“Keep the customer happy” is a familiar adage for businesses and customers alike. While businesses aiming to drive growth often focus on improving the customer experience (or CX), many neglect to explore how the employee experience (EX) plays into the equation. In fact, research reveals a close link between the satisfaction of customers and employees (more on that in a minute). The bottom line: both greatly influence each other.
As a result, companies aiming to decrease turnover and build a positive brand reputation have begun to prioritize employee happiness and engagement. This is especially true for your customer-service agents, or any employees you count on to serve as the direct link between your brand and customers. As Zappos CEO Tony Hsieh tells his customer-service team: “Customer service shouldn’t just be a department, it should be the entire company.”
So how exactly do CX and EX influence each other? Here are 10 statistics that show the undeniable connection.
1. Companies with highly engaged workers report 20% higher sales
Gallup’s State of the American Workplace report found that employees who feel engaged in the workplace are more likely to improve customer relations, which in turn drives an increase in sales. Engaged workers are also more present and productive, making them more likely to be attuned to the needs of customers, as well as more observant of processes, standards, and systems.
In a 2017 blog post, Justworks Vice President of Customer and Employee Success Jason Whitman said the best way to ensure customer happiness is to first to ensure the same for your employees. In other words, employees who feel engaged in their role likely possess a more positive attitude toward their workplace, and in turn deliver more effective customer service.
“Happy employees are more likely to go the extra mile to help your customers out, show resilience in challenging situations, and to help your company’s profits grow,” he wrote. “All those factors result in more satisfied customers and a better retention rate.”
2. Companies that excel in customer experience have 1.5 times as many engaged employees
In a 2016 study, Bruce Temkin of Qualtrics found that companies that excel at customer experience have “1.5 times as many engaged employees as do customer experience laggards.” Similarly, Robert Tas, chief marketing officer at Pegasystems, told Forbes that the disconnect employees can feel between how their company treats them and how they’re expected to treat customers poses a major barrier for companies looking to achieve great customer service .
Essentially, the customer service experience improves when employees feel more engaged and confident in their roles.
3. CX leaders have 30% more engaged employees
In the Temkin Group’s 2017 Employee Engagement Benchmark Study, 79% of employees who work at companies with “significantly above average” customer experience in their industry consider themselves “highly” or “moderately” engaged. This compared with only 49% at companies with “average” or “below average” customer experience.
In other words, employees working for companies with good reputations and customer relations are more committed to their jobs.
By ensuring all employees understand your overall customer service goals and strategy, you provide a strong foundation for a more harmonious customer and employee experience.
4. 87% of customer affinity for Starbucks is driven by how the company treats employees
Anyone who’s visited a Starbucks has probably witnessed the coffee chain’s impressive customer service. What you might not know is that it’s also likely one of the reasons you’ve visited more than once.
According to a 2014 survey, customers enjoy Starbucks because of the way it treats its employees. In particular, its employee benefits, including health insurance (even for part-time staff) and tuition grants, don’t go unnoticed by Starbucks customers, according to studies.
Corey duBrowa, senior vice president of global communications at Starbucks, recently told AdWeek, “When employees are satisfied and engaged, the result is deeper customer connections and an elevated customer experience.”
5. Companies that actively engage employees have customer loyalty rates 233% higher than those that don’t
In their report Employee Engagement: Paving the Way to Happy Customers, Aberdeen Group outlined the business benefits employee engagement can produce and how a strategic approach to improving the employee experience can deliver better customer service.
In addition to a much higher customer loyalty rate, the report shared insights into the impact greater employee engagement can have on the customer experience. For example, businesses that invested in structured employee engagement programs enjoyed a 26% greater year-over-year increase in annual company revenue compared to companies that didn’t have these programs.
Veronika Krieg at Sharpen explains, “Most customers don’t buy from you with the intent to ditch you in a year or two. Customers only question their loyalty after a poor customer experience delivered by your agents. Engaged employees help cut pain points and make it valuable for your customers to stay put.”
It’s clear that engaged employees positively influence the buying behaviors of customers, fostering brand loyalty and paving the way for future growth.
6. Engaged teams have 24% – 59% lower turnover than disengaged teams
Not only does high turnover cost your company money, it can negatively impact your customer experience rating. Customers forced to interact with staff in training, rather than experienced employees with expertise, are more likely to have a bad experience, affecting growth and brand reputation.
Nowhere is this more prevalent than in call centers, where employee retention is notoriously low. The turnover rate for call centers usually hovers between 25% and 35%, which means companies are constantly training new employees to handle their customers’ most pressing concerns.
According to Gallup’s State of the American Workforce Report 2017, employees who engage consistently show up to work and have a greater commitment to quality and safety. So it’s much more likely that these employees also help their organizations improve customer relations. The same report showed that engaged teams have 10% higher customer ratings, 21% greater profitability, 17% higher productivity, 28% less shrinkage, 70% fewer safety incidents, and 41% less absenteeism.
7. A 5% increase in employee engagement can lead to a 3% jump in revenue
A 2015 Aon report, Build a Culture of Engagement—Make Employee Engagement Happen, explores the financial implications of an engaged workforce. The report consistently found that companies with higher engagement levels also have better talent, and better operational, customer, and financial outcomes.
The report finds that employees who fall into the “highly engaged” bracket deliver a much higher value to an organization than those who are only moderately engaged. This underlines the importance of weaving employee engagement practices into work culture––whether it’s through increased workplace benefits, agile working, better teamwork or more.
8. Happy, engaged employees are 12% more productive
Happiness makes you work harder, according to research conducted by Dr. Daniel Sgroi at the University of Warwick. “The driving force seems to be that happier workers use the time they have more effectively, increasing the pace at which they can work without sacrificing quality,” Sgroi wrote.
So why does this matter to customers? The results show that the efficiency of workers spikes when they’re engaged, resulting in greater productivity and therefore a higher level of customer service.
9. 89% of companies expect to compete primarily on customer experience
“Instead of focusing on improving overall customer experience, the main competitive differentiator will come from focusing on and improving each part of the buyer journey and customer experience,” Broadsuite Media Group wrote in 2018. “And of course, employee experience plays a role there, and companies with highly engaged employees reap the benefits of that.” In other words, with so many organizations relying on their customer experience to help drive growth, it stands to reason that those companies place a premium on employee experience, as well.
10. Companies with healthy cultures are 1.5 times more likely to report average revenue growth of more than 15%
A great work culture is more than a fully-stocked fridge, beanbags, and great coffee. A good employee experience celebrates the success of the employees, not just the success of the company, and fosters a confidence and autonomy in its workforce to carry out their jobs effectively.
At Zappos,for example, teams are given an extra $50 to award to one member who goes beyond the call of duty each month. This puts power in the hands of the employees to recognize whichever colleague they believe deserves it the most. Additionally, the company’s call center employees are fully empowered to serve customers however they see fit. They don’t work from a script and are encouraged to use their imagination to make customers happy, rather than seeking permission from a boss. With over 75% of sales from repeat customers, it seems the company’s focus on employee empowerment, rather than just office perks, is really paying off.
The facts don’t lie, employees who are able to participate in a more engaging and rewarding employee experience are more likely to deliver a better customer experience. For more information on using a collaborative contact center to interact with your customers, start here.
Originally published Jul 30, 2020, updated Jan 16, 2023