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Article : Sluggish Economy? Use It to Your Advantage

Employee Development Cultivates Customer Loyalty and Better Positions Companies for Rebound

By Sharon Daniels, AchieveGlobal CEO

With the U.S. economy growing at just 1 percent in the first quarter of the year, it’s no surprise that businesses are looking for places to trim expenses as economies around the world brace for turbulence. Travel, client dinners, perks and supplies are all examples of expenses that have recently seen the chopping block.

In this unstable environment, training is another area where cost-conscious companies may be looking to cut expenses. But in an economic downturn, the savvy business will see employee development as a meaty part of its operations, not fat that can be sheared away. In fact, a steady diet based on a solid curriculum not only can bolster companies during slowdowns but also can make them stronger when the economy recovers.

Firms that train existing talent will create a workforce that is better educated right now and will be more poised than competing peers when the recovery comes.

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For instance, when budgets are tight, consumers watch expenses just like businesses. If consumers are unhappy with the service or product they receive, they’ll spend their dollars elsewhere. That behavior is ingrained into a society cultivated to expect nothing but the best from a service-oriented culture, whether you’re being served fast food or consultation from a professional services firm. Losing a customer can be expensive. It can cost a company an average five times as much as to retain a current customer compared to winning a new one, according to one estimate.

That’s where training can come to the rescue. In the near term, a well-coached employee can excel at customer service at a time when competitors are dumping such development.

It’s imperative that businesses train their front-line workforce to deliver customer service; after all, customers want caring attention that delivers on a promise. Courteous service coupled with respectful acknowledgements of problems win points with customers. Businesses that teach these behaviors will be rewarded during an economic downturn, when sales won and sales lost are magnified.

More than 90 of 101 senior decision-makers at U.S. companies with at least $500 million in annual revenues said a recession will impact their company one way or another, according to a recent survey by Boston Consulting Group.

“In a recession, everyone feels short-term pain. But companies that successfully approach a recession as an opportunity have the potential to realize long-term gain,” said Hal Sirkin of BCG's Operations practice, which spearheaded the research.

Employee performance improvement is one of those long-term gains. During the recession that followed 9/11, Southwest Airlines, Dell Computer and Viacom were among the companies that kept their training programs intact.  In some cases, they increased budgets, made workforce development sessions places of inspiration and targeted training toward specific skills.

Why? Because in times of organizational uncertainty, customer service training boosts morale and commitment by showing employees they are a valued and important resource. The training itself provides skills and enthusiasm to help participants provide amazing customer service. Great customer experiences lead to brand loyalty. Skills training that equips employees with the tools to increase customer loyalty in not overhead, a cost or a frill.

Surveys indicate that senior manager support training as a way to pull higher performance from a workforce and senior management support is critical to the success of a training program. Executives expecting their employees to be committed to delivering top-notch service must show the same commitment themselves as well. If dedication is visible on all levels, employees become more engaged and begin to focus on firms with sophisticated training platforms as employers of choice. And in a competitive environment, training can be the determining factor in retaining or attracting talent.

Downturns and recession have a way of enacting a Darwin-like atmosphere on businesses, weeding out the weak. The antidote is a good shot of strategic training, which can elevate an entire workforce on the business food chain, transforming them from gazelles into lions.

About Miller Heiman Group:
Company LogoWe provide comprehensive Customer Experience training to call centers, tech support, and field support.
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Today's Tip of the Day - Loyalty Versus Satisfaction

Read today's tip or listen to it on podcast.

Published: Friday, August 22, 2008

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