Linking Employee Engagement to Customer Loyalty
As a business leader, you spend a lot of time worrying about how you can improve the customer experience, deepen the relationship, and entice them to come back more often and share more of their wallet with you.
But what if all that focus on the customer was for naught?
Think about it… how often have you gone into a store that had great merchandise, well presented in an inviting environment, then walked out feeling disappointed by the experience and vowing never to come back?
Experienced retailers can sense the ‘health’ of a store almost subjectively, within seconds of setting foot inside. It’s uncanny. A place that feels happy and healthy is more inviting and always performs better across all the metrics than a place that does not feel that way.
Your customers have that same ‘sixth sense’ about your business, regardless what industry you are in.
The Hidden Driver of Customer Satisfaction and Sales
A recent Conference Board Study found that four out of 10 of today's employees feel disconnected from their employers, and a quarter come to work "just for the paycheck." But according to the Conference Board, employee disengagement is resulting in a largely unproductive workforce.
This finding is supported by the Profiles International—Imagine Great PeopleTM study that reports $350 billion per year is lost because of lower levels of productivity and increased absenteeism, primarily due to an epidemic of employee disengagement.
Productivity and operating inefficiencies aside, there’s also a direct link between employee engagement and customer satisfaction, and you have to have one to get the other. The payoff is significant… particularly when Verde Group and The Wharton School of Business have been able to show organizations conclusively that disengaged employees cause decreased customer loyalty. Recent research conducted in the Retail sector shows that customer problems related to disengaged salespeople result in lost business and negative word of mouth.
- Insensitivity to long check-out lines results in the second largest loss of business.
• In total, 4% of all shoppers will not go back for this reason.
- Being ignored - no smile, no ‘hello’, no eye contact - turns 3% of all customers away from a retailer.
• This is also the #1 problem customers are likely to share with others.
- This is costing retailers big money.
• American retailers are losing 6% of their shoppers due to lack of competent and engaged employees.
The Employee - Customer - Revenue Link
In The American Society for Training & Development’s 2008 study, 83% of respondents said that, to a high or very high extent, enhancing customer satisfaction was a key business reason for promoting a more engaged workforce.
The linkage is clear. Engaged employees create engaged customers, who stay longer, spend more, come back more frequently, and recommend to others.
The research shows clearly that while the billions of dollars invested in lighting, merchandising, music and so on may have some impact on the customer experience and revenue… it’s billions of dollars misspent unless the organization has first put measures into place to measure and manage employee engagement. Everything rides on the quality of the interaction – those moments of truth – with your employees.
If the right people are not in the right jobs, focused on the right things… everything else is for naught.
Key Outputs of the Employee Customer Linkage Research
Verde’s approach provides a 360 degree assessment of key stakeholder’s experiences, attitudes and behaviors that are impacting organizational effectiveness, brand loyalty, revenue and profitability. Specifically the following metrics are produced:
The entire system has been designed to identify specific initiatives to reduce negative employee and customer experiences, prioritize the ones that will have the greatest impact, and measure performance improvement for both employee engagement and customer retention.
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