboard When a match between employer and employee does take place, the acceptance and on boarding phase presents an opportunity to set the stage for ongoing engagement and interaction. At a minimum, consider a congratulatory welcome message from company leadership. During initial meetings with a supervisor, introduce the new employee to the brand culture and key internal initiatives like recognition programs that help build and reinforce the culture. Because people are different and perceive the act of being recognized in different ways, this is an excellent time to ask the new team member how they prefer to be recognized. A large entertainment organization based in Nashville has taken this extra step and requests recognition preferences as part of the employee onboarding and documentation packet. This organization also provides supervisors with talking points and/or scripting to help initiate these important discussions with new hires. Enjoy/Advocate/Bond After onboarding, the opportunity for a deeper connection with the new team member truly presents itself. A highly effective approach that facilitates employee satisfaction, internal brand advocacy and employer/employee bonding is the use of both informal and formal recognition solutions delivered directly by a team member s direct supervisor and among her peers. Paul Lawrence and Nitin Nohria of Harvard Business School proposed in Driven: How Human Nature Shapes our Choices (2002, Jossey-Bass) that human beings are innately motivated by four biological drives: the drive to acquire status and things; the drive to defend the things we acquire; the drive to bond both cooperatively and meaningfully with others; and the drive to create and contribute to our family, company and community. This four-drive model provides a powerful framework for designing effective employee recognition programs. For example, a multinational, full-service hospitality brand recently deployed a major recognition initiative for their 20,000+ team members based on four-drive thinking. To address the drive to acquire, team members have the opportunity to choose from a selection of non-monetary rewards as part of their being recognized. Their respective general managers are also rewarded for championing the new program. A fair and equitable earnings structure that enables everyone to participate addresses the drive to defend. The act of recognizing a co-worker increases the meaning and significance of the recipient s bond to the organization. People place a high value on knowing that their work makes a difference and is appreciated. Further, recognition helps build the social fabric of organizations which, at their heart, are social systems that rely on successful interaction to prosper. The drives to bond and create are further reinforced through a brand newsletter that frequently spotlights properties and team members who have gone above and beyond. People are associated with accomplishments and achievement is validated as a social norm or simply, the way we do things here. In line with the Employee Loyalty Path model, team members at the spotlighted properties serve as brand and program advocates who campaign on behalf of the program. To further reinforce the drive to create and to define the meaning of a culture of recognition, brand leadership publishes a blog that advocates for recognition as a natural outcome of team collaboration and personal accomplishment Maritz All rights reserved 4

5 One of the keys to bonding is the congruency between an employee s values and their company s values. Just as consumers choose products that represent an extension of who they are, employees choose companies based on their identification with their employer. Unfortunately, this value congruency happens all too rarely. The 2011 Maritz Poll shows that only 14 percent believe their personal values are completely consistent with the values of their company. When personal values and company values are indeed aligned, the employee is five times more likely to remain long term and recommend his or her employer to others as a place to work. Grow/Develop While disengaged employees often remain complacently hunkered down within an organization, top performers such as the brand advocates described previously are increasingly planning to leave as the economy improves and employment opportunities expand. According to the Corporate Leadership Council, 25 percent of top performers indicate an intention to leave in the near future. Maritz studies consistently show that providing growth and development opportunities is one of the top predictors of employee engagement. Similarly, lack of growth opportunities is one of the primary reasons people leave companies. To keep these top performers moving forward on the Employee Loyalty Path, managers must continuously and candidly engage them in discussions related to their growth and development. Such a management approach is especially important to mitigating the high-turnover typical of the hospitality and retail industries. By facilitating a dialogue, managers ensure that the earlier bond remains strong and top performers are positioned for the next opportunity within their team or elsewhere in the organization. In doing so, external opportunity consideration may be reduced, and future leaders enter an Enjoy-Advocate-Bond-Grow loop that solidifies long-term employee loyalty and team/organizational vitality. A common misconception is that growth and development must always be accompanied by promotions. Managers should find ways to develop employees without having to promote them. This may mean allowing them to learn new skills, attend conferences, mentor new employees, or take on new job responsibilities. Conclusions Employee loyalty should be thought of as a parallel counterpart to consumer loyalty. Just as companies develop distinct brand propositions and segmentation strategies to attract consumers, it is important to think similarly when attracting, retaining, and motivating talent. This is particularly true for today s workforce, since long-term loyalty appears to be a thing of the past. Yet nearly one-in-five (19 percent) strongly agreed in the 2011 Maritz Poll that they would be happy to spend the rest of their career with their current company. Given the high tangible and intangible costs of employee turnover, long-term employee loyalty is as critical as long-term consumer loyalty. REfERENCES Court, D., Elzinga, D., Mulder, S., Vetvik, O.J., (2009). The consumer decision journey. McKinsey Quarterly, retrieved from mckinseyquarterly.com/ The_consumer_decision_ journey_2373. Lawrence, P.R. & Nohria, N. (2002). Driven: How human nature shapes our choice. New York: John Wiley & Sons, Inc. Maritz Research (2011). Maritz poll. For more information, please visit Maritz at or call (877) 4 MARITZ Maritz All rights reserved 5