Happy and engaged employees create better experiences, which leads to a more satisfied and loyal customer base

Of all the areas of life that have been disrupted in the first half of 2020, one of the most affected has surely been work life. While millions of office workers have been adjusting to working remotely, essential workers have needed to adapt to scores of new rules and regulations at their workplaces as the year has progressed. Regardless of how they’ve been affected, the majority of workers have faced significant change, and this is having an unprecedented impact on employee experience.

As we wrote recently, customer experience is likely to be a key differentiator for brands in the post-Covid world. In recent years, the significance of the impact of employee experience on customer experience has also been increasingly acknowledged. A customer’s first point of interaction with an organisation is usually through its employees, and this first interaction can be make-or-break for first-time or infrequent customers. If employees do not make a good impression, potential customers may leave and never come back. Companies that can provide excellent employee experiences in this fast-changing world, then, and translate this into great customer experiences, will be in a strong competitive position. Below, we have listed five of the key ways in which the employee experience affects customers:

1. It’s been statistically demonstrated that an engaged workforce makes businesses more profitable. A study published in the Journal of Occupational and Organizational Psychology has shown that employee commitment to their organisation has more impact on business performance than vice versa. The research looked at the commitment of a sample of retail bank employees, the financial performance of the bank over time and the customer satisfaction of the business areas the employees worked in. It found that within a year it was already possible to see a reciprocal relationship between job attitudes and business performance. Research elsewhere has found that companies with highly engaged employees outperform their competitors financially by nearly 150%.

2. This improved profitability is at least partly due to superior customer experience. 87% of Starbucks customers’ affinity for the brand has been found to be driven by the way the company treats its employees. Nordstrom is famous for its world-class customer service to the extent that there have been books written about it. It’s no coincidence that Nordstrom also offer exceptional employee experience: they’ve been ranked one of the Top 100 Places to Work in the U.S. for over 20 years.

3. Engaged employees simply understand how to deliver good customer experience better than unengaged ones. A staggering 70% of engaged employees indicate a good understanding of how to meet customer needs, compared to just 17% of disengaged employees. U.S. supermarket Publix is employee-owned and regularly wins customer satisfaction awards, in part because these engaged employees have a reputation for regularly looking for small ways to make customers’ lives easier.

4. The impact of employee experience on customer perception of an organisation goes beyond their direct shopping experience. In the age of social media, some organisations have seen just how directly a negative employee experience can impact their bottom line, when media stories about poor staff conditions have attracted the attention of potential consumers. In 2016, for example, Chairman Mike Ashley told The Guardian in 2016 that the negative press surrounding leaked working practices at Sports Direct resulted in a 57% drop in first-half profits that year. This can have an impact even on organisations that have a strong customer experience track record: the “Boycott Amazon” movement has been gathering pace in recent years, in part because of increasing awareness of the poor working conditions experienced by many of Amazon’s warehouse employees.

5. Engaged employees actively find new ways to make customer experience better. The companies that give their people space to innovate are also the ones that tend to provide strong customer experiences. It is no coincidence that Google, a company that has been almost relentless in the optimisation of its product roster for over 20 years, is still seen as the default search engine by much of the world. And even seemingly small-scale improvements can make a big difference. An analyst at New Zealand’s Contact Energy, unhappy with many of the repetitive tasks required for their role, developed an automated process to handle those tasks. Recognizing that this initiative delivered results, the company rolled out the solution more widely, and today the company actively works to improve customer experience by automating simple jobs so that agents are free to spend more time dealing directly with customers. Improved customer satisfaction was an almost indirect side effect of improvements to the day-to-day experience of employees.

Happy and engaged employees create better experiences, leading to more satisfied and loyal customers and, ultimately, brand and company growth. The workplace status quo has already been comprehensively shaken up over the last few months. Organisations that take the opportunity to make lasting improvements for their employees may also find they win a loyal new customer base.

Written by:

Fran Cavanagh