Driving Loyalty: Turning Every Customer and Employee into a Raving Fan for Your Brandby Kirk Kazanjian
Must-reading for every manager, entrepreneur, corporate executive, and anyone looking to increase customer satisfaction, boost employee engagement, and significantly enhance the bottom line.
In order to build a successful company today, you must create an unbreakable bond of loyalty between your customers and employees. Few have done this better than/b>
Must-reading for every manager, entrepreneur, corporate executive, and anyone looking to increase customer satisfaction, boost employee engagement, and significantly enhance the bottom line.
In order to build a successful company today, you must create an unbreakable bond of loyalty between your customers and employees. Few have done this better than Enterprise Holdings, owner of the Enterprise, National, and Alamo rental car brands.
While Enterprise has long been known for offering excellent customer service, it faced a huge challenge after buying National and Alamo in 2007. Among other things, it had to integrate different cultures, manage a varied workforce, and meet the needs of a much larger and highly divergent customer base.
In Driving Loyalty, you’ll get an inside look at how Enterprise began operating these three distinct brands in a way that ultimately led to rising profitability and some of the highest customer and employee satisfaction scores in the industry. You’ll also discover how other thriving companies—from JetBlue and Starbucks to Costco and even Chobani Yogurt—use similar techniques to outsmart the competition and turn customers and employees into raving fans.
Driving Loyalty provides a blueprint that businesses of all types can use to deliver exceptional customer service, create a high-performing work environment, build strong brands, instill loyalty, market effectively online and off, and, in turn, power overall performance.
In the pages of Driving Loyalty, you'll learn:
- Specific strategies for offering exceptional service that will help to increase sales and grow your business.
- Principles for developing engaged, high-performing teams
- Why the rules of brand building differ based on your target audience
- How to effectively leverage social media to better connect with your customers and employees
- Why forming strong partnerships can take your company--and your career--to the next level
- And much more
"Driving Loyalty provides an excellent roadmap for how to succeed in building your brand, motivating your team, and delighting your customers regardless of the underlying economy." -Matthew J. Slaughter, professor of management, Tuck School of Business at Dartmouth
"Enterprise is one of the truly great service companies. In Driving Loyalty, you’ll learn how its synthesis of outstanding leadership, unique management systems, and innovative marketing have led to fantastic success." -Frederick W. Smith, chairman, president and CEO, FedEx Corporation
- The Crown Publishing Group
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- Random House
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- 3 MB
Read an Excerpt
The world's greatest visionaries and entrepreneurs share several important traits. They are natural born leaders with big dreams and a bit of a rebellious edge. They are willing to take risks, without fear of failure. They are passionate about what they do. And, perhaps most of all, they think differently, approaching problems that others have failed to tackle in new or better ways.
Among the modern-day business executives at the top of this list are people such as Steve Jobs, Walt Disney, Bill Gates, Warren Buffett, Mark Zuckerberg, Charles Schwab, Jeff Bezos, Sam Walton, and Phil Knight. The list also includes a number of famous corporate pairings, such as Larry Page and Sergey Brin, Ben Cohen and Jerry Greenfield, and Jack and Andy Taylor.
If you've never heard of Jack Taylor or his son, Andy, before, you're certainly familiar with at least some of their businesses. Jack is the founder of Enterprise Holdings, parent company of Enterprise Rent-A-Car, Alamo Rent A Car, and National Car Rental. Andy has run the company and overseen its incredible growth for more than two decades. The Taylor family also owns a portfolio of other companies, all of which are built around a very simple philosophy: "Take care of your customers and employees first, and the profits will follow." While most businesses pay lip service to the importance of customer service, the entire Enterprise organization is structured around this goal.
Since 1957, Enterprise has operated under the premise that employees should be treated as owners--and paid as such--while being held fully accountable for consistently exceeding customer expectations. Every corporate decision and new initiative is enacted based on how it will improve the overall customer experience and make life easier for employees. This strategy has resulted in extremely high levels of customer and employee loyalty, along with an ongoing, profitable revenue stream. In fact, Jack's initial investment of $10,000 has blossomed into a company that is now worth billions of dollars.
TAKE CARE OF THE CUSTOMER
Jack Taylor's notion of how to operate a business was largely influenced by his midwestern upbringing. A member of the "Greatest Generation," Jack never liked school and admittedly wasn't the best student. He ultimately dropped out of college after less than two years to join the military following the attack on Pearl Harbor. Jack became an officer in World War II, serving as a navy pilot flying combat missions in a Grumman F6F Hellcat off the decks of the USS Essex and the USS Enterprise in the Pacific Theater.
Being in the military drove home the importance of teamwork. "The beauty of teamwork is its simplicity," Jack observes. "Everybody is in the right place, the leader points the way, and you all move together as one." This notion played a big role in how he shaped his company.
