No discussion about resources would be complete without talking about the two most important resources every business has—its employees and its customers.
There is no status quo in business
You already know the business climate is very dynamic. You’re dealing everything at a faster speed than ever before. From inflation and increased interest rates to ongoing supply chain issues, artificial intelligence, people working from home, and international instability. There are many challenges in managing and growing any business. As you’re aware, your business is about your employees serving your customers and making a profit.
Your mission
Your mission, if you choose to accept it, is to improve your relationships and interactions with both your employees and your customers—to help everyone navigate their way through these interesting times. There will always be factors affecting our internal and external environments. The stronger our connections to our employees and customers, the better our ability to handle the challenges and focus on the opportunities.
Employee engagement
Let’s start with your employees and how to improve engagement. But first a short story.
My first real job a few short decades ago was in a bank. One day I asked my manager, Peter, a question. He looked up at me with some exasperation, slowly got out of his chair, and said, “come with me.” I followed him over to a row of filing cabinets that were covered with a dozen thick binders. “Here,” he said pointing to the binders of standard operating procedures, “are the answers to all your questions.” He helped me find the relevant binder and look up my question.
AI to the rescue?
Fortunately, things have improved in the decades since that experience. Instead of binders, everyone has computers . . . in their pockets. Computers not only have immediate access to answers, but they can also, and do, enhance communication and collaboration among employees and customers. Artificial Intelligence (AI), although barely a year old in its most public formats of ChatGPT, Bard, and others, can also be a tool to increase employee engagement. For example, I use AI every day to increase speed, improve quality, and enhance creativity. Your employees can be relieved of boring or repetitive analysis, and get a helping hand to be more creative, all of which increase engagement. Giving people immediate access to technology can make them smarter and more productive but won’t necessarily make them more engaged employees. The binders on the shelf may have held answers, but they didn’t teach me why the procedure was important or how it helped the customer.
What’s your business strategy and why is it important?
A critical factor to enhance employee engagement is to help the employees understand your business strategy and how your company helps its customers. This applies to both business-to-business or business-to-consumer companies. Many executives spend a significant portion of their time in developing and guiding the implementation of the company’s strategy.
To the executives, strategy might seem like moving the chess pieces on the board. But they’re not chess pieces, they are your people.
It’s up to you to engage with your employees’ hearts and minds. Help them to understand your business strategy, why you’ve made some decisions instead of others, what trade-offs exist, and what your priorities are for business success. If the employees don’t hear this from you, they’ll make up their own perceptions about why things are done. If their perception is wrong or negative, engagement, performance, customer satisfaction and profits will all suffer.
As a leader, it’s your number one job to share your vision and inspire your employees to help serve your customers. Until your employees are literally mocking you in the halls with your key message, you have not repeated it often enough. The more your employees hear from you, the more engaged they will be. Tell stories, share customer successes, make your employees the heroes so they have someone to look up to.
How well do your employees understand your business strategy? How do you know?
One of my favorite consulting questions is to ask employees and managers to explain the company’s strategy. If you do this, you’ll quickly learn how you can increase employee engagement.
Your ideal customers
Now let’s talk about your customers. When my family owned and operated Clear Lake Lodge, I learned that we needed the right customers that fit our unique building and desired group of customers. We wanted mature guests who were quiet, and we asked clarifying questions to qualify guests during their booking calls (yes, before the internet!). When I took a call, I knew the criteria and the questions to ask, to ensure all our guests had a good experience with us. Knowing the criteria and having a system of questions to follow increased my engagement and improved the quality of our guests.
Guests who stayed up late partying or got up early and made noise that woke up others were not welcome and were directed to other establishments better suited to their needs.
Let me ask you, who is your ideal customer? What value to you provide for them?
For B2B customers, how do you improve their performance and results? How do you help them innovate, increase speed, attract more customers, or reduce costs?
For B2C customers, how do you enhance their lives? How do you help them improve their health, finances, relationships, or lifestyle?
Helping your employees to understand your ideal customer and how you help them will increase the employee’s skills and abilities to attract the right customer and service them. The systems and training will improve employee engagement because you’re supporting them to be successful.
The more clearly you can focus on who your ideal customer is and how you help them, the easier it will be to attract them and provide value to them. This ties back to the earlier point of ensuring your employees understand why and how they make your customers’ lives better. Knowledge increases engagement and fit with your strategy.
Retention
The final point I want to make is relevant for both your employees and your customers: retention.
The cost of replacing a performing and valuable employee who leaves is very high, often two or three times their annual salary. Tactics for increasing employee retention include values and goals alignment, recognition programs, and professional development opportunities. Being flexible in hours in and out of office, and even considering a four-day work week can be very effective in increasing employee engagement.
Happy employees can create happy customers. Let’s talk about your customers. Good customers make life easy and fun. They think the same about us: good suppliers or partners make business better. That’s why we want to keep our good customers.
The cost of replacing a good customer is huge as it costs much more to attract a new customer than to retain an existing one and it takes time to build trust and increase sales. Tactics to increase customer retention include customized experiences, proactive value delivery, loyalty programs, and responsive customer service.
Key questions to consider or implement
• What are your strategies to retain your best employees and customers?
• How much are you spending to do so?
• How do you know which employees and customers are at risk of leaving?
• How are you proactively communicating with your employees and customers to understand their needs and how you can help them in the future?
Although we can’t control the external business environment, we can influence and improve our relationships with our employees and our customers who are both critical to our business. Our business strategy needs to focus on both employees and customers.
If your best employee or customer told you they were leaving, what would you do to retain them? What would you be willing to do to have prevented this situation? That opportunity is now yours.
Full speed ahead.
