Op-Ed: Why the link between employee & customer experience is key to increasing profits
Monique Richardson: Improving the employee experience and aligning it to customer experience must be a priority because poor customer service is estimated to cost businesses $75 billion per year
There is a critical link between the employee experience and the customer experience. Poor employee engagement worldwide has been estimated to cost around US $7 trillion in lost productivity.
The level of engagement is determined mainly by the employee experience. And poor customer service is estimated to cost business $75 billion per year.
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In hospitality, customer experience and employee experience are inextricably linked and understanding this link is key to increasing profitability.
Everyone benefits when they have concurrent attention – the employee, the customer and the organisation. Employee and customer experience have never been more aligned. Each is vital to the organisation’s success; if one area is lacking, the other will ultimately suffer.
With employee talent and retention top of mind in our changing world, improving the employee experience and aligning it to customer experience must be a critical priority for every organisation in every sector.
While the disciplines of employee experience and customer experience have continued to gain traction over the years, they are not new. The Service Profit Chain was first proposed in 1994 by Harvard Business School experts James L. Heskett, W. Earl Sasser, and Leonard A. Schlesinger. The model links employee satisfaction to customer loyalty and profitability and focuses on the following:
Internal service quality
This is where all service quality begins. Recruiting the right people, providing them with training, recognising their efforts, empowering them and ensuring they have the tools and technology to serve the customer and perform their role. It enables customer satisfaction and the creation of customer-focused cultures.
Employee satisfaction
When team members are happy at work and are appropriately supported and motivated, their level of satisfaction and engagement increases. Happy teams ultimately create happy customers.
Productivity
Satisfied, well-trained team members are far more likely to be productive. They have the knowledge, skills and confidence to do their job well and are more willing to go above and beyond for the organisation and its customers.
External service value
Organisations can retain talent and knowledge when the team member is engaged and feels valued. The team is more productive and satisfied, which inevitably brings more value to the customer.
Customer satisfaction
Customers are ultimately more satisfied when they receive service designed to meet their targeted needs.
Customer loyalty
At the highest levels of customer satisfaction are loyal customers. These are your advocates, your brand ambassadors who will refer you to friends and family, leave positive reviews, and purchase more.
Profit and revenue
At the end of the service-profit chain are profit and revenue. These grow as the number of loyal customers increases.
This model has never been more relevant and applicable. Denise Lee Yohn wrote in Harvard Business Review that ‘Customer experience and employee experience are now two of the driving forces of business. Independently, each function leads to valuable relationships — with customers and employees — but when CX and EX are managed together, they create a unique, sustainable competitive advantage.’
In for-profit organisations, this contributes to increased revenue, and companies with highly engaged workforces are 21% more profitable than those with poor engagement. Companies with quality employee experience outperform Standard & Poor’s (S&P) 500 by 122%.
The best workplaces are those that care for employees and customers.
The hospitality company Marriott International has a long-standing tradition of ‘doing whatever it takes to take care of the customer’. It executes this tradition through a strong focus on its employees, whom it refers to as ‘associates’.
This deeply held belief remains the keystone of the company’s culture and is summarised in the words of its founder, J. Willard Marriott. ‘If you take care of the associates, they’ll take good care of the customers, and the customers will keep coming back.’
Importantly, employees and customers desire positive emotions that drive loyalty and retention.
So much of the employee and customer experience is about how we make people feel. And ultimately, where do profit and revenue begin? It all starts with internal service quality and the employee experience.
It is in the interests of service leaders to focus on both the customer and employee experience. According to Gartner, by 2024, organisations providing a total experience will outperform competitors by 25 percent in satisfaction metrics for both CX and EX.
Ultimately when employees are engaged and highly satisfied, the result is increased employee and customer retention, deeper customer connections and elevated customer experiences. By investing in the well-being of both employees and customers, businesses can unlock the true potential for long-term success and growth.
Find out more about Monique Richardson HERE
Monique Richardson, author of ‘They Serve Like We Lead – How To Take Care Of Your People So They Take Care Of Your Customers’ a service leadership and customer service expert. Monique is a highly sought after global speaker and trainer who is obsessed with transforming customer service cultures through a service leadership driven approach.
