The direct link between corporate culture and customer loyalty


In recent years, we’ve seen an increasing emphasis on culture as a driver of business success, with plenty of data to prove it. Research has found that engaged employees can drive a 21% increase in profitability and a 10% increase in customer ratings. Yet when I walk into a room with investors today, talking about culture is like speaking another language.

Too often, business success is too streamlined. We forget that rapid growth, exciting growth, doesn’t happen with a smart business plan. It happens when a business has an entrepreneurial culture. When employees feel empowered to throw the plan out the window and take a risk.

This type of culture does not magically develop out of a company’s ethics or values. A winning culture is defined by action. And to grasp its true impact, investors and business leaders need to think about culture in a more holistic way. We need to understand how culture can fundamentally change the way a business makes decisions, in a way that will always translate into better business outcomes.

What a winning culture looks like in action

To illustrate this, I often tell a story about how we built the logistics department of my company. In the beginning, we considered hiring a leading logistics expert from a competitor. Requirement ? Bring us a plan that will give us an edge over the competition. But after careful consideration, we realized that an expert could not provide what we were looking for. An old man would follow the best practice. To win, we needed the unexpected.

So we changed tracks. We had a brilliant intern right out of college, a smart kid who didn’t know anything about logistics but was able to learn quickly. He spent time with all of the major logistics companies in the country, took the best of each and invented his own path. Today, this same logistics operation helps us deliver our customers faster than our competitors.

The lesson here is simple: creating an environment where people feel empowered to take risks is fundamental to fostering innovation. By listening to people who are just starting out, we move away from the expected response. Option A is to continue as you are, with little change and predictable growth. Option B is to take the risk of a major disruption, where the potential is limitless.

How to know if your culture is designed for innovation

Thus, to be successful, a company must foster innovation at all levels. But once you’re inside, it can be difficult to objectively see if that’s the culture you’re building. A good way to diagnose this is to look at the hiring. How do new employees start their journey in your business?

Most of the time, when a new employee walks through the door, they are given a title and job description. What it says is: here is your way. Rather, we should be telling new hires: This is what we think you can achieve.

We have had great success giving employees what we call “assignments”. A mission can range from “launching a new phone app” to “improving customer service”. It’s a small change in the way we conceptualize a job, but it has a huge impact. Suddenly your employees don’t just have a role, they have a purpose and a reason to celebrate. In addition, the pace of change and innovation is faster, as people are motivated to complete their assignment and move on to the next challenge.

If customers leave, culture could be to blame

I learned early in my career that the quickest path to business failure is a lack of customers, whether they are leaving or the business cannot find them in the first place. Of course. But it might surprise you to learn that customer loyalty also has a lot to do with company culture and attitude.

Culture is about a company’s values, and if it’s not the customer, they’ll go elsewhere.

To build a truly customer-centric business, everyone in your business needs to be exposed to the customer. Regardless of their job title, make sure employees at all levels are spending time with customers. They need to hear first-hand the problems your business is working to solve.

Building a culture of listening and caring for customers will help you gain a competitive advantage. If you make sure that a real human immediately picks up the phone when people call for an issue, they’ll trust you before anyone else. If you consistently collect data on the type of issues your customers are facing, you’ll be the business able to resolve those issues faster than any competitor.

In a competitive labor market, culture gives companies an advantage

Whether investors are listening or not, if companies don’t focus on culture now, it will catch up with them in the long run. All over the world we are seeing what people call the Great Resignation. Even with high unemployment, people are increasingly picky about where they will work and where they will not.

Above all, the younger generation wants to change the world and do work with real impact. For this reason, culture has never been more important in attracting the right talent, and the pressure will only increase as this new generation dominates the workforce.

Culture change starts with being humble and honest. Look at your business as if it were a person. Why do I want to work for them? How will they help me achieve my goals?

Don’t be the big boss who assumes you have all the answers. Be ready to be challenged by young people, to be invited to do better. Show them how to take care of each client individually. Invest in an entrepreneurial culture, and when it’s time to deliver, you’ll always have a team behind you.


Augusto Lins is president of StoneCo, a Brazilian financial technology company that works with entrepreneurs to increase sales and productivity.