A lifelong entrepreneur, Jack started what ultimately became Enterprise Rent-A-Car on the lower level of a St. Louis Cadillac dealership, originally as a leasing business. Back then, few companies offered car leases, and Jack saw this as an opportunity with significant growth potential. Jack had previously enjoyed great success as a car salesman and knew the industry well. In his mind, leasing was an even better business than having your own car dealership, since at the time individuals could secure the rights to only one franchise location from a given manufacturer. With leasing, the opportunity for expansion was unlimited.
For the first couple of years, Jack had just one employee, his administrative assistant. But because of his commitment to taking care of customers, the business began to grow. The company, which was known as Enterprise Leasing back then, lost $30,000 its first year, broke even the second, and recorded a profit of $60,000 in year three. "It took ten years before we made our first million," Jack recalls. "But aside from year one, we have been a profitable entity ever since."
PUT A NEW SPIN ON A FAMILIAR INDUSTRY
By the early 1960s, the car rental industry was dominated by a few national brands, with offices located almost exclusively at the airports. It was virtually impossible for an upstart to get into the business, as the cost of going head-to-head with established players such as Hertz and Avis was too high. For that reason, Jack had no interest in competing in the traditional car rental industry, given that it was so cutthroat and crowded. Instead, he noticed that his leasing customers were increasingly interested in getting cars for just a day or two, to serve as loaners for out-of-town guests or replacements when their own vehicles were being serviced. Jack and his small team sensed opportunity and launched a rental car division in 1963.
Enterprise Rent-A-Car took a much different approach. Instead of operating at airports, Enterprise built a reputation as the home-city car rental company. It was the place you could turn to when your vehicle was in the shop, or when you didn't want to put miles on your own automobile for a short weekend trip. Given the demand in this untapped market, Enterprise quietly earned a leadership position in the neighborhood rental car segment. The company continued to grow in cities around the country largely under the radar of other competitors. Years later it began to establish a presence at some airports as well.
Jack recognized early on that when you have a commodity business, with many competitors offering essentially the same thing, unless you do something unique to differentiate yourself, customers will base their decision on whom to go with primarily on price, showing no loyalty to any particular brand. But if you are able to put a fresh twist on the otherwise ordinary, people are more likely to choose your product or service without even looking at the competition, because they know it will make for a better overall experience. This explains why companies such as Enterprise, FedEx, Starbucks, Costco, JetBlue, Amazon.com, and Chobani have all been so successful.
FedEx founder Fred Smith saw inefficiencies in the airfreight industry that caused shipments to take far longer to get delivered than he thought was necessary. This prompted Smith to research how to build a more efficient distribution system, work he started in a term paper as a Yale undergraduate in 1965. Armed with fourteen small aircraft at the Memphis airport, Smith began operating what was originally known as Federal Express on April 13, 1973. The company went up against traditional freight carriers, United Parcel Service, and the seemingly venerable United States Postal Service. Federal Express stood out by offering much faster service for those shipments that, as the company's ads used to say, absolutely, positively had to be there overnight. Such speedy service came at a higher cost, but to business customers, this premium was worth it. Plus, the notion of having the ability to track a package's progress and know for certain when a delivery would arrive won significant customer loyalty, allowing FedEx to become the first American start-up to reach $1 billion in revenues through organic growth.
Starbucks opened its first location in Seattle's Pike Place Market in 1971, but it wasn't until Howard Schultz joined the company more than a decade later that executives began to think about how to make this true commodity business stand out. While on a business trip to Milan, Schultz was impressed by the popularity of Italy's espresso bars and saw the potential to bring many of these same characteristics to the United States. He realized the right mix of beverages could create a sense of community, making a trip to Starbucks an experience rather than just a way to get a quick cup of java--something you could do at almost any restaurant. This mind-set earned Starbucks tremendous loyalty and allowed it to charge premium prices for otherwise ordinary beverages, fueling growth that now includes some seventeen thousand stores in forty-eight countries.
Sol Price changed the retail industry in 1976 by pioneering the discount membership warehouse club concept. Although retail stores were a dime a dozen, Price tweaked the business model to offer a relatively small selection of items that were sold in bulk at lower per-unit prices. He made the economics work by cutting overhead, offering no-frills service, and forcing customers to pay an annual fee for the privilege of shopping in the stores. The concept was an immediate hit. People loved the idea of getting bigger quantities for less, and their intense loyalty to the store was heightened by the fact that they had prepaid the cost of admission and felt they had better get their money's worth by frequenting it often. By 1992, there were ninety-four Price Clubs in the United States, Canada, and Mexico. Price Club merged with Costco in 1993, taking on the latter's name and creating an industry leader that continues to thrive.
Amazon.com founder Jeff Bezos saw the potential of tapping into the power of the Internet to bring efficiencies of scale to the largely commoditized business of selling books. While the largest brick-and-mortar bookstore was capable of carrying only around two hundred thousand titles, online you could stock every book imaginable. What's more, because the cost of operating in a virtual environment was significantly lower, Amazon was able to sell these books for much less than traditional retailers. The company also found a way to fulfill and deliver these orders fast. Amazon was a hit from its July 1995 launch, garnering significant publicity and loyal customers who enjoyed the added convenience and cheaper pricing for books, as well as CDs, videos, and related items. Amazon has continued to transform the retail industry, branching out into everything from electronics to footwear, forever changing the way people shop.
