Are You Punishing Loyalty?

Posted by in Leadership

Maybe you’ve had an experience like this?

I called my cable television provider a few weeks ago because I’d seen them advertising some special deals for the holidays. I’ve been with them for a few years, and their hold message repeatedly claims that I’m a “valued customer”.

Well it turns out that their advertised rates are only for new customers and as an existing “valued customer” I did not qualify. On pressing the salesperson I discovered that the only way to qualify would be to close my account, wait 30 days, then reapply as a new customer.

This is called punishing loyalty.

I wasn’t on contract. Needless to say they lost me to a competitor.

In a day when business leaders talk so much about customer loyalty, why do we allow business strategies that punish loyalty? Why do we so often reward the fickle and neglect the faithful?

Sadly TimeWarner is employing a philosophy of value that can be seen in all kinds of organisations.

So what else does punishing loyalty look like?

  • Managers who take their longest-serving staff for granted.
  • Leaders who wait for everyone to arrive before starting meetings punish the timely and reward the tardy.
  • Companies that lure new staff with premium salaries while loyal team members are trickle-fed CPI increases.
  • Fostering “squeaky wheel” cultures where those who complain or rock the boat get your attention and those who are conscientious and compliant get ignored.
  • Offering the best price/ best deal/ best seat/ best project to the last on board.
  • Shipping substandard products to the passionate early adopters that require endless patches/ fixes/ recalls (think software giants).

If new customers or new team members around you feel special, while the loyal ones feel unappreciated, it might be time to rethink your values.


I’d love to hear your comments and feel free to use the links below to share this article with others
Paul Andrew is Founder of The Leadership Coach™

He is a Keynote Speaker and Management Consultant based in New York

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26 Responses to “Are You Punishing Loyalty?”

  1. E Derrik

    17. Jan, 2012

    Great insights, Paul and I’m reviewing our current practices to see where we can do better.

  2. Bob Green (pops)

    17. Jan, 2012

    Awsome info Paul we should always be on the defense and not just trip along in life like we are in a cloud thanks Bob

  3. A Arnold

    17. Jan, 2012

    Great post, Paul. Definitely made me think about checking in with the faithful quiet. People change and grow so quickly that they may not even be the same person you met at the starting line anymore. There are always loyal people that you wouldn’t hear a peep from unless you asked directly.

  4. Darren

    17. Jan, 2012

    Yeah Ike this post. How about hotels who seek rooms on the Internet cheaper than their corporate accounts who use the hotel weekly?

    And airlines that sell upgrades for $500 when the other people payed thousands to sit there.

    New business I seen as the prize but old business is bread an butter and it’s only realized when they are gone.

  5. Kathy Joyner

    17. Jan, 2012

    This is so true of cable companies and wireless companies, even though I think wireless are wising up to the loyal customers.

    All companies should see what we do to reward loyal customers. Thanks for sparking the conversation.

  6. Annake

    17. Jan, 2012

    Why not give a welcome gift to new team members rather than spending hundreds on gifts for team members who are leaving?

  7. Debbie Thompson

    17. Jan, 2012

    I think what you’ve described is sadly common, Paul. I’d add to the list loading up the high performer with projects that the slacker “doesn’t have time for” because it takes less effort for the leader to get the high performer to do it than to face the slacker and address the problem. The cost for a project manager friend of mine: passed over for promotion because he’s so busy “doing” that he’s not been looking after the extras that get you promoted. The cost for the organisation if my project manager friend leaves (which he may because he’s uber-frustrated): they lose the guy that actually does the work are left with the slacker.

  8. Paul Andrew

    17. Jan, 2012

    That’s great to hear – hopefully all of us take stock like that on a regular basis

  9. Paul Andrew

    17. Jan, 2012

    It’s easy to forget to check in how we are treating those who’ve been with us for a while!

  10. Paul Andrew

    17. Jan, 2012

    I like your thought about how people change too – if we neglect the loyal, we could easily miss how much they’ve grown.

