“Happy employees lead to happy customers.” You’ve probably heard this one before several times, but to what extent is this true?
Let’s use an example to understand this:
Say you’re staying at a hotel for a few nights, and you want to request a room switch, more towels, or room service. As a hotel guest, you anticipate that your requirements will be met immediately. So you make a quick call to the front desk and let them know what you want. And guess what, you get greeted by a grumpy employee at the door, only after a couple more follow-up calls, who brought just one towel instead of two and a plate of a lukewarm, tasteless plate of food.
Experiences in hotels are usually a hit or miss based on how the employees perform. Hotels Magazine reports that 44% of the people in their survey rate hotel staff as average or below average.
Now, consider another scenario where you stop by a Starbucks to order a coffee. It’s no secret that their coffee is overpriced, yet you find yourself there every other day. This can’t be just because of a good cup of coffee. You’re paying a few dollars extra because you get an upgraded experience when you’re greeted with super-friendly faces.
Starbucks boasts nearly cult-like dedication from its consumers, who are prepared to pay more for an identical cup of coffee at a different establishment that may be right next door. Some have even called Starbucks “The King of Customer Loyalty.”
So what’s the difference between the grumpy employee at the hotel and the cheery baristas of Starbucks that deliver all the Super C’s of Customer Service?
Here’s the secret: Starbucks’ unparalleled dedication to its customers is not a fluke. Starbucks’ upper management understands that its front-line workers are the key to maintaining happy and loyal customers in the service business. So they engineered the business model and culture intentionally to keep the employees happy, engaged, and satisfied first!
In fact, Fortune magazine ranked Starbucks as the 47th best workplace, and the company has one of the lowest attrition in the fast food business.
So, to answer the above question: Yes, happy employees do really lead to happy customers. But let’s make this clear, it’s not just happy, satisfied employees, but:
- happy
- satisfied
- and engaged employees.
In this article, we’ll explore the difference and dig into the connection between employee engagement and customer experience in detail!
The Impact of Employee Engagement on Customer Service
Organizational initiatives aimed at enhancing employees’ well-being, growth, and happiness tend to have a significant impact on employees’ levels of engagement with their jobs. When employees are engaged, they give their complete attention and energy to their jobs.
Employee engagement refers to the level to which workers are:
- invested in their employment,
- loyal to the company,
- and willing to go above and beyond in their efforts.
With solid research, it is concluded that employee engagement can have a direct impact on customer experience and the success of any business. Studies show that when a business has engaged workforce:
- there is a 22% increase in profitability
- and a 21% increase in productivity.
These two metrics have an immediate effect on:
- the standard of the company’s output
- and by extension, the happiness of its customers.
There is a distinction between employee satisfaction and employee engagement. Happiness in one’s professional life is one definition of satisfaction. It doesn’t take into account:
- how invested they are emotionally, mentally, or physically or
- how engaged they are.
Some workers consider themselves satisfied if they can get by with the bare minimum of effort required to maintain their salary.
Employees perform better and show great results for a business when they are engaged. These employees:
- don’t mind staying late if it means resolving a customer issue or making a transaction.
- help foster an environment where outstanding service is the norm.
- because the outcomes of their work are their own, and they take responsibility for them.
- follow through on their promises both inside and outside the company.
- care deeply about making the client happy.
By now, you know the impact of employee engagement on customer service and how engaged employees (not just satisfied employees) attribute to better performance of the business. Let’s see how customers can be influenced by employee engagement.
How Can Customer Experience be Influenced by Employee Engagement
Your employees want to feel like you’re invested in their progress and growth. Even your customers will be sure to notice when you do that. For example, if your goal is best things to sell on Ebay, you should not only do competitor’s analysis and see what works best in such niche. The very simple step to connect customer and employee without them knowing – do a questionnaire of your employee’s shopping habits and ask what they would pick as the best things to buy on Ebay, later on switching that into things to sell. Who knows, maybe their most loved items will be Spotify merch, or laptop cases – you will know if you will do such analysis. In fact, that’s another secret behind Starbucks’ mind blowing customer loyalty and satisfaction.
It’s the way Starbucks treats its employees that drives consumer loyalty by 87%. A poll from 2014 found that patrons like Starbucks in part due to the way the company treats its staff. Studies show that Starbucks’ generous employee perks, such as medical coverage (even for part-time personnel) and tuition subsidies, are appreciated by the company’s clientele.
Additionally, executives in customer service make decisions that make the employees feel cared for when they take efforts to understand:
- what it’s like to work for their company and
- what motivates the employees.
And guess what? When you care for your employees, your employees care for their job and invest themselves in them. People who are invested in and have agency over their work are more likely to invest in the company’s consumers. By doing so, leaders and staff members alike are also able to trust one another and their actions.
