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Engaged employees make for more satisfied customers


Answers Corp. analyzed studies on customer satisfaction and employee engagement and found a direct correlation between the two, charted here.


Answers Corp. analyzed studies on customer satisfaction and employee engagement and found a direct correlation between the two, charted here.


By now, most company leaders are well aware of growing consumer expectations, and even industry laggards are making moves to keep up with changing demands. But when it comes to meeting and exceeding employee expectations, the status quo is bleak. 

That’s unfortunate, because your employees are consumers too—they fly on Southwest Airlines, they buy shoes from Zappos, they pick up groceries at Costco. On a regular basis, they’re interacting with brands that deliver some of the best customer experiences. But when they come to work, the way they interact with their company might not stack up to what they experience as a consumer, and the discrepancy leads to frustration. Does this sentiment then get projected onto your customers? You bet.

“There is a definite link between corporate culture and customer experience,” Shep Hyken, author and customer experience expert, says. “What’s happing on the inside is absolutely felt by the customer.” 

Companies that don’t prioritize a positive culture will have workers—and ultimately customers—who lack enthusiasm. Twenty-eight percent of employees are disengaged at work, and 45 percent are indifferent, meaning they’re neither engaged nor disengaged, a research report from Answers Corp., an online research and reference company, found. This lack of interest is disturbing not only because it points to a dysfunctional corporate culture but also because disengagement correlates with lower customer satisfaction and poorer customer experiences. 

“The degree to which employees feel emotionally connected to the company is an indicator of how they’ll interact with customers,” says Eric Feinberg, senior director of product strategy at Answers Corp. 

To measure the relationship, Answers Corp. conducted two separate studies—the Experience Index, which measured consumers’ satisfaction with popular brands, and the American Employee Study, an evaluation of sentiment among workers. Taken together, the results of the studies demonstrated a positive linear correlation: Analyzed on a scale of zero to 100, where a score of 80 or above is “considered the threshold for excellence at which an organization meets and exceeds employee or customer expectations,” companies that foster a positive corporate culture also excel in customer experience. For example, Victoria’s Secret, a top performer, scored in the 80 to 90 range in the engagement category and the 80 to 85 range for customer satisfaction. 

The correlation applies to customer service representatives, salespeople, and marketers who interact directly with customers on a regular basis. For employees not on the front lines, the effects of corporate culture on customer experience are harder to gauge, but culture still has a major impact, Feinberg says. Up until recently, little research has been conducted on the relationship between the two, adding to the reluctance of many organizations to make any substantial changes. But with the growing volume of supporting evidence, there’s no excuse for inaction, experts agree. 


The Dos and Don’ts of Building a Culture Where Everyone Wins

One of the main drivers of employee satisfaction and engagement is good leadership, Answers Corp.’s research indicates. Increasingly, employees expect to feel listened to not only by immediate supervisors but also by corporate leaders, including the CEO and CMO. Like customers, employees expect to be delighted by the company they’re interacting with and want to feel “valued and valuable,” Hyken says. But falling into a pattern of micromanagement or superficial engagement can be worse than doing nothing at all. Follow these dos and don’ts to strike the right balance.  


Do: Be Clear About Company Values 

Employees can’t deliver a customer experience that lives up to the brand promise if they don’t know what that is—and it’s up to corporate leaders to define it. Hyken recommends borrowing a few moves from the Ritz Carlton playbook. The high-end hotel chain consistently outperforms competitors in both employee and customer satisfaction, and Hyken insists that the company’s success is largely a result of its clear vision. The company credo, “We are ladies and gentlemen serving ladies and gentlemen,” is both customer- and employee-centric and marries the two effectively. 

Ace Hardware takes a different yet equally effective approach; the company’s slogan is “the helpful hardware store.” “In that short phrase, Ace is defining what makes its employees different for customers, and reminding them what is expected,” Hyken says. “Ace might not be able to compete in [inventory] with Home Depot, but it’ll be the most helpful experience a customer can find.” 


Don’t: Tie Employees’ Hands

When it comes to spelling out specific employee expectations, “don’t be too vague or too broad,” Sam Stern, an analyst at Forrester Research, recommends. Workers should have guidelines and suggestions for handling a variety of customer issues—they shouldn’t be left to improvise. But organizations should also be careful to avoid suffocating them with rules and restrictions. 

“You want to be prescriptive and specific, but leave them with enough autonomy and power to decide how to react in the moment,” Stern says. Ritz Carlton earns praise in this regard as well. Hotel employees are given a certain dollar amount to use toward customer experience at their discretion. “The staff can use those funds however they see fit. Every customer will have different needs and desires, and this policy is in tune with this reality,” Stern explains. 

