Does company culture translate into customer loyalty?

Forbes recently released their list of 10 best retail companies to work for. The top rankings featured REI, IKEA, Costco, Nordstrom and J. Crew. All respondents noted “very satisfied” ratings and high CEO approval ratings via Glassdoor. These reviews were primarily based on the brick & mortar employees, but it’s also interesting to note how popular these brands are and potentially, how loyal their customers can be. Retailers have quickly noted that in a market quickly filling with thousands of eTailers and growing legacy chains, customer experience is the primary opportunity to create an identity and create a market. This challenge becomes more manageable with an army of loyal and friendly employees engaging with your customers.

Anyone in the retail world, or the world for that matter, has probably heard of the Zappos way of running a business. Customer experience is the only mantra that counts and if you don’t believe in it, you’re out. Zappos Founder and Chief Executive, Tony Hsieh, prides himself and his company on corporate culture that contributes to the best customer experience. As a result, Zappos has seen enormous growth and was picked up by Amazon (but kept its own company culture, don’t worry!). Zappos bases its corporate culture on a family atmosphere, cultural fit of employees, team trust, sharing and fun. Is this a format more retailers should be following?

In his latest book, The Culture Cycle, Prof. James L. Heskett noted that effective corporate culture can account for 20-30 percent of the differential in business performance when compared with “culturally unremarkable” competitors. Having employees, from the brick & mortar level up to corporate governance, who are dedicated to every single customer allows a better understanding of the primary markets and how to reach them. Not only can you utilize a company database of raw numbers and other structured data, you can gain insight via social media and actual face-to-face customer interaction. Innovative, right?

Great companies recognize what talent could potentially mean to their bottom line. They don’t hire randomly, but instead test the waters with their employees through probation periods and trainings. They look to find a common fit between both the employer and the employee, which builds loyalty and dedication to growth whether at the corporate headquarters developing a new strategy or as a manager in a small town mall. Cabela’s has dictated a similar business strategy through omnichannel opportunities and grassroots customer interaction. With every grand opening of a new brick & mortar store, they attracted 3-4,000 customers, new and returning. Spending a few hours engaging with individual customers and gathering data can easily translate into a significant and relatively easy profit.

It’s also important to understand the grave differences between corporate culture and brick & mortar employees. It’s not easy to be so disconnected and feel insignificant as a lower-level employee, but through employee development and recognition, a company can relight that fire. As a seasoned shopper, it’s easy to see how a great customer experience, either in-store or online, can translate into increase company loyalty. While I personally may look for the best deals when searching for a new camera or shoes, I am definitely more likely to shop with a company where I’ve had a positive experience. And, now, un-ironically, those companies, i.e. Zappos, Amazon, eBay, Urban Outfitters, and more, hold a focus on corporate culture and employee loyalty.

Do you agree that company culture and employee loyalty translates into customer loyalty? Or is the basic consumer instinct to find the best deals or easiest buy? Check out Loyalty World Canada and Big Data World Canada for further discussion on various loyalty marketing strategies and their impact on companies’ bottom lines.

Written by Caitlin O’Donnell for Loyalty World Canada and MM&T