This blog is one of a series looking at how you can drive significant improvements in your organisation at very little cost. Improving Employee Engagement has been shown to lead to step-change improvements in all of the following areas:-
- Income growth
- Productivity and performance
- Customer/client satisfaction
- Absence and well-being
- Staff retention
- Health and safety
This post will focus on what is happening in the real world in the area of Customer/client satisfaction.
- Serco uses the Net Promoter Score (NPS) to measure customer loyalty; customers are asked to assess the likelihood that they would recommend the company to others. Those who score the question highly are classed as ‘promoters’, those who score the question poorly are classed as ‘detractors’, and those in between classed as ‘passives’. Serco worked with Aon Hewitt to look at 274 Serco client contracts and found correlation between Employee Engagement and the NPS. Those contracts serviced by employees whose engagement had improved over the year had NPS scores 24% higher than those employees whose engagement had declined.
- AON also found in a wider study companies classified as being in a “high performance zone for engagement” had a 37% Net Promoter Score (NPS) compared to only a 10% NPS for those outside of the “high performance zone for engagement.”
- 70% of the more engaged have a good understanding of customer needs against only 17% of the disengaged (PWC). Similarly, 67% of engaged employees were happy to advocate their organisations compared to only 3% of the disengaged.
- 78% of the more engaged employees in the public sector felt they could impact public service delivery positively; only 29% of the disengaged felt the same way (Towers Watson 2007).
- A CBI-AXA report from 2007 found that 70% of engaged employees indicated a good understanding of how to meet customer needs; while only 17% of non-engaged employees said the same. Another study found 85% of engaged employees reporting that they can positively affect customer service. This falls to 42% (half) amongst those who are not engaged.
- An hotel chain study found that a 10% increase in “the extent to which employees try to satisfy customers” resulted in a 22% increase in customer spending per hotel visit.
Studies have found that companies with high employee engagement scores had twice the customer loyalty (repeat purchases, recommendations to friends) than companies with average employee engagement levels. (Are They Really ‘On the Job’?, Pont 2004) The impact that engaged employees have on customer loyalty has a multiplier effect as dissatisfied customers have a tendency to broadcast their dissatisfaction to many of their contacts whilst satisfied customers tend to tell fewer people that they are happy. The Technical Assistance Research Program (TARP) found that customers who complain to an organisation, and have their complaints satisfactorily resolved, tell an average of 5 people about their good treatment. If they receive poor treatment, they tell an average of 20 people about their poor experience.
- We know that satisfied customers buy more from us. Both Sainsburys and Dorothy Perkins found that stores with higher levels of employee engagement captured mores sales growth from more satisfied customers.
- One way to really improve the impact that Engaged Employees can have on customer/client satisfaction (once you have got them engaged) is to improve their communications skills by investing a little in training them to be more aware of how we communicate with each other. This is particularly effective for customer-facing staff, helping them to understand how customers are communicating with them. Training enables them not only to understand this, but also enables them to also respond appropriately. This increases their customer connectedness, leading to improved customer engagement. More engaged customers buy more.
It is clear that levels of Employee Engagement can substantially increase customer/client satisfaction. Satisfied customers are more loyal and spend more. Many organisations are looking at how to reap these benefits as a way of responding to the current economic climate. Organisations can put in place sensible programmes to improve Employee Engagement that do not cost a great deal and deliver great bottom line results. Organisations win when they thoughtfully and consistently implement well-designed programmes to increase Employee Engagement.