Is there a link between Employee Loyalty and Customer Loyalty?

Well, employee and customer loyalty are different things, right? There are different programs, processes and owners that drive merchant or channel loyalty, customer loyalty and employee loyalty in many big companies. In other companies, all of these may not exist but what does exist, say customer loyalty programs, don't ever concern themselves with employees or partners. 

What if there was a link?

One end of the spectrum would be a great company, doing well, and selling a great product. Customers are happy, which is why the product sells a lot. Employees would be happier here than in a slumping company with sad products to push, no matter what the HR policies are. Employees of a successful company tend to gain more resume-value (e.g. doubled sales from X to 2X), have more promotion and increment chances since such companies tend to earn money and expand, and in general even if they're riding a wave, feel proud about their numbers. But while this logic may hold, there's a much better, simpler way to see the relationship between the two loyalties. 

A company is its products, its customers and its employees. 

Imagine a restaurant that you want to be loyal to, but that loses its doorman every week, chef every other week, barman now and then. Now what will bring you back? It can't be the food since the new chef will cook it a bit different, and it can't be the service. Most of all, you'd suspect the restaurant does something wrong by its stakeholders. Just the brand or the interiors can't create loyalty. And more than anything else, especially in the service industry, the product is a function of who delivers it. The trainer is the training, the salesman is the shop and the call-center employee is the company. Once these front-facing people leave, patrons think the place 'isn't what is used to be'. And it applies to product companies as well since IP finally resides in people. It's just that all of them aren't leaving together - else we'd know that KM systems can only do so much to preserve knowhow. 

Allow me to also claim, for a bit, that since a company is a set of employees, employee-loyalty is loyalty to other employees. Once a company loses some employees, it'll lose more since the act of employees leaving spoils the employer-brand ones and of-course, those that leave can poach. So if you think the doorman is okay to let go but not the chef, you may be right... but only till the doorman tells the chef about his great new workplace that also needs a chef.