As a result, effective management of employees can have a big impact on customer retention and business profitability. Simply put, employee commitment plays a major role in delivering a great customer experience, which leads to customer satisfaction, customer commitment, and improved business performance.
The Sears case history published by Harvard Business Review in 1998 provided the first robust, empirically-based demonstration of the service-profit chain, indicative of the following:
Research shows that it is the engagement and commitment of employees towards the brand, proposition and, ultimately, to the customer, that has a large impact on business performance:
It may be customer service 101, but a warm, smiling, helpful and knowledgeable person on the phone or in the retail outlet will make a big impression - and because it's so rare, it's likely to lead to advocacy.
Employees cannot be motivated and engaged effectively until hygiene factors such as remuneration, working environment, and health and safety are satisfied. The following conditions show the strongest correlation with business results:
The most common problem for leaders trying to lead is that they are often too busy trying to manage and do. In employee surveys, employees rate their leaders through the prism created by their manager - poor management results in lack of trust in leadership. First line managers have a significant impact on employee performance and commitment. It's important to note that 70% of employees do not leave their company; they leave their manager. Great managers create great teams with loyal customers by creating a great workplace.
Marketers are increasingly aware of the proven links between employee engagement, customer commitment, retention and business profitability. But brand values must be translated into a set of guidelines that can be used by staff to manage customers. Desired behaviours should be derived from the proposition. Managers and staff need to know what behaviours they must adopt to deliver the experience - you can't expect them to guess!
Brand values must be defined as part of a shared organisational experience informed by internal and external research. These values need to be translated into behaviours with standards, developed with employees which, when delivered by employees, will evoke the desired customer experience. Employees must also understand the benefits of service quality and its relationship with customer retention.
A good employee engagement strategy includes employee involvement in developing the proposition; customer-focused leadership; powerful and ongoing employee communications through "huddles"; gaining employee buy-in before customer buy-in; and recognising employees in a relevant and impactful way.
It is vital for companies to focus on retaining their best employees; some forward-thinking companies have begun to measure employee retention according to the value/performance of the employee.
Companies need to enable staff to see how their job supports the company's objectives of value maximisation. This alignment can help to shape their behaviours and provides employees throughout the organisation with a line of sight from the high level (such as profitability), to the low level (such as cost of customer management of a particular activity).
