CXM Industry Insights: The Link Between Customer Loyalty and Employee Engagement

CXM Industry Insights: The Link Between Customer Loyalty and Employee Engagement
It’s interesting that the bulk of the attention given to customer experience strategies is focused on attaining customers (i.e. digital marketing). But today it’s harder to retain customers than it is to attain them. While the discussions about customer loyalty have been around for a long time, I think that this year, as organizations get a better handle on what customer experience really means to their business, we’ll start to see much more emphasis on customer loyalty strategies than ever before.

This week, since much of the discussion out on the Web is still focused on trends for 2014, I thought it would be interesting to take a look at the importance of the engaged employee and what it means for customer loyalty (after all, you can only talk trends for so long right?).

2 Key Laws of Customer Experience

Have you ever read Tempkin Group’s 6 laws of Customer Experience? If you haven’t, they have a nice little infographic that gives you the high level look at each law. There are two laws in this list that captured my attention:

#4: Unengaged employees don’t create engaged customers

#5: Employees do what is measured, incented and celebrated

We know that customers and prospects look around to family, friends, peers and the Web overall to get information about brands. But how they are treated by a brand’s employees is also critical to attaining and retaining that customer. So it’s important to spend a significant amount of time and effort to make sure your employees are equipped to do the best job they can.

But even if you provide your employees the right tools, they are not always going to do the best job possible to make customers happy. This is where we start to understand the concept of the engaged employee.

A Satisfied Employee vs An Engaged Employee

If you are like me, you didn’t know there was difference between a satisfied employee and an engaged employee. But according to Colin Shaw, in his article “New Generation of Business: Connecting Employee Loyalty with Customer Loyalty“, there is.

Shaw says that a satisfied employee is one who is relatively happy about their job: the work, the pay and benefits, the possibilities for growth, etc… They come to work, they do their job well, they go home.

An engaged employee though is one who is passionate about the work they do and will go above and beyond what is typically expected of them for the greater benefit of the organization and its goals. They are the innovators, the ones who have the most potential to affect the customer experience in a good way.

These employee ambassadors, as Shaw calls them, have three key traits:

  • They are committed to the company
  • They are committed to the value proposition
  • They are committed to the customer

Where Are All the Engaged Employees?

But the reality is, there aren’t a lot of engaged employees. In the Gallup’s State of the Global Workplace, it was found that only 13% of employees are engaged worldwide. That number rises to about 30% for the US, with New Zealand and Australia coming next.

In Gallup’s research, they found a strong link between engaged employees and customer loyalty. The same was noted in recent Bain & Co research. Research of over 200,000 employees around the world showed that the lower down you go in the company’s org chart, the less engaged employees are.

The report also pointed out that it was leadership’s role not to give directions, but put in place a framework in which employees can work to achieve the overall goals of the organization. In other words, provide the guidelines, leave room for interpretation that is likely to lead to innovative ways to make customers happy – and more loyal.

The Gallup report says that the greatest opportunity lies in turning unengaged employees into engaged ones. Unfortunately they are hard to spot, because they aren’t necessarily unhappy. Tempkin points to a few ways to create these engaged employees, including: training, finding ways to celebrate, making it easy for them to do the right things and “communicate, communicate, communicate.” They also say you need to measure employee engagement constantly.

Don’t Expect Engagement to Take Care of Itself

In her article “7 Employee Engagement Mistakes to Avoid in Uncertain Times“, Vicki Hess, RN, MS, CSP says:

“Since employee engagement drives every key metric you measure (safety, quality, satisfaction, throughput, etc.), you really can’t afford to not pay attention to it. Unfortunately, for many organizations, the only time engagement is talked about is when the annual (or biannual) survey is done.”

Unengaged employees mean that customers may not be taken care of after the sale is complete. This reduces customer loyalty and has the potential to take away from all the work that is happening in the marketing and sales department to attain those customers. And that’s something you don’t want to happen.

So, while you are developing your digital marketing strategies, defining your sales and support models, don’t forget to think about what you can do to encourage and support employee engagement.

Now that’s something to think about.

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