Not all big companies are dinosaurs. In six months, McDonald’s turned itself around and grew twice as fast as Wall Street expected. Here’s what you can take away from that success.


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McDonald’s CEO Steve Easterbrook blows me away.

He is proving wrong the idea that big companies are always slow, lumbering giants that can’t adapt to change.

Since he took over as CEO in January 2015, Easterbrook has moved fast. He shuttered hundreds of poorly-performing stores, brought back all-day breakfast, streamlined its menu, cut customer wait times, and raised employee pay — which made workers and customers happy.

These moves have contributed to its first quarter of sales gains in two years — in October McDonald’s enjoyed a 5.7% boost in sales — way more than the 2.7% analysts had expected. And its stock soared to an all-time high.

Underlying this success story is loyalty — a basic business concept that any company can use to keep its revenues flowing fast. The idea of loyalty is that if you have happy employees, they will convey that happiness to customers.

And happy customers will keep buying from you over a long time and tell their friends and family to give you a try.

The result of all that happiness will be lower marketing expenses — since you won’t need to advertise as much to bring in new customers — and higher profitability flowing from those loyal customers.

Here are five things you can do in your business to boost sales and profits using loyalty.

1. Create a loyalty culture

If you want to use loyalty, it has to be at the core of your company’s culture. If your company is focused too heavily on competition and squeezing the most out of your people, your suppliers, and your customers, you will probably need a new CEO to create the culture you need.

A loyalty culture is based on specific values — e.g., customer is boss and our people matter — that you must articulate and use as the basis for hiring, training, promoting, and managing people out of your company.

Creating the right culture won’t pay off immediately, but it is the foundation on which the other four things rest.

2. Hire people who enjoy serving

Speaking of hiring, you cannot have a business based on loyalty unless the people you hire genuinely enjoy serving others. In Value Leadership I pointed out how strict Southwest Airlines is about screening for employees who care about helping other people and treat those at all levels of the organization with respect.

Your interview process should test how people apply their values in unusual situations. One thing Southwest did was to put potential hires in a group setting, gave them projects, and asked groups to present their findings to each other.

Southwest would hire employees who cheered on the other groups rather than the ones who focused solely on doing a great job on their own group’s presentation.

3. Listen to customers

Once you have the right culture and the right employees, you need to focus on listening to customers.

The reason that McDonald’s achieved such rapid growth is that it responded to what customers wanted. For years, its customers asked McDonald’s to offer all-day breakfast on social media like Twitter.

Until Easterbrook came along, McDonald’s did not listen. But he did. And then the company prepared its stores with the inventory and staffing that they needed to turn the promise of all-day breakfast into a reality within around six months.

The result was more customers going to the stores and buying.

4. Measure net promoter scores

One of the most basic principles of organizations is that what gets measured gets done.

And a loyalty culture works best if you are measuring how likely it is that customers will recommend you to their friends and others in their networks — dubbed a Net Promoter Score (10 is outstanding, 1 is terrible).

To measure NPS, you have to have an objective survey of your customers and you have to collect the data and analyze it for each store over time.

Stores with the highest NPS are likely to be growing fastest. And they may be able to supply best practices that you can share with other stores to boost the overall performance of your business.

5. Give workers great pay and bonuses linked to customer satisfaction

Finally, if you have happy workers, they will make your customers happy.

Paying people more is helping McDonald’s to boost its employee satisfaction and its customers are also happier as a result. And in addition to higher base pay, you can focus your service-oriented people on making customers delighted with their experience by paying them bonuses for improving the NPS of customers they serve.

There’s a good chance that McDonald’s has a ways to go before it has completed its turnaround.

But its initial success offers many good illustrations of how applying these five loyalty principles can help any company boost its sales and profits.