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Can loyalty be demanded?

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Is loyalty a virtue or a value or just an emotional state of the mind/heart or is there a rationale behind it?

Loyalty can largely be driven by the emotional connection between two parties – the producer & the consumer, the employer & employee, leader & followers. However many use Rewards (Carrot & Stick) to drive loyalty. Emotional loyalty, when achieved, has an enormous value and cannot be induced by force or incentives.

I worked in an Indo-Japanese two-wheeler company way back in the ’80s. It owned a roaring brand. The company was in a remote place far away from the nearest city and the company provided to and fro transport only for its senior executives, but most employees had to fend for themselves. The public transport was not very effective and many employees used to travel on their own and mostly on two-wheelers.

One day the Head of HR observed that in the vehicle parking area, there were many two-wheelers of competitors parked. For a moment he was livid. “How can we permit our competitor’s two-wheelers to be parked here”, he fumed.

He then literally stirred the hornet’s nest within the HR Department and called for a meeting where he raised the question “should we allow our employees to bring and park a competitor’s motorcycles?” There was a lot heated debate. Finally, sense prevailed and he did not persist with his demand for not allowing competitors motorcycles being used by employees or parked within the premises.

However, he did carry a grudge against these employees and silently would feel “how dare these employees who are supporting competitors to work for us?”

In another example, I worked for a Multinational Oil company. They were into retailing LPG Gas to consumers. At that time there was a huge price differential between what the Private LPG Gas companies sold vs the Government-run Oil Companies because the Government-run Oil Companies used to enjoy Government Subsidies and the Private Oil Companies did not enjoy the same benefit.

The Company naturally struggled to sell to domestic consumers and was posting losses on its books of account. The CEO raised the issue of whether employees should buy the company’s LPG Cylinder for their domestic use or buy the cheaper Government LPG Cylinders. Again there was a heated debate and again finally sense prevailed and he did not persist with his demand. However, he continued to ask employees what cylinder they were using and this was a cause for endless embarrassment for the employees as none wanted to fork out an additional 300-500 rupees per cylinder.

Recently, Binny Bansal, Founder & CEO, speaking at an accelerator program in Bengaluru said, “My wife is a BigBasket customer,” Bansal said, breaking into laughter at the SAP Startup Social event in Bengaluru. “And I’m trying to convince her to buy groceries from Flipkart.”

There is an air of expectation from the Founder & CEO that his wife & family should buy the company’s products. Given his gregarious nature, he made light off it and even joked about it but many other Founders or CEOs would have felt very embarrassed and not want to talk about it in public.

In another curious instance, a relative of mine worked as the Head of Marketing of a very large brewery company. Surprisingly he was a teetotaller. He had a long & successful stint with the company and under a mercurial leader. I used to wonder how he could go about selling alcohol to others and promote them day in and day out when he refused to drink alcohol.

When you yourself, your own family, employees are not convinced about your product how can you influence others to buy is a burning ethical question.

It is human nature to seek fulfillment. However, money can change a person, even the most loyal of them, and seldom do they consider the virtual bridges they turn to ashes.

Rewards are good ways to buy customer loyalty but when it comes to establishing and maintaining long-term customer relationships, you need to do more than bait people. You have to give customers a reason to stick around. These efforts can be in many forms, but all of them are based on the rule: Loyalty is a culture, not a commodity, and it’s not something that cannot be bought; it must be earned. The emotional appeal, emotional connects and customer experience is what ultimately drives loyalty. That’s why customers queue up in droves to buy at McDonald’s or at Apple Stores.

Loyalty, of course, is reciprocal, and both the company & customers have a vested interest in promoting loyalty. That vested interest is hard to earn but extraordinarily valuable once it is achieved.

About the Author:

Ramesh Ranjan is the Founder & Editor of www.humanengineers.com, selected in the Top 100 HR websites in the world by Feedbspot. He is Business Consultant, Executive Coach, Professor, Content Manager & Editor.

In a career spanning over 3 decades, he has been Head of HR and held leadership positions in India & globally in organizations like Schneider Electric India, American Power Conversion (APC), Chevron Texaco/Caltex India, Praxair India, Co Systems India, Indian Herbs & ITI.

In his last role, he was the Vice President HR @ Schneider Electric India. Till recently he was the Content Management Partner for NASSCOM – IIMB – Leadership Resource Centre. He is a visiting Professor at XIME, WE School, NMIMS & Christ University.
He was the Vice President of NHRD Bangalore Chapter 2015-2017 and also the Honorary Secretary of the National HRD Network, Bangalore Chapter, member of the India HR Council of the AMCHAM, New Delhi, Member of the Roundtable of HR Directors of Petroleum Companies, and Member of the India HR Council of Conference Board.

 

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