The Key to successful Customer Centricity

By Paul Aas, Loyalty Group

Research and real life cases show there's a correlation between how engaged the staff are and how satisfied, committed and loyal customers are:

  • Hænderne opA company where more than 50% of the employees are engaged, have 80% returning customers
  • A company with committed employees are more than 9 times likely to have satisfied and loyal customers
  • Businesses with more engaged employees have 51% higher productivity
  • Engaged employees outperform disengaged employees by 20-28%

Some say, "Employee engagement equals customer engagement and retention".

Heard it before? It sounds a lot like the thesis of the loyalty gurus at Harvard Business School back in the '90s, presented as the "Service Profit Chain".

Then it said, "Loyal employees create loyal customers". Today it's more diversified:

  1. Choose the right Employees
  2. Secure the business culture
  3. Develop Employee motivation & satisfaction
  4. Create engagement
  5. Get Employee loyalty that will help create loyal Customers

What is actually an "Engaged" employee?

Unfortunately it's not only a "happy" staff member, who is motivated and satisfied; an Engaged member of staff also needs to "show other qualities" Two key words here are "Affiliation" and "Effort".

"Affiliation" shows how connected the employee is to the company, while "Effort" is defined as willingness/ability to "go the extra mile" for the company.

Happy, motivated and satisfied staff don't do anything wrong and perform at an expected level, but they're not "Engaged". While these employees are often driven by "personal" motives like remuneration, personal job-satisfaction and status, an "Engaged" employee will work towards bringing the business forward to the next level asking, "What's in it for us?"

How to develop "Engaged" loyal employees and make them into company "Ambassadors"?

Already in the recruitment phase employees should be identified as potentially highly engaged and loyal. Many leaders of successful Customer Centric companies such as Disney, Virgin, Metro Bank, Southwest Airlines and others state that part of their success is that they "Hire people for attitude,- and train them for skills"

Companies that have succeeded to develop highly loyal staff have followed much of this "recipe":

  1. Build a Climate of Trust - That Works Both Ways
  2. Train, Train, Train and Cross-Train
  3. Make Sure Each Employee Has A Career Path
  4. Provide Frequent Evaluations and Reviews
  5. Seek To Inform, Seek To Debrief
  6. Recognize and Reward Initiative
  7. Ask Employees What They Want
  8. By All Means, Have Fun
  9. Hire The Right Employees In The First Place

(Kilde: J. Griffin/M. Lowenstein: Customer WinBack, 2002)

This is not done over-night, and most importantly: Demand that there is a culture rooted in the visions and values stating the company's Customer Centric strategy. 

For further details about building a Customer Centric Culture see Becky Carroll's article.

Engaged and highly loyal employees will act as "Ambassadors" for their company; not only towards potential new colleagues, but also towards customers.

"The Employee is the brand or the company" as one successful business leader stated. So in every business that focuses on Customer Centricity (and who shouldn't!) it is essential to develop and grow "Ambassadorship" among staff.

"Ambassadors" may be identified through metrics like eNPS and Employee Loyalty Matrix.

"Show me the Money"; - The ROI in Employee Engagement

As a twist on the earlier mentioned Harvard model some call it the "Engagement-Profit Chain":

  • Engaged Employees lead to…
  • higher service, quality, and productivity, which leads to…
  • higher customer satisfaction and loyalty, which leads to…
  • increased sales (repeat business and referrals), which leads to…
  • higher levels of profit, which leads to…
  • higher shareholder returns (i.e., stock price)

A leading CEO once said, "To win in the marketplace you must first win in the workplace."

Good luck with your Employee engagement work.

More information about Employee Engagement

For more information about employees, customers and loyalty please get in touch with Loyalty Group.

Also have a look at these interesting articles by Colin Shaw and Michael Lowenstein of Beyond Philosophy:

Connecting Employee Loyalty with Customer Loyalty