  11. Paul Andrew

    17. Jan, 2012

    I think that’s a key – when new business is seen as the prize. Of course we need BOTH- but we’ve got to be careful not to be so enamoured with new business that we neglect the “bread and butter” as you put it

  12. Paul Andrew

    17. Jan, 2012

    My pleasure Kathy – and I think some industries are really good at this, like airline reward programs. Clearly there’s an economic benefit to rewarding loyalty too.

  13. Paul Andrew

    17. Jan, 2012

    I agree Annake – I think welcoming new people with a gift is great. I just hope we don’t forget to appreciate those who aren’t new. You point out something interesting too – that we give gifts to people when they leave. Maybe the forgotten people are those that are neither new nor old- just the faithful team members who stay.

  14. Paul Andrew

    17. Jan, 2012

    Ouch! Too true. “Rewarding” the diligent with dead end work. It’s the path of least resistance for managers, but at subtle punishment for being hard working.

  15. Gail

    17. Jan, 2012

    I’m with you on this one Paul. We need to value those who remain. And when we do give gift those who leave there should be “better” gifts for those who stay the longest.

  16. Gail

    17. Jan, 2012

    As a very loyal person I often get punished for it. It is stupid really when business has known for decades that to keep an employee or a customer is significantly cheaper than acquiring a new one. Why we still chase new (and often more fickle) customers and employees than invest in the ones we have, despite all the research, is beyond me.

  17. Rajan

    18. Jan, 2012

    As usual appreciate your concious provoking topics. This has been a very topical matter for me. I’ve noted how I was creating an average team rather than magnificant one. In the recent past I spent enormous time on the a small proportion of weak links in my team sucking valuable time that could’ve made a difference to much more loyal, productive team members. They say you an average of your environment. I guess, as a leader, I elevated my awareness on how we create this.

  18. Claire

    18. Jan, 2012

    I agree, especially with the ‘squeaky wheel’ syndrome and taking long time staff for granted.
    What I have also noted is that the staff who are taken for granted are not squeaky enough.
    There is another option and that is assertiveness and standing up for what one is entitled to: just make sure the evidence is there. Sometimes management need to be reminded of the true value of their staff.

  19. Mark Nicholson

    18. Jan, 2012

    LOVE, LOVE, LOVE THIS!!!! Showed this to the boys in the vineyard today…..they couldnt agree more!!!!

  20. Paul Andrew

    18. Jan, 2012

    If you’re trying to make me jealous that you were in the vineyard… it worked

  21. Paul Andrew

    18. Jan, 2012

    I also wonder about the opportunity cost – how much MORE might those who stayed have been willing & able to do, had they not felt like their loyalty was taken for granted?

  22. Paul Andrew

    18. Jan, 2012

    I think you’re right Claire- it’s not all up to the leaders… people need to be assertive too. Maybe you could write a companion post, to the person who is loyal but undervalued!

  23. Lorna

    19. Jan, 2012

    Fabulous article Paul. So utterly true in mindset of the corporate environment today!

  24. Simon Mouatt

    06. Feb, 2012

    So true a point Andrew, it is very easy to reward the squeaky wheel or to revel in the new and novel, except that if all you do is this then what does it speak of you and the culture you are building. While I agree with the above comment that those who are in the team also need to be assertive, it is the leaders job to ensure that each member of the team not only feels that they are part of the team but they play an important role in its success.

    As leaders we need to develop ways of recognising diligent work with something other than more work because they are “dependable”. So think about the those grey members in your team, do you know what their hot buttons are to help the become inspired?

  25. BZ

    24. Jun, 2012

    Yes. Sticking around thru thick & thin until we reach retirement used to get us a gold watch. Now it’s a rush to move folks out of the ranks so the higher ups get to keep more of the 401(k) pot!

  26. Dixon

    01. Dec, 2012

    So true Paul even in a church environment . Love it!