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To Drive Customer Retention, Don't Neglect Culture

To Drive Customer Retention, Don't Neglect Culture

by David Ducharme and Nick Furman

Story Highlights

  • A strong organizational culture brings improved customer value
  • Gallup has worked with customer-facing teams to answer culture problems
  • Customer retention is possible with engaged teams and managers

Layoffs. Interest rates. Bank failures. “Year of efficiency.” More layoffs. As the impressive economic growth of the pandemic era right sizes, many leaders are responding by restructuring, cutting budgets and reducing head count. But this approach is flawed. Unless these responses are coupled with an intentional investment to build culture, they run the risk of crushing your people. And your people ultimately determine whether you deliver on the promises you make to your customers. If you want to drive customer retention and growth in hard economic times, don’t neglect your culture.

Neglecting culture affects your teams and your customers. Only 29% of employees strongly agree they’re proud of the quality of products or services their organization offers, and a meager 23% strongly agree their organization always delivers on the promises it makes to its customers. These perceptions are symptoms of culture problems -- and in a competitive market, leaders can’t afford to deliver mediocrity to clients.


The upside of nurturing culture is improved customer value. Employees who feel strongly connected to their company’s culture are 2.7 times as likely to strongly agree they feel responsibility for the quality of products or services and 4.9 times as likely to strongly agree they have the speed and agility to meet customer and marketplace change.

And from our work with clients, we know that a strong culture enables your people to engage customers. Fully engaged customers represent a 23% premium in share of wallet, profitability, revenue and relationship growth over the average customer.

So, what does an intentional culture investment look like? And what are some best practices to consider when investing in your culture? Gallup has worked with many organizations to answer these questions. Our process involves (1) defining the future state through a culture audit, (2) aligning key leaders, (3) driving adoption through talent investment in customer-facing teams and (4) embedding cultural pillars into existing processes.

Define the Future State Through a Culture Audit

When Gallup started work with a top-tier tech and media firm, nearly all employees cited their organization’s mission as being “customer-obsessed” -- yet only 21% of employees strongly agreed that the purpose of their company made them feel their job was important. Less than 30% strongly agreed their work goals were connected to the company’s overall goals.

A culture audit was Gallup’s first step in addressing these troubling numbers. We take a strengths-based approach to audits, honoring what’s already going well while identifying gaps where aspirations aren’t yet met.

A strength for these employees was that they felt a high sense of trust within their immediate teams -- it was cross-team collaboration that was difficult. Only 25% of employees strongly agreed there was cooperation between their department and other departments.

Your people ultimately determine whether you deliver on the promises you make to your customers. If you want to drive customer retention and growth in hard economic times, don’t neglect your culture.

Gallup layered employee stories over these quantitative insights, rolling out an immersive workshop to the leadership team. This allowed leaders to take ownership of the results and create a strengths-based roadmap to deepen customer obsession and commitment to change.

The early partnership between Gallup and the client was imperative. The culture audit showed that the key to continued success was harnessing the bonds among team members, not restructuring in a way that would break those bonds.

A critical best practice for leaders is avoiding the tendency to highlight only what needs to change. Gallup’s research on the needs of followers reveals that during times of change, it’s just as important to communicate what will stay the same.

This makes change management easier for your organization because it rarely -- if ever -- involves wholesale change. Managing change is about building on the existing foundation of your culture and equipping your managers and teams to take the next steps.

Create Alignment With Leaders and Managers

A cloud services and cybersecurity firm wanted to transform their sales organization by building a culture of coaching. After the initial culture analysis, consultants worked with leadership to build momentum by upskilling managers before approaching the broader community of customer-facing teams.

Gallup and our client collaborated to configure a coaching journey for sales managers, which allowed them to become champions of their evolved culture and approach to development.

Why did we start with aligning managers? Managers are critical in translating change for their employees. By aligning managers first, they have psychological ownership over the changes and are deeply engaged in the process of making them companywide.

In many change initiatives, high-level leaders know what they want and broadly communicate it. But Gallup research shows that 70% of the variation in employee engagement is attributable to managers. They’re your key to success -- they field questions from individual contributors and advocate for changes on the front lines.

Equipping your managers to be continuous coaches not only helps with change management, but also drives greater performance. For example, in our work with salespeople, those who receive strengths-based performance coaching achieve 11% higher volume and a 6% higher closing percentage on average.

Drive Adoption Through Talent Investment

Starting fast and achieving a few “quick wins” are part of any basic change plan. As part of its culture transformation journey, one major social media firm decided that activating their culture with strengths-based development would yield quick changes and renewed engagement.

The firm partnered with Gallup to deliver foundational strengths-based development opportunities and build a customized strengths-based sales program so customer-facing teams could use strengths to propel deeper customer impact.

Sales executives and account leaders learned how to understand their prospects’ psychological needs through the lens of strengths domains. Doing so enabled them to show up authentically, in ways that resonated more deeply with customers.

Equipping your managers to be continuous coaches not only helps with change management, but also drives greater performance.

For example, some customers best respond to account leaders who strongly believe in the mission and purpose of a project or in the difference their product or service can make. That's a common trait of people motivated by the Belief strength. Salespeople who lead with Learner tend to do extensive research to understand their customers and use that information to form connections. Guiding through expertise and being a confident spokesperson for an organization is typical of the Significance theme.

Strengths can yield quick results in essentially any sales situation -- customer-facing salespeople who know all 34 of their CliftonStrengths see a 7.8% increase in sales. Strengths-based selling provides quick wins and positive momentum for customer-facing teams undergoing change.

Embed Culture Into Processes

At this stage in the change process, you have planted the seed and nourished it, and it’s starting to take root. But, unless there’s regular and consistent nourishment, the seed won’t grow. As a change starts to mature in an organization, it’s important to embed that change into existing processes and procedures so that it receives regular and consistent attention.

Gallup worked on empowering one technology firm’s sales executives and account leaders to think differently and better serve customers through their unique strengths. The firm partnered with Gallup to embed a new mindset and approach to their sales process. They rolled out the tools, resources and daily expectations through workshops focused on each stage of their sales process, clearly indicating what excellence looked like at every step.

The common thread of our work with this firm was developing a more customer-centric approach to sales. By embedding strengths into the sales process, sales and account leaders rejuvenated performance with customers and connections among their internal teams. Consistently replicating this experience for their global teams strengthened their culture. And our client work has shown that strong organizational cultures have a major impact on key performance metrics, with some clients seeing an 85% net profit increase over a five-year period.

Culture Change for Your Customer’s Sake

Customer engagement is achieved through more than just reimagined sales pitches or telling your new team members to mimic the top performer. To achieve enduring customer engagement, you must strengthen the culture of your organization to enable customer-facing teams. Employees will be committed to delivering quality products and services while being more agile, responsive and better equipped to delight their customers.

A better strategy to engage customers during economic instability isn’t a pleasant afterthought -- build your organizational culture to gain a competitive advantage in today’s marketplace.

Start creating customer-centric teams with culture change.

CliftonStrengths® and each of the 34 CliftonStrengths theme names are trademarks of Gallup. Copyright © 2000 Gallup, Inc. All rights reserved.


Nick Furman is a Senior Consultant at Gallup.

Rachael Smith contributed to this article.

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