The Connection Between Employee Engagement & Customer Satisfaction
“To win in the marketplace you must first win in the workplace.” Doug Conant, former CEO of Campbell Soup
A company is doing something right if both their employees and customers are happy. We know about the importance of employee engagement and the importance of customer satisfaction. But, as Doug Conant suggests, is there also a connection between the two?
The short answer is yes, and a strong connection at that. Delivering a positive customer experience is crucial to your business: 80% of U.S. consumers would pay more for a product or service to ensure a superior customer experience.
So we’ve outlined an important — and often overlooked — way to ensure positive customer experiences: employee engagement.
Want to learn more about what engaged employees look like? Our culture report breaks it down. Download it here.
Happy Employees = Happy Customers
It’s not just speculation, these two elements really are deeply connected. Here is a sampling of studies that support this conclusion:
Companies in the top quartile of employee engagement experience 10% higher customer ratings. (Gallup State of the American Workplace)
Employee engagement affects your bottom line. Employee satisfaction is directly linked to customer satisfaction — and customer satisfaction is directly linked to financial performance. (Washington State University)
A study conducted by Washington State University determined that customer satisfaction is directly linked to employee satisfaction and that financial success is directly linked to customer satisfaction. Therefore, employee engagement is indirectly, yet importantly, linked to financial performance.
Employee behavior and attitude is one of the most significant drivers of customer satisfaction. These employees spread their enthusiasm to customers and are more dedicated to providing the best possible service. For example, as Bain & Company explains, the “key ingredient” to JetBlue’s high customer ratings is that “JetBlue employees treat customers’ problems as their own.” (Bain & Company)
Satisfied Customers Also Increase Engagement
It’s a win-win. While engaged employees lead to satisfied customers, the opposite is also true. Satisfied customers also play a role in employee engagement.
Positive customer experiences can reinforce how employees feel about the value and purpose of their work. It motivated them to repeat their behavior, to see even more value and purpose in their work.
While it’s important to learn from negative customer experiences, positive ones should also be highlighted to motivate employees and drive engagement. Therefore, managers and supervisors should highlight and recognize customer satisfaction success stories.
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Engagement Matters for All Employees
It’s easy to understand the connection between engagement in customer-facing positions (like sales and customer service) and customer satisfaction. However, it’s also important that those behind the scenes are engaged and dedicated to providing the best experience for customers. This starts with your people managers.
According to a Tower Watson study, managers are a crucial driver for the culture and engagement in a company. Therefore, it’s necessary that they themselves are engaged and empowered to bring about positive behaviors.
This creates a ripple effect in the organization: when managers are engaged, those reporting to them are more likely to be engaged, and the customers interacting with these employees are more likely to be satisfied.
Unfortunately, studies indicate that those in customer-facing roles experience lower engagement. This is why a “one-size-fits-all” approach does not work for engagement or customer satisfaction. It’s important to understand the causes and hindrances of engagement within specific groups and levels, and what that means for customer satisfaction. This leads to the next point: how are these factors interacting in your company?
Tracking and Optimizing the Connection
While the link between employee engagement and customer satisfaction has been proven in numerous studies, it’s important to study how these two factors are playing out in your organization. Here’s how to do it in three steps.
Step 1: Track NPS
As previously explained, tracking your customer Net Promoter® Score (NPS®) and your employee NetPromoter Score (eNPS) on a regular basis is a good place to start.
Step 2: Analyze Results
Don’t stop there — dive deeper into group-level analytics to understand how the metrics are affecting each other and what you can do to improve the two.
Step 3: Understand Your Results with Feedback
Finally, in order to optimize the connection between employee engagement and customer satisfaction, all employees should feel empowered to contribute feedback about their personal experience and the customer experience. You can do this with ongoing employee engagement surveys.
Learn more on the tie between strong cultures and engaged employees. Download our free report.