Tying Employee and Customer Measurement Together for Greater Insight

Everyone seems to understand the high correlation between employee engagement and customer engagement, but most companies don’t do anything about linking their employee and customer measurement systems. Beth Benjamin, writing in Harvard Business Review, tells the story of Hulu, who discovered that despite customers renewing their service, many did not have a positive experience of the brand. Digging into the issue revealed that some customer service reps were too aggressively pursuing renewals as an answer to the high customer churn rates facing Hulu.

Hulu developed a linked employee and customer feedback system to identify and address customer service interactions where there was a gap between customer and employee perceptions of the experience. According to Benjamin, “The linked system consisted of two short surveys — one sent to employees and the other to customers — right after a transaction. The linked system allowed for more insight into customers and managers could use the information to coach employees, to assess whether they had the right tools and resources, and to identify people with innovative ideas and leadership potential.” By connecting the two measurement systems, Hulu created a powerful feedback loop to help employees adjust their customer interactions to rapidly changing market dynamics, as well as potential impact to the bottom line. Hulu indicated that if the linked feedback system reduced churn by only 1%, the savings would generate an extra $11 million annually.

The Medallia Institute recently conducted research which included interviews with more than 25 customer experience and HR executives and a survey of frontline employees working at large companies in the U.S. automotive, financial services, retail, telecommunications, and hospitality sectors. The results indicated that “56% of frontline employees said they have suggestions for improving company practices, and 43% said their insights could reduce company costs. Yet, a third said they were surveyed once a year or less, and more than half said employers weren’t asking the right questions.”

Apparently, employees have some very important and valuable feedback to share. And while annual employee engagement surveys are great, interaction-level feedback is very powerful. So why don’t more companies take this obvious and seemingly simple step? One of the culprits might be organizational complexity. After all, for some companies to consider implementing such a system might require support from three or even more executive functions. Here are six key steps to designing a linked employee and customer feedback system:

  1. What measurement do you want to move? You have to start with your business objectives: Hulu wanted to drive a more authentic customer and employee interaction experience. That goal drove everything they did throughout designing the feedback system to determining how they would use the data.
  2. Start with the customer experience. Often, companies build separate systems within their existing organizational structure. Instead, look at the customer experience you want to influence and work backward. What are the key touchpoints within your customer experience? That’s where you need to aggregate and report the data for both customers and employees.
  3. Get your timing right. Hulu determined that data would be collected from employees and customers after each interaction. That meant that the survey had to be very short and easy to complete. Other companies also collect customer feedback on a continuous basis, allowing them to provide nearly real-time results to employees and managers. The important decision is to collect and report information at the pace at which your organization can react to move the needle and demonstrate progress.
  4. Encourage candor. Fear of retribution can often prevent employees from being completely honest and candid. Make sure that employees understand they will be protected if any retribution occurs as a result of feedback given in a survey. Moreover, protect employee – and customer – confidentiality as much as possible.
  5. Enhance quant with qual. The foundation of customer and employee experience is qualitative feedback: you need to understand how people feel. Open-end questions, text analytics, and sentiment analysis capture the emotional side of customer-employee interactions. Additionally, this sort of information is often more compelling for executives and drives them to react.
  6. Do something! Especially for employees, it is important for them to know that they have been heard and that something is being done to rectify troublesome situations. Also, this reinforces the benefit of participating in a survey and increases employee engagement.

Benjamin notes an important benefit of linking customer and employee measurement systems is that it shows senior managers a complete picture of customer-employee interactions, from both perspectives, helping them understand what behaviors — and emotions — these interactions produce. Another important benefit is to keep more closely aligned with a rapidly changing market. By identifying the actions that potentially drive disconnection between the goals and outcomes of the customer experience, linked customer-employee feedback becomes an early warning system to keep your business at the top of the marketplace.