14 March 2014

How employee engagement impacts the customer experience

Engaged employees are a great asset for companies, especially in relation to delivering great customer experience (CX). In a webinar (2012), customer experience transformist Bruce Temkin (of the Temkin Group) and chair of the Customer Experience Professionals Association (CXPA.org) explains how companies with superior customer experiences and loyal customers deal with the engagement of their employees.

In a report from the Temkin group which was presented in the webinar, the correlation between employee engagement and customer experience was outlined. Some detailed findings of the research are as follows:

It appears that the engagement of employees is absolutely essential to any CX effort in an organization. Unengaged employees simply don’t create loyal customers.

Only 7% of the British and American companies researched indicated that they are leading in customer experience within their industry. However at least 59% of them want to be delivering the highest-ranked customer experience in the next three years. This indicates a high level of ambition on improving CX.

The report further outlines the business impact of customer experience and describes the deep correlation between CX and customer loyalty.

The research data shows that companies CX and loyalty are closely intertwined. In fact, CX leaders have 20% more loyal customers than CX laggards.

Bruce Temkin identified four core competencies companies need to focus on for improving their customer experience: (1) purposeful leadership, (2) compelling brand values, (3) customer connectedness and (4) employee engagement (meaning employees are committed to the success of the company). In general, however, employee engagement is the weakest CX competency.

In his “Employee Engagement Virtuous Cycle”, Temkin shows that engaged employees lead to great CX, which in turn results in loyal customers, and finally strong financial results. Simultaneously, loyal customers create prouder employees, and strong financial results create the possibility of investing further in those employees. And lastly, engaged employees lead to lower turnover, contributing positively to the bottom line.

But as companies get bigger, the level of engagement frequently goes down. But the more contact employees have with customers the more engaged they are. Therefore, frontline employees are the most engaged.

According to Temkin, three things constitute employee engagement: (1) understanding the overall mission of the company, (2) asking for employee feedback and acting upon their input, and (3) providing employees with training and tools to be successful.

Comparing CX leaders with CX laggards shows that leaders put more efforts into improving the work environment for their employees and making the company culture more customer-centric. Highly-engaged employees are fully committed to helping their company succeed.

To conclude, customer experience continues to be a growing focus for businesses and their employees, and investing in employee engagement helps tremendously.

Source: “How Employee Engagement Impacts the Customer Experience” (Root Inc.)

Customer experience (67), Digital strategy (22), Employee experience (5)