When JetBlue's first flight pushed back from Terminal 6 at New York's JFK Airport on February 11, 2000, bound for Fort Lauderdale, it was the culmination of a dream for founder David Neeleman. Like Jack and Andy Taylor, Neeleman is an entrepreneur who had been involved in numerous start-ups over the years, mostly in the travel industry. Neeleman learned a lot about the airline business during a short stint at Southwest Airlines. He knew that the only way for a new carrier to survive was by offering something very different in the marketplace. His answer was to create an airline that, as he put it, was dedicated to bringing "humanity" back to air travel. By taking good care of customers and crew members, the airline built a reputation for having great service, happy employees, and extremely loyal customers. On top of that, the in-flight experience was unlike any other, with TV screens behind each passenger seat, free snacks, and clean new planes. This approach helped JetBlue become the most successful airline start-up in a generation, and though Neeleman has since left to start yet another airline, JetBlue continues to thrive.
More recently, Hamdi Ulukaya built a $1 billion success by thinking differently in the fast-growing and supercompetitive yogurt industry. Back in 2004, Kraft Foods decided to get out of the yogurt business, leaving a plant in upstate New York idle. Ulukaya, who grew up in Turkey, had a wholesale feta-cheese-making business in Johnstown, New York, having learned the craft from his father. While sorting through his mail one night in 2005, Ulukaya spotted a postcard from a real estate agent advertising the vacant Kraft yogurt plant. He initially threw the card away with the rest of his junk mail, but later he started to think about the possibilities. He could buy the facility and use it to make Greek yogurt, a very common treat in his native Turkey but then barely a blip in the U.S. yogurt category. Ulukaya purchased the plant for $700,000 and began to make his vision a reality with the launch of Chobani Greek yogurt in 2007. Ulukaya says his success formula is pretty simple. He uses only natural ingredients, has built a strong online following, and has tapped into the overall trend toward healthy eating. Because the whey is strained off when making Greek yogurt, it is creamier, higher in protein, and lower in fat. But since it takes more milk to manufacture, it is much more expensive than regular yogurt. That higher price hasn't dissuaded consumers. Chobani now commands 57 percent of the U.S. Greek yogurt market and 19 percent of the total U.S. yogurt category. Chobani's loyal customers wouldn't even consider eating another brand. What's ironic is that Kraft subsequently got back into the Greek yogurt business after witnessing Chobani's success, only to end its Athenos line in 2012 after failing to gain traction.
Ten Ways to Stand Out from the Competition and Drive Customer Loyalty
1. Meet an overlooked customer need.
2. Serve a specific and uncrowded niche.
3. Be willing to take risks.
4. Position yourself as an expert in your industry.
5. Dedicate yourself to delivering excellent service.
6. Find ways to reinvent existing operating models.
7. Offer something your competitors don't.
8. Be humble and authentic, in order to truly connect with your customers and employees.
9. Always be on the lookout for potential opportunities.
10. Never rest on your laurels.
HAVE A UNIQUE PROPOSITION
Like the other companies mentioned above, Enterprise has long been doing business very differently than everyone else. Among its innovations was becoming the first rental car company to pick up customers and bring them to their waiting vehicle.
Enterprise has also expanded into several other auto-related businesses over the years, including fleet services (the old leasing division), retail used car sales, truck rentals, and hourly car sharing. The company even thinks differently about how it buys and manages its rental fleet. Rather than leasing cars from automakers, Enterprise has long purchased its cars outright, a practice now being mimicked by many of its competitors. This allows the company to gain a cost advantage that pays dividends all the way through to when the vehicle is ultimately put out on the resale market.
Jack, who today at age ninety looks a lot like a silver-haired Cary Grant, turned over day-to-day management to his son, Andy, back in 1990. Andy inherited many of Jack's traits and has continued the tradition of building the company to be different from the competition while earning incredible customer and employee loyalty. Like Jack, Andy believes in seizing opportunity when it strikes, and with Jack's support, Enterprise acquired Vanguard Holdings, parent company of Alamo Rent A Car and National Car Rental, when it went on the market in 2007. Since then, the company has instilled the lessons about driving loyalty that you are about to learn across all three brands, sending customer service scores significantly higher in just a few short years. In a moment we'll explore how the company has been able to do this. But first let's take a look at how one of the most successful acquisitions in corporate history came to be, and see why expanding your business to serve different target markets is a powerful way to drive loyalty.
Meet the Author
Kirk Kazanjian is a leading authority on the latest trends in marketing, branding, and delivering excellent customer service in today’s fast-changing and ultra-competitive world. He has written some two dozen books and is a top marketing executive for one of the world’s largest financial services companies.
A lifelong entrepreneur, Kazanjian is a popular speaker and former award-winning television news anchor and business reporter. He has appeared on a variety of media outlets, including CNBC, CNN, and Fox News Channel. His work has also been featured in such publications as Barron’s, Entrepreneur, Fortune, and USA Today.
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