Chain reaction


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My key message is that long-term customer loyalty depends on trust.


customer service is the sum of many, many small things done consistently well. Secondly, an emotional rather than a functional bond is at the heart of building lifelong participation with a biz throughout the long journey to become a truly sustainable company”. This got me thinking, however, not about customer


loyalty, but about employee loyalty and engagement. The retail industry in the UK employs c2.77 million


people, the largest private sector employer. However, retail suffers from one of the highest rates of staff turnover of any sector – a phenomenal 40% per year on average. According to research by Oxford Economics, the total cost of replacing a member of retail staff – taking into account advertising, interviewing, administration and c23 weeks lead-time to optimum productivity - is c£20,114 per employee. With such high staff turnover, that extrapolates to an overall cost to the sector of c£673 million per year. Evidence shows that businesses that communicate


their values and expectations with their staff perform better than those that don’t. Echoing Mike’s point about loyal customers having an emotional bond, the Great Place to Work report explains that when employees feel an emotional involvement in a business, there is greater commitment to their employer, resulting in lower staff turnover. Clearly, considering the findings of the Oxford


the expectations set at the outset, and at subsequent visits. Of course, herein lies the challenge for multiple retailers; customers move around. When customers visit different stores and interact with different staff, there is the risk that their anticipated experience could be impacted by inconsistencies in the way each store engages with them. A bad experience could lose the business a customer; as they say, a rotten apple spoils the cart… Browsing linkedin the other day I was heartened to


see that the same thinking was backed up by Mike Barry, Director of Sustainable Business (Plan A) at Marks and Spencer. His post resonated with me – to quote him: “great


Economics research, reducing staff turnover by just a few percent could save UK high street multiples millions of pounds per year – desirable at a time when margins are under incredible pressure thanks to factors including business rates and minimum wage rises, exchange rates, low consumer confidence, and declining footfall. However, it’s not just staff turnover that’s costing


retailers money. Further research illustrates that employees lack of engagement with their employer’s brand values costs UK retailers a further £628 million a year. In a survey of 2000 retail employees, 77% admitted to not engaging with their company’s brand values, and 63% said they’d never had training about the values. Perhaps head office and management believe that they are communicating effectively with staff.


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