Bruce Temkin from Qualtrics showed in a 2016 study that companies with high customer satisfaction ratings also had 1.5 times the employee engagement compared to those with bad ratings. This is why we say that managers can gain insight into how consumers perceive the company by measuring employee happiness.
The other side of the coin is nearly as unpleasant. If you don’t care about your staff, they won’t care about their work, nor your customers.
Forbes quoted Robert Tas, chief marketing officer of Pegasystems, as saying that one of the biggest challenges to providing excellent customer service is that workers may feel misaligned between how the firm treats them and how they are required to treat customers.
The lack of communication between management and employees is a common source of tension in the workplace. Leaders may make things worse by making choices in the absence of employee input.
According to the 2023 Quiet Quitting Study, over half of customer success employees resign or are seriously contemplating quitting due to excessive workload, problems with management, or low compensation.
Why Employee Engagement Should Be Improved to Make Customer Experience Better
Successful businesses rely heavily on their customer service departments because, without them, they would quickly begin to lose customers. And the quality of service provided to customers is the major metric to determine their success. But we already established that employees are less likely to go above and beyond for their consumers if they aren’t fully invested in their work.
Customers are 233% more loyal to businesses that actively engage their workforce. A study detailed the economic benefits that may result from employee engagement and how a deliberate approach to enhancing the employee experience can yield improved customer service. The research highlighted how a more engaged workforce may positively affect:
- customer retention and
- customer satisfaction.
To back these claims, it found that organizations that participated in employee engagement initiatives had a 26% higher year-over-year sales growth than those that did not.
The engagement of employees has both direct and indirect effects on the quality of service provided to clients. Investing in your staff is the first step towards:
- a thriving team
- a prosperous company
- and satisfied clients.
In fact, in light of the present atmosphere, your company’s future success may be jeopardized if you do not immediately implement a strategy to prioritize the employee experience.
How to Improve Employee Engagement to Make Customer Experience Better
Improving employee engagement starts with knowing how engaged your company’s employees are. Employee engagement may be gauged in various ways, but common metrics include:
- measuring levels of work satisfaction
- dedication to the company
- and attrition.
You can choose to implement a new engagement program only when you have data to evaluate the above. The attrition rate, or the frequency with which workers quit their positions, is highly indicative of how content those workers are with their work. One way to determine turnover rates is by finding out how often you hire.
The next step is to determine why most people quit. You may have the problem pointed out if in any case, your answer to this question is either:
- differences with management or
- transitioning to a better and higher-paying opportunity
In fact, the above-mentioned Quiet Quitting study shows:
- When employees had better career outlooks, 40% of them would stop quiet quitting.
- If there was more backing from upper management, 48% of employees would not quit.
Through preliminary, anonymous employee surveys, you may set a benchmark for participation rates. This step has to be taken before any employee engagement program can be put into action so that results can be measured.
You can move on to implementing an employee engagement program only after you get an understanding of:
- how often do your employees choose to quit,
- why do they do so,
- and how eager your current workforce is in participating in the activities of your company.
It’s not simple to get people fired up for their job again, but it is possible. Improve employee participation by implementing these strategies in your program:
- Create opportunities: Disengaged workers are more likely to be those who are unhappy with their current situation at work. Provide opportunities to learn new skills and advance their careers, allowing for room for improvement and growth.
- Give recognition and reward: When it comes to boosting morale, a little appreciation and recognition can go a long way. Acknowledge when an employee does their job well with words of praise, gifts, or other tokens of your gratitude.
- Encourage communication and connection: Employees should feel comfortable approaching their supervisors with questions, comments, and suggestions. Encourage constant two-way dialogue between upper management and employees.
- Include them in the business: Meetings, questionnaires, and implementing a suggestion box system may all serve as avenues for employees to express their opinions and thoughts and suggestions to management.
Creating a custom solution that’s tailored to your employee’s specific performance problems could be easier than you think. When taking a holistic approach, you may streamline efficiency and eliminate engagement gaps in situations by:
- Setting Key performance indicators, such as how often they stay in touch with your customers
- Maintaining an individual performance file for each employee with problems and solutions outlined
- Using a method of publicizing awards, achievements, and promotions in workplace spaces for motivation
- Providing feedback in a constructive manner that doesn’t put them down
- Showing your own commitment and investment to helping them change and grow
Conclusion
Engaged workers are more likely to go above and above in their work for the company, which in turn benefits the company’s customers. It is your responsibility as an employer to maintain high levels of employee engagement by providing opportunities for career advancement, recognizing employees’ exceptional performance, and assisting workers in diagnosing and correcting areas in which they may be falling short. If your business is having trouble meeting its targets for customer satisfaction, you should look into implementing a formal staff engagement program.
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