Does your company understand how your employees directly and indirectly contribute to optimizing your Customer Experiences, and, in so doing, enhance their own experiences as employees?
As employees, are they:
- loyal to the organization?
- Committed to the success, goals, and objectives of the organization?
- Proud to work for the organization?
- Emotionally positive about, and connected to, the organization?
- Active, positive informal communicators on behalf of the organization?
Can your company also say how likely they are to still be employed there in the next year, and how likely they are to contribute to CX and customer value?
Great! Terrific! Or, as my British pals might say, brilliant! According to many HR consulting and training organizations, that makes your employees aligned and engaged (though not necessarily productive). Maybe they are also satisfied, even happy, both short-term and tactical states of mind for an employee.
So, some quick, but highly critical, questions arise. Are fit, alignment, and productivity, the classic definitions of engagement and of employees as costs, enough to create a true advocate that helps optimize customer experiences and perceived value? Is this behavior in (or shouldn’t it be) central to every employee’s role and’s job description? Why is providing optimum customer value every employee’s responsibility? The quick answer to all these questions is: Because it’s the smartest, and most customer-centric, productive and profitable, thing for any enterprise to practice. But there are several more good reasons.
Thoughts & Ideas
Given this summary, let’s now look into the reasons why we think this is the case.
The powerful link that exists between employee attitudes/behaviors vis-a-vis brand perceptions, customers and customer experience.
There have been a number of professional and academic studies, in multiple industries, linking employee attitudes and behaviors with the value customers perceive in their experiences. Through targeted research, and resultant training, communication, process, and reward and recognition programs, what we define as advocacy formalizes the direction in which employee engagement has been trending and evolving for years.
Simply, the trend is optimizing employee commitment to the organization and its goals, to the company’s unique value proposition, and to the customer. This, along with positive vocal support and emotional connection, is employee advocacy, a state where all employee roles are focused on, and tasked with, delivering customer value as part of their job description, irrespective of location, function, or level.
In other words, though there needs to be coordination and management of initiatives through HR and a CXO/CCO, everyone in the company, from the file clerk to the CEO, has (or should have) this day-to-day responsibility embedded within their roles and job descriptions. So, while the advocacy research framework, which, for example, we use to identify the degree of linkage between employee attitudes/behavior and customer behavior, does include questions on job satisfaction and belief in the organization, the core is about specific employee behaviors and a set of beliefs based on experience as a staff member.
Focus on advocacy creates the same positive financial and employee behavior results as focusing on, and executing, brand and customer experience improvement.
This is a classic chicken-and-egg question, i.e., does focusing on the employee generate as much benefit for the organization as enhancing the customer experience; and there is ongoing debate about which should be the priority. Several entire books, in fact, have been written on this important subject (such as The Customer Comes Second by Hal Rosenbluth and Diane Peters, and Firms of Endearment by Sheth, Sisodia, and Wolfe), and later related books like Conscious Capitalism and Everybody Matters.
There is general agreement that both developing employee advocates and customer advocates should receive high priority and emphasis if an enterprise is going to be successful. What building advocacy does mandate, however, is that having employees focus on the customer will drive more positive experiences and stronger loyalty behavior among customers, and more commitment and loyalty among employees.
As noted above, employee engagement is principally about fit, productivity and alignment, which considers employees as costs to be controlled, and tells an organization little about level or degree of customer-centricity and/or stakeholder-centricity. More connection between employee’s behavior and customer behavior helps build cultural focus as well as positive business outcomes.
“Linkage Challenges Between Employee Engagement and Customer Behavior”
An article by a major employee research and engagement consulting organization from a few years ago led with the above headline. They were reporting on results of their national workforce tracking poll, the highlight of which was that employee engagement had risen 1.2% between January and February 2015 (to 32.9%) and that this new level was the highest engagement rate reported in the past three years.
The consulting organization went on to conclude from these findings that
“Recent trends suggest that improvements in engagement coincide with improvement in unemployment and underemployment.”
with the summary statement:
At best, this conclusion feels like a major s-t-r-e-t-c-h of correlation analysis results vs. causation, and the worldwide pandemic has made this focus on engagement even less relevant.
Employee engagement as a leading indicator of future business success?
This same organization believed that “Employee engagement is a leading indicator of future business success”; and, to the degree that engagement level can impact staff turnover and productivity, both key contributors to profitability, this is a fair statement. However, when this organization, and others in the employee engagement research, training and consultation space, makes claims that engagement, in and of itself, contributes to customer value and loyalty behavior, two important questions need to be asked.
Those question are:
2) Where’s the consistent proof for individual companies?
Just as satisfaction has historically had little proven connection to customer behavior, employee engagement was not specifically conceived or designed to drive customer behavior. To build on this statement, let’s begin by looking at the results of satisfaction on downstream customer action.
Beyond extremely macro connection to sales, customer satisfaction (as expressed through the ACSI) has been shown to have little direct connection to purchase behavior, to the tune of 0.0% to 0.1% correlation. Many companies are still measuring customer sat in hopes that learning about its drivers will help build customer loyalty, but satisfaction isn’t contemporary regarding decision-making or reflective of what is going on in the customer’s real, emotionally driven world.
Key drivers of engagement
‘Employee engagement’ has many meanings and interpretations, but relatively little of it has to do, again by conceptual definition, specifically with impact on customer behavior. Thorough analysis conducted by The Conference Board in 2006 showed that, among twelve leading engagement research companies, twenty-six key drivers of engagement could be identified, of which eight were common to all:
- Trust and integrity – How well do managers communicate and ‘walk the talk ‘?
- Nature of the job – Is it mentally stimulating day-to-day?
- Line of sight between employee performance and company performance
- Do employees understand how their work contributes to the company’s performance.
- Career pathing opportunity – Is there positive movement and growth within the company?
- Pride about the company – How much self-esteem do the employees feel by being associated with their company?
- Coworkers/team members – How much influence do they exert on the employee’s level of engagement?
- Employee development – Is the company making an effort to develop the employee’s skills?
Relationship with one’s manager – Does the employee value relationship(s) with manager(s), and is there trust and credibility between the levels?
Typically, there is little or no mention/inclusion of ‘customer’ or ‘customer focus’ elements either in measurement or analysis of employee engagement. Though customer experience, and resultant behavior, is impacted by engagement, it is more tangential and inferential than purposeful in nature. Perceived impact of employees on customer value delivery is typically measured by VoE, or Voice of Employee studies.
As noted, employee engagement can impact corporate profitability at the macro level (as much as three to four times higher for top-scoring engagement companies compared to those on the bottom half of companies using this measure); and that’s one of the valuable results it provides.
A major 2012 collaborative secondary research effort, Engage for Success, by the University of Bath School of Management and Marks and Spencer in the U.K. concluded, as we’ve seen with other research into the benefits of employee engagement: “As well as performance and productivity, employee engagement impacts positively on levels of absenteeism, on retention, and on levels of innovation….” So, engagement principally serves the cost-related priorities and requirements of HR.
Where customer behavior changes are reported as a result of employee engagement, they were (like satisfaction’s impact on customer behavior) also at macro and rather weak tea, incidental levels: “An earlier (2006) Gallup report that examined over 23,000 business units showed that companies with engagement levels in the top quartile averaged 12% higher customer advocacy than those in the bottom quartile.” The consistent financial impact of engagement on individual companies and their customers, i.e., on a micro and granular level, needs to be addressed, understood and reported.
-End of Part 1-