It goes back to business schools. I had a friend in the early 80s who expressed his unhappiness that to continue in his then area of choice he needed to find a plant and close it to demonstrate toughness. He needed to sacrifice the careers and lives of hundreds of employees to have a resume item. He noted that probably more than 75% of plant closings at that time in the 1980s were not justified – they were betrayals of worker loyalty for modest personal profit for the managers closing them at the expense of the corporate entity and the loyal employees.
It is no surprise that after about thirty years of this type of treatment, older workers tend to lack loyalty and younger workers (often their children) see loyalty as foolish. That is one of the gifts that elite MBA schools and management consultants have given modern America – an erosion of loyalty. That same experience has bled out into consumer relationships.
I can compare a small business I know with Volvo. When the UPS strike hit, in order to make his commitments to clients to make thirty day delivery turn-around, John paid for overnight express delivery and ate the loss. He was and is loyal to his customers and a man of integrity. Volvo, I bought a car from them (two actually). The paint was bad. They kept promising that they had fixed it when all they had done was buff and use colored wax that would hide the problem for 2-3 months. Finally, they offered to pay for half of the cost of repainting – if I used their provider. Of course they wanted me to pay about $2,500.00 for my half, up front, for a paint job that should have cost a total of less than $1,500.00 (same color, one color, no primer needed). I actually had the job done for $800.00 and it has lasted several years and is still excellent.
In other words, Volvo offered to make only a $1,600.00 profit at my expense for fixing their problem. Did that show or inculcate loyalty, honesty or trustworthiness? Obviously not at all. I’ll never buy a Volvo again and would advise anyone I know not to buy one.
Yet, there is a reason people are happier when they are loyal. Companies that are loyal have more satisfied and effective employees and better served customers. Now loyalty alone won’t do the job, but without loyalty in the mix, the job does not get done well.
As you might suspect, I’ve been enjoying
Why Loyalty Matters: The Groundbreaking Approach to Rediscovering Happiness, Meaning and Lasting Fulfillment in Your Life and Work by Timothy Keiningham, Lerzan Aksoy, and Luke Williams (Hardcover - Jul 7, 2009)
If you pick it up, it is easy to mistake it for a book length advertisement for a web 2.0 application. Of course access to the application is free with the book and only tangential to the book itself (in other words, it is an effort to provide “value added” material, not a cheesy attempt to get you to pay for a book length advertisement for a web app).
Once you get past the short aside for the web based service, what you get is an explanation of what loyalty is, why it is important, how to measure loyalty (rather than how to make superficial guesses like most “loyalty programs” do) and how to nurture and integrate loyalty with the other elements that lead to corporate and personal success, and that are essential for individual satisfaction and happiness.
The book is honest. For example, 80% of your loyal customers are ones you are losing money on and will never turn a profit on (which is one of the reasons they are loyal).
However, it is important to realize that your life will be more satisfying and you will be happier if you have areas where you can be loyal. Understanding loyalty is a significant point in finding happiness in your life.
I’ll write more on the book and on loyalty, but it is a worthwhile read.