Which comes first: employee satisfaction or customer satisfaction?

Spoken | August 6, 2011

Which comes first, employee satisfaction or customer satisfaction?

1479745_s A fascinating question. As Chief Conversation Officer at Spoken, I have Google Alerts set up for “customer service,” “customer experience” and several variations thereof. I spend a lot of my mornings skimming over inane articles and posts in which the writer claims that teaching agents to smile or a bit of extra training will make a substantial difference in the customer experience.

There is a strong correlation between employee satisfaction and customer satisfaction. It’s a symbiotic relationship; one can’t exist without the other. Above-average and excellent customer service levels can’t be achieved without engaged, empowered employees. A few training sessions, a feeble motivational contest with free pizza or a cube-decorating contest do not bespeak a pervasive corporate culture that values the experience and knowledge of its frontline agents. In the absence of a corporate culture that promotes frontline employees as empowered and valued team members, customer service will suffer.

Consider this: 40-80% of customer satisfaction and loyalty is determined by the customer-employee relationship and a one-point increase in annual ACSI score for a company is equal to an increase of 11.4% of ROI and a $654 million increase in market value of equity. Researchers have shown that the drivers of of employee engagement are satisfaction with job security, satisfaction with benefits and opportunities for promotion.

Case #1: Zappos

I apologize for trotting out the supremely obvious example, but Zappos is an excellent example with ood reason. Zappos requires that every employee, from the C-suite on down, spend a month on the phones with customers. They offer to pay their agents over $2,000 to quit training to make sure that everyone is dedicated to customer service and in it for the long haul, not just a paycheck. They empower their agents to change their workspace, their processes and even the overall culture. Maura Sullivan, the senior manager of Zappos’ customer loyalty team, said in an interview with Greg Levin:

“More than anything I think the key to retaining team members is the environment you create for them to work in day in and day out. Answering phones eight hours a day is a tough job, and we want our employees to feel engaged and empowered – and to have fun!’

Too often executives pay lip service to the idea of customer service standards without providing a pervasive corporate culture to support it. If an employee does not get the message every day that good service, initiative and creativity will be rewarded, then the company will be left with unmotivated employees who show up for a paycheck.

At Call Center Week, Jane Judd, a Senior Manager of the Customer Loyalty team at Zappos, spoke on customer loyalty. She told an anecdote of an agent who had the longest call on record: over eight hours. The staff came by to bring the agent food and drink and spell her for bathroom breaks, but she refused and stayed on the call until the customer was happy and the call ended, eight hours later. Now tell me, are your agents that dedicated?

Case #2 HCL Technologies

Employees first HCL Technologies is a global IT services company with $2 billion in yearly revenues. In 2005, the CEO, Vineet Nayar, adopted a new philosophy and even wrote a book about it: Employees First, Customer Second. A great slide deck detailing the pervasive changes to the corporate culture is posted; I encourage you to look at it in more detail. Some of the changes that HCL instituted?

  • A smart service desk for employees that raises 31,000 employee concerns each month
  • The CEO reverse blogged–posted questions to employees
  • An annual event takes strategic discussions out from behind closed doors
  • Councils to promote common interests and unleash creativity
  • Recognition for “extra mile” employees

The key to the transition was an insistence on radical transparency from the top down. A summary of the internal logic in five basic tenets, excerpted from the book (emphasis mine):

  1. Transparency ensures that every stakeholder knows the company’s vision and understands exactly how his or her contribution assists the organization in achieving its goals.
  2. Transparency helps to ensure that every stakeholder has a deep, personal commitment to the aims of the organization.
  3. For the Gen Y members of our workforce transparency is a given. They post their life stories in public domains; they expect nothing less in their workplaces.
  4. In a knowledge economy, we want customers to be transparent with us, to share their ideas, their visions for the future, and their strategies for solving core problems. Without such transparency, how can we create the technology solutions that will accelerate their growth and strengthen their businesses?
  5. The only way these outsiders [lateral hires brought on for specific projects] can get up to speed quickly and be as effective as possible is through sharing of information and complete transparency about the strengths and weaknesses of the assignment.

Vineet_Nayar The results? Attrition dropped, and now the CEO spends seven hours a week answering questions posed by employees. That is the difference between paying lip service to customer satisfaction and instituting a culture of empowerment and employee engagement: the CEO himself takes a substantial amount of time every day to engage with employees.

Companies must engage their employees if they have any hope of being competitive in the area of customer satisfaction. To differentiate the organizational brand in both market performance and financial returns, companies should take a long, hard look at their corporate culture and question their own transparency and engagement.

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