International School of Management

As this paper previously addressed and analyzed, an abundance of research has shown a positive correlation between employee attitudes and customer satisfaction. When employees and customers connect, beyond just a superficial transaction, customers gain a sense of importance and caring that leads to enhanced customer satisfaction and long-time customer loyalty. Maine Savings takes several important steps in order to ensure the best possible employee-customer relationship. Among these are ensuring that employees that interact with customers are themselves satisfied and display the best attitude possible, using the customers name when addressing the customer, and conversing with the customer about more than just their transaction when possible. Employees at the company are taught that each and every customer interface is an opportunity to build a relationship that will be beneficial to both the customer and the company. In many cases, customers request certain employees and will only conduct business with the employees that they have known for a long time and have built a mutual trust in. Customers like this tend to be loyal, long-term, and profitable customers for the organization.

purposes of a mutually beneficial relationship for the customer and the company.

The “FISH” philosophy of delivering world-class customer service was previously discussed comprehensively in this paper. In 2005, Maine Savings made the decision to adopt the “FISH” philosophy of delivering customer service. Initial training sessions were held with all of the company’s employees that included an introduction to the “FISH” philosophy, a video about Pike Fish Market, and the receipt of a book about the philosophy and how to adopt it. In addition to the training, management made the decision to make certain changes within the organization that were synonymous with the philosophy. First, the organization adopted a business dress policy to allow for a more relaxed atmosphere. Second, management asked that an employee party committee be established for the purpose of creating fun events for the employees. Third, employees were given the opportunity to choose their own music, rather than having to continue to listen to the piped in “elevator” music that had been the standard. And lastly, employees were given the latitude to come up with a catch phrase to signify the delivery of great customer service. By instituting these steps, management showed their commitment to the “FISH” philosophy and proved to the employees their resolve in taking actions that would prove the theories successful.

Maine Savings is fortunate enough to be able to at least approximate the value of a loyal customer, and can therefore prove that loyal customers are their most profitable. The Maine Savings management understands fully that just because customers claim to be satisfied customers, they are not necessarily loyal customers. In many instances, the organization learns of customers that are satisfied with their most recent transaction, but that would defect to a competitor if even a slightly better deal came along. Although the research indicates that there is an element of emotion involved in gauging whether or not a customer is loyal, Maine Savings chooses to measure customer loyalty based on longevity, volume of business, repeat business, and whether or not the customer considers Maine Savings their PFI (Primary Financial Institution). Loyal customers translate into the most profitable customers for several different reasons that include the need for little or no marketing/advertising, the ability to offer market pricing without the need for deep discounts, and the ability to retain customer deposits over a long period of time. The organization is able to use mathematical calculations to arrive at a profitability measure for every loyal customer.

As previously discussed a number of times, the end goal of customer satisfaction should be the creation of customer loyalty in order to have the maximum possible positive effect on the service-profit chain of an organization. However, loyal customers are not necessarily loyal customers from their first transaction; it usually takes many positive experiences for customers to become loyal. It is for this reason that it is necessary to track and monitor customer satisfaction so that an organization can ensure that it is doing what is necessary to create loyal customers. As this paper previously touched on, Maine Savings has begun the transformation into a customer-centric organization. They understand that being a truly customer-centric organization means putting the satisfaction of the customer at the center of every decision. Many loyal customers in organizations are there because someone in the organization went the extra mile for them or performed above and beyond normal expectations. At Maine Savings, employees are urged and coached to go the extra mile for every customer in an effort to turn every customer into a loyal customer. The remainder of this section will examine several of the techniques that Maine Savings uses to ascertain the level of satisfaction of their customers. In addition, examples will be cited that will highlight the effect of the organizations efforts in measuring customer satisfaction.

which allows an employee to see what products the customer has with the institution instantaneously. This allows the employee to not only offer the customer products or services they may not have, but also gives them an opportunity to personally assess the customer’s level of satisfaction with the products and services that they do have. This opportunity for personal and instant feedback has proven to be invaluable to the organization.

