“There are only three measurements that tell you nearly everything you need to know about your organization’s overall performance: employee engagement, customer satisfaction, and cash flow. It goes without saying that no company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.” Jack Welch, former CEO of GE
It just makes sense, doesn’t it? Engaged, happy employees lead to satisfied customers. And disengaged, unhappy employees drive customers away. Intuitively, we all know this. But, is it true for your organization? And if so, how strong is that relationship?
Now we can tell you.
Infosurv Research developed a case study that measured the relationship between employee engagement and customer satisfaction. With the help of one of our clients, PSNi, we conducted Employee Engagement and Customer Satisfaction surveys, and we found the connection: not only is employee engagement correlated with an increase in customer NPS; but even more stronger is the connection between employee disengagement and NPS.
For PNSi, where customer recommendations are one of its sources of new business, the key customer satisfaction metric is likelihood to recommend. So we uncovered the critical relationship between disengaged employees and customer recommendations: a 2% decrease in Employee Disengagement leads to a 1% increase in customer recommendations. Using their sales data, PSNi can easily take these results straight to the bottom line.
The correlation between Employee Engagement and Customer Satisfaction individually on positive business results has been extensively documented. In fact, recently in the Journal of Occupational and Organizational Psychology and as reported in Forbes, found relationships between Employee Engagement and Customer Satisfaction that are very similar to our results.
What does this mean for you?
- First, employee engagement and customer satisfaction are both important strategic issues for your business. It has long been established that both metrics impact Now, understanding the relationship between them, managers must look at these metrics in combination. Looking at them in isolation may mask key initiatives for improvement.
- Understanding how much impact Employee Engagement has on Customer Satisfaction can help you calculate your return on any investment in improving employee engagement. It’s not just the right thing to do, improving Employee Engagement is the right thing to do for your business’s success.
- If you only measure Customer Satisfaction, you need to add an Employee Engagement component, and vice versa. Further, if you manage your Employee Engagement and Customer Satisfaction Measurement Programs separately, you need to bring those teams together to find ways to maximize your return on both to deliver benefits to the bottom line. You can’t look at just half the picture.
- With its demonstrated impact on customer satisfaction and all of its attendant customer loyalty benefits, you cannot afford to treat Employee Engagement as the sole domain of Human Resources. Employee Engagement is everyone’s business.
Creating a mindset that considers both the Employee and the Customer in business decisions is the key to maximizing profitability. To help you tell the story of this relationship and its far-reaching effects, Infosurv created the following infographic (Click on the image to Download):
So Marketers, bring your HR counterparts into the fold. And HR, rely on Marketing to help you maximize your impact through a better understanding of employees. Together, you will drive increased business success while improving the lives of both your employees and your customers.