Similarly, at Zappos, employees are encouraged to do whatever it takes to please customers, even if that means directing them to a competitor’s site, says Lior Arussy, a consultant at Strativity Group. “If they don’t have something a customer wants, they’ll tell them where they can get it. It’s about satisfaction, not selling a pair of shoes,” he says. 


Do: Implement the Right Technology

From sophisticated Voice of the Employee (VoE) solutions to powerful human resources (HR) platforms, there’s plenty of solid legacy technology for company leaders to choose from, but the key to exceeding employee expectations is implementing fresh technology that zeroes in on the consumer side of every worker. Salesforce, for example, recently built a partial HR ecosystem on top of its Customer Success suite—the ecosystem that’s home to its marketing, sales, and service clouds. The first release of Salesforce’s HR suite consists of four products: Employee Journeys, an “on-boarding” and ongoing management tool; Employee Communities, where employees can connect with peers; the HR Helpdesk, which links employees with the HR department; and HR Analytics, a measurement tool that enables HR staff to track employee engagement metrics. 

“When you look at customers, there’s this ‘do-it-for-me culture’ and this high level of expectation, and brands have been trying to deliver experiences to meet these expectations. But when you look at the employee experience, employees walk into their office and it’s like they’re traveling back in time. The technology is outdated,” Jim Sinai, senior director of the Salesforce AppExchange and product marketing, told CRM in April. 

By providing employees with tools built on a platform that has proven to deliver solid customer experiences, companies can start meeting some of the expectations that their workers have as technology users. Often employees are frustrated by the amount of friction they encounter with HR technology, and so it’s vital to ensure that the seamlessness they experience as customers or users translates to HR software, Sinai said.

Other vendors are also keeping the consumer side of every employee in focus. Confirmit, which offers a traditional VoE product, has recently added a tool to its suite that analyzes the conversations employees are having across social media. Employees may not be allowed to tweet or share Instagram photos while they’re at the office, but at home, they’re sharing and consuming content from a wide variety of brands, many of which are likely your competitors. 

Confirmit’s Genius Social Media product “brings social media into the mix” when it comes to determining what employees are saying about the company or competing brands, says Tore Haggren, senior vice president of Confirmit’s VoE division. “Through the Genius dashboards, corporate leaders are able to see what matters to [employees], what they find meaningful, and whether they’re sharing any frustrations online,” he explains. “It’s a great way to give the employees a voice in a setting that’s natural to them.”


Don’t: Do Employee Surveys Just for the Heck of It

There are no quick fixes to deep-seated company culture problems, so sending around an occasional survey or launching an out-of-the-blue VoE initiative feels superficial and insincere—and for employees, providing the feedback becomes a pesky chore. Unless feedback is collected regularly, it’s ineffective, because without incremental measurement, it’s virtually impossible to track improvements and other changes. “Employees laugh when company executives tell customers and shareholders how employee-centric they are when all they do is send out one survey a year,” Arussy says. 

Companies have to not only regularly collect feedback but also leverage the insights to drive employee- and customer-facing initiatives. Employees are the eyes and ears of the company—“they are your scouts,” says Chip Bell, founder of consulting firm the Chip Bell Group. The extent to which their feedback is incorporated into the company culture and processes will determine how valued and valuable they feel. “You can’t make every change that employees recommend, but putting some of the best suggestions into action is a way of telling them, ‘We need you, we hear you, and we value you,’” Bell says. 


Do: Spend Time in Employees’ Shoes

“You don’t know what employees have to deal with until you walk a mile in their shoes,” Bell says. Corporate leaders who want a true understanding of their employees’ tasks and processes should get out on the front lines, but again, the key here is consistency. Spending time on the sales floor or accompanying service technicians to sites is essential, and observing is often not enough. Leaders should man the phones at a retail call center, or stand behind the check-in desk at a hotel and interact with customers. Only then, Bell says, will they have a realistic grasp on daily operations and any particularly “sticky” aspects of dealings between customers and company. 

All Zappos employees, for example, are required to work at the call center before they climb the corporate ladder. “They pay their dues and work their way up with an insider’s perspective of how the call center operates. They know what works for employees, and what doesn’t,” Arussy says. That “insider” knowledge, he adds, makes for better-informed leaders who value the work that employees do because they’ve done it themselves. 


