Two-way street: Employee engagement impacts the customer experience journey

A company’s employees are often its biggest, and most important, investment. Millions are spent hiring, training, and retaining service-oriented team members. Because when companies differentiate on service—with engaged employees providing loyalty-inspiring experiences to customers—they see big rewards.

Engaged employees help create highly satisfied and loyal customers. And highly satisfied, loyal customers lead directly to growth in sales and profits.

That progression is called The Service Profit Chain. It’s a concept that was developed at Harvard Business School by a group that includes one of our company’s cofounders, Len Schlesinger. But The Service Profit Chain isn’t just an academic theory. When put into practice, it has a pretty significant impact on financial performance.

For instance, locations with highly engaged employees have lower turnover than less engaged locations in the same company. That means those locations don’t have to spend as much time and money hiring and training new staff. Overall, lower turnover has a big impact on the bottom line—sometimes netting out to millions of dollars in savings.

And it doesn’t stop there. Locations with highly engaged employees have more highly satisfied customers, and those customers are more likely to recommend the business to others—5% more likely.

More highly satisfied customers making more recommendations leads to increased sales. Locations with highly engaged employees average comp sales 2% higher than their less engaged counterparts. That’s what sound theory looks like in practice.

But in order to get these results, brands need a system in place to continuously measure the employee experience (EX) and get to actionable insights that drive meaningful change. 

What to look for in an EX solution

Understanding the employee experience helps you uncover the soul of your organization, and how you can leverage that soul to inspire productivity and help employees reach their full potential. To do that, you need an EX program that identifies the aspects of your environment that drive employee engagement, as well as provides insights and tools for improvement.

But not all EX solutions are the same. State-of-the-art programs that help your brand get to business-impacting outcomes will do these 3 things:

1) Measure across all employee milestones—and the moments in-between
In order to get a holistic view, brands need an EX solution that is designed to impact every stage of the employee journey—from the first interview to the last day. Combining core surveys with onboarding, exit, and intermittent pulse surveys, you will have the tools you need to drive engagement, loyalty, and sales.

2) Provide intuitive reporting + analytics technology
Many software as a service (SaaS) companies dedicate minimal resources to analysis support and insight delivery—meaning you could end up with a bunch of data that just has you scratching your head. In order to really understand your employees, you require powerful, scalable technology that provides a holistic view of feedback data and an intuitive reporting platform.

3) Deliver insights that drive change
In addition to providing a comprehensive tech stack, a top-notch EX program will help your brand turn employee feedback data into actionable insights. You need a team that understands your business objectives and can marry those with client industry expertise to design a tailored employee program that best fits your needs. The best results come from strategic partnership—one that keeps pace with the evolving needs and desires of your employees.

The best-performing companies prioritize employee engagement

The linkage between a truly engaged workforce and better financial performance is clear and consistent. That’s the reason SMG is focused on continually advancing our employee experience solution. By combining a robust technology platform with industry-leading professional services, our solutions drive positive business outcomes and help brands focus on the most important aspect of their company—the people.

To learn more about how we help brands drive employee engagement, download the report: Five things we learned from talking to one million employees.