Although knowledge management at Maine Savings is just in its infancy, the initiative is already beginning to produce benefits. Knowledge management at Maine Savings actually began as an offshoot of attempting to streamline the training process within the company. The concept of knowledge sharing was introduced to the IT department, as a result of the need for IT infrastructure support. Shortly thereafter, a PAT (Process Action Team) team was convened with cross section representation from the organization. This led to the establishment of strategies for implementation, as well as the establishment of a working budget for expected costs. Now that networked terminals and personal computers are a fixture on every front-office desktop, computers are mainly being used directly by knowledge workers themselves. Due to the massive proliferation of computer technology, the company’s IT infrastructure is the ideal place to adopt knowledge management principles (Haley 2005). Maine Savings realized this early on and made the strategic decision to treat the implementation of a knowledge management system as an IT strategic initiative.

CRM (Customer Relationship Management) is a relatively new concept to Maine Savings, primarily due to the fact that the organization’s long time data processing system was not capable of handling such information, or integrating the appropriate software necessary to track the desired information. The organization went through a very comprehensive data processing conversion in January 2006 that resulted in a new, robust software system capable of integrating the most sophisticated CRM software available. As part of this package, the organization is now able to implement CRM capabilities that include instant decisioning, customer product tracking, customer preference tracking, automated customer offerings, and is able to provide the company with a picture of the customer’s entire relationship with the organization. Not only has Maine Savings been able to use this new technology to better provide products and services to its customers, but also to automate more customer information and manage data processing costs more efficiently.

Because Maine Savings carefully picked and hired senior managers that have had experience with the different elements involved in the service profit chain, they have been able to realize a steady growth in corporate profitability as a result. These members of executive management have extensive expertise in human resource management, customer service, finance, and operations management. When these skill sets were assembled and coordinated into working toward the goal of leveraging improved employee satisfaction and added customer retention/loyalty, the organization was able to realize a growth in corporate profitability. This section will examine several of the strategies that Maine Savings employed in order to increase profitability by improving employee satisfaction and customer retention. Although each of these elements has been comprehensively examined previously, this section will concentrate on the aggregate implementation strategies used and the direct financial benefits derived by the organization. A summary of the employee and customer elements involved in Maine Savings results will be considered and reviewed in the following section as well.

Many organizations that seek to improve an area of their company such as employee satisfaction take an outside-in approach to the issue. Maine Savings made a conscious decision to do the opposite and take an inside-out approach that would lead to a more comprehensive analysis and understanding of the subject. Rob Carmichael, the Vice President of Human Resources & Training was tasked with planning and implementing the phases of the strategy that were concerned with employee satisfaction. Rob’s plan was very comprehensive and included every identifiable aspect that could be associated with employee satisfaction and the workplace. One aspect of the plan that proved to be insightful and helpful in prioritizing initiatives resulting from the plan’s implementation was the assignment of a dollar value contribution to profitability as a result of any change. No area or effect to employee satisfaction was left out of the plan and no topic was off limits, including management’s reaction to or support of employee satisfaction initiatives. Everyone involved in the process understood that in order for the process to be effective it must be conducted in an open and honest manner.

Maine Savings has always considered itself a “customer focused” organization, but had never systematically evaluated the elements that lead to customer retention and loyalty. This task was assigned to Mike Cust, the organization’s Vice President of Retail Operations and Anthony Emerson, the Vice President of Finance/Accounting/Operations. Mike’s primary responsibility was to assess the level of customer service and support at every possible customer contact point. Anthony’s primary responsibility was to assess the financial impact of the different customer tiers in order to try to accurately assess ROI levels based on customer loyalty. Just as Rob did with his analysis of the organization’s employee satisfaction, Mike and Anthony developed a comprehensive and detailed plan that included and analysis and examination of every process involved in delivering products and services to the customers of Maine Savings. The important aspects involved in this analysis included assessing customer satisfaction, retention rates, and attributing an ROI to loyal customers.

During this process, Maine Savings undertook many different initiatives aimed at improving employee satisfaction, customer satisfaction, and the organization’s profitability. Many of these initiatives were being executed simultaneously and required different timetables and strategies in order to execute. Although each element involved in the initiative was important to the overall process, a dollar amount or precise effect on added profitability could not be determined. However, Maine Savings realized a year-over-year improvement in ROA of 30% for the periods from 2004 to 2006 (Maine Savings 2004, 2005, 2006). In addition to the aggregate positive results, sales per customer increased by more than 10% during the same period of time. Return on equity, cash flows, and net income all improved markedly during this period of time as well. Maine Savings executive management team has reviewed the process and results completely, and feel collectively that the improvements in employee satisfaction and customer satisfaction are directly responsible for the improvements in corporate profitability.