Don’t: Just Motivate With Money

Monetary rewards for employees can be tricky territory. On the one hand, tying employee salaries to customer satisfaction ratings makes sense—if customer satisfaction is worth only 5 percent of take-home pay, employees won’t care as much as they would if it were worth, say, 15 percent of their pay, Bell points out. When customer satisfaction is tied to salary, employees are more likely to seek out training and other HR resources that might improve the experience of the customer. 

On the other hand, however, high customer satisfaction scores shouldn’t be solely the result of financial incentive. Paying a solid salary that’s proportional to the work that’s required is crucial for making workers feel valued and valuable, but bribery is a no-no, Stern says. The desire to delight customers should permeate the company culture and should be instilled in every employee. Bonuses or other monetary incentives can be distracting and quickly create a competitive, high-pressure environment at work, he says. One way to motivate the workforce without a financial incentive is to emphasize “how heavily the company relies on front-line staff,” according to Stern. Hyken agrees: “It’s important to take time to celebrate employees and the hard work they do. Recognize outstanding employees for their efforts on a company-wide scale, be it through a congratulatory email or at a corporate event.” 

Some companies oppose the concept of bribery so vehemently that they take steps to weed out employees who are motivated by money in the early stages of the on-boarding process. Zappos, for example, spends weeks training its new hires in an intensive yet rewarding program. They’re taught the ins and outs of the company, but are also welcomed warmly, with jungle-themed cubicle decorations and a party atmosphere. At the end of the process, they’re offered $2,000 to walk away. Zappos is transparent about the on-boarding process. “They put in a great deal of time and effort exposing workers to the fun, employee- and customer-centric culture of the company. But, if the new hires don’t think the environment is for them, or they don’t think they can deliver what is expected of them, the company is happy to pay them to leave,” Arussy says. “Culture should come first and money second,” he adds.


Do: Measure Effectiveness with the Right Metrics

Because corporate culture is closely linked to customer experience, using customer satisfaction as one of the metrics for measuring employee effectiveness is critical. Too often, call center workers are evaluated on the number of calls they take per day, or how quickly calls are completed; sales associates are graded solely on how many sales they close. 

But speed and quantity are not always the best measures of success—while customers appreciate expedient service, for example, many are willing to spend more time on a customer service call if it means that their issue will be resolved more thoroughly. Plus, when it comes to sales, associates should be more concerned with whether a customer will return than with closing an immediate deal, Arussy says. “There has to be a consistency between corporate culture and day-to-day expectations. You can’t say you value your employees, and then force them to rush through interactions to meet your unrealistic expectations,” he says. Hyken puts it a different way: “Measure how many customers you delighted, not just how many you served.” 

Companies such as Southwest Airlines and prescription eyewear company Warby Parker, for example, have made customer satisfaction a core part of their employee performance review. “Their efforts have not only boosted customer experience scores, but have also driven employees to be more engaged” because they felt like they were working toward a goal, Stern says. 


Don’t: Ignore the Hiring Process

Though typically overlooked, the hiring process contributes to employees’ first impressions of the corporate environment, and as such presents an opportunity for organizations to set the relationship on the right track from the outset; it’s one of the most important interactions a company will have with its workers. “All the elements of a great culture have to be in motion long before the first day of work,” Stern says. “Hiring shouldn’t be looked at as an HR chore. It’s how you attract the best talent, so you have to put your best foot forward,” he says.


Learn from the Best, but Make It Your Own

Making even small changes to the corporate environment can be a Herculean task, especially when years of less-than-stellar culture have left employees jaded. But a cultural overhaul is worth it: According to the Answers Corp. surveys, if a company records a measurable gain in employee engagement, it can expect to see a 3 percent increase, at minimum, in annual revenue—for an average retailer, that’s about $10.8 million. 

As with any company initiative, there’s no one-size-fits-all guide to a better culture. Even Zappos, hailed by experts as a beacon of employee happiness, has made missteps. In 2013, CEO Tony Hsieh declared that the company would function as a holacracy—an environment with no titles or managers. He offered the entire staff three months of severance pay if the structure didn’t appeal to them, and nearly 14 percent of the workforce took the package. The move was a controversial one, and the jury is still out on the long-term effect of the holacratic structure on Zappos. “They want what’s best for employees so they’re experimenting. Not every experiment works, but we have to wait and see if this one does,” Hyken says. “The point is: experiment. Determine what doesn’t work, and fix it. Always keep your employees’ best interests in mind. 

“That way, you know they’ll be keeping your customers’ best interests in mind as well.” 


Associate Editor Maria Minsker can be reached at