A good test of customer loyalty is asking, “How likely are you to refer this product or service to a friend?” All prudent home builders want a favorable response to that question, but they can probably predict the answer by looking at their own company cultures.

Providing an exceptional customer experience should be the goal of every home builder, but that’s only possible if the builder already has an environment of employee loyalty. It is foolish to believe that employees will meet and exceed customer expectations if their company is unable or unwilling to meet and exceed employee expectations. Employee advocacy and customer loyalty are interdependent.

Today’s leading companies create outstanding environments for their employees and subsequently reap the benefits as those employees create outstanding experiences for customers. It is with that objective in mind that Starbucks employs “partners” instead of employees and WestJet Airlines has “owners” instead of staff.

Employee Loyalty Research

Studies have proven that a company’s employee loyalty metrics provide a reasonable surrogate for their customer loyalty performance. This then begs the question, “How would employees answer loyalty-based queries?” What answer would employees give if asked, “How likely are you to recommend your company’s product or service to a friend?” This could be further explored by asking, “How likely are you to recommend a job at your company to a friend?”

Sadly, a 2010 study conducted by Forrester Research revealed that only 27 percent of employees surveyed were “promoters” for their company. Worse, customer service employees were among the greatest “net detractors.” Fortunately, North American employees responded somewhat more positively than their European counterparts, and Canadian employees had the most positive results in the study.

Most successful companies are well aware that it takes delighted employees to create delighted customers. In fact, the No. 1 influencer of customer relations is employee relations. That in turn makes “people” the only sustainable economic advantage for a company today. Engaged, empowered, and delighted employees spread their passion to co-workers and customers. It then stands to reason that high morale and outstanding performance emphatically go together. As a result, an organizational culture developed around passionate and caring employees has a strong foundation for creating memorable customer experiences.

Leadership’s Role

Employee advocacy starts with passionate leaders, who are ultimately responsible for the culture of an organization. Leaders will get the behaviors that they exhibit, as well as the behaviors that they tolerate. Today’s most successful companies are led by communicators, not commanders — coaches, not cops. These visionary leaders both demand and inspire people to give their best.

To that end, companies should select and retain only employees that are customer-centric. The wise motto of Southwest Airlines is to “select for attitude and train for skill.” It is the interaction between employees and customers that creates the “value zone” of every company, and disloyal or disenchanted employees quickly become a company’s biggest liability. In the end, it is a company’s ability to attract, motivate, and retain qualified people that will be the single best predictor of overall excellence.

Internal Customer Culture

Indeed, home builders must recognize that internal customers are as important as external customers. Internal processes should be viewed in a “supplier-customer” framework with the same importance as external processes. The focus of employees should be to exceed the expectations of internal customers in the same manner as the external ones. As this attitude takes hold, an organization will grow organically from being a system of processes and tasks to becoming an entity of genuine caring, passion, and success. In home building, trades and suppliers are an extension of staff, so builders must be vigilant about who is selected to associate with their brand.

It has been said that companies such as Starbucks recruit people who demonstrate “litter-picker-upper” personalities, as these people typically possess qualities of caring. Such qualities are crucial attributes for any business, but especially for a home builder, where both emotional and financial stakes run high for customers. In their book, Managing the Customer Experience, Shaun Smith and Joe Wheeler argue that delivering a branded customer experience involves using one’s head, heart and hands.  No where is this more true than in home building, where employees must use their head to know what customers expect, their heart to care about every customer encounter, and their hands to deliver an outstanding customer experience based on the skills and empowerment they possess.

Advocacy Unleashed

Employees are the public face of a company and human resources are an asset to be enhanced, not a cost to be controlled. Gallop Poll and Forum Market Research studies have found that the No. 1 attribute that drives customer loyalty is “people.” People set the culture within a company, and their impact on employee and customer satisfaction is undeniable. In fact, Richard Forsyth, founder of CRM Forum, reports that 66 percent of customer loss is derived from a failure in customer service. Undoubtedly, much of that loss could be stemmed if companies engaged in more employee advocacy. It has never been more essential to understand that a company’s employees are the face and reputation of the business.

Tim Bailey is general manager of AVID Canada, the leading provider of customer loyalty research and consulting to the home-building industry. Through the AVID system, home builders improve referrals, reduce warranty costs, and strengthen their brands. He can be reached at tim.bailey@avidglobal.ca.