How Employee Engagement and Customer Loyalty Go Hand in Hand

It is far easier and less costly to generate more business from an existing client than it is to draw in a new customer. But you can only capitalize on your existing clients if you develop the all-important customer loyalty. Your employees are pivotal to this process.

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Every time one of your employees interacts with a customer, they are representing your brand. Even employees who don’t have direct contact with your customers play a role in building business relationships.

For customer-centric businesses, the impression employees make before, during, and after a sale is the biggest draw for repeat business. It’s fairly easy to make the connection between employees who are doing their best every day and happy customers.

How your employees behave, the language they use, the knowledge they have about your products or services, and how much they are invested in exceeding expectations, all contribute to customer retention potential.

Conversely, lackluster customer service can cost your business dearly. Disengaged workers push customers away. How? They don’t care about your business and they don’t care about your customers.  That’s why effective employee engagement is crucial for keeping your customers coming back again and again.

Why Aren’t All Businesses Investing in Employee Engagement Initiatives?

No one can argue about the correlation between employee engagement and customer satisfaction. Very few businesses manage to achieve high levels of customer loyalty without a bank of loyal, engaged employees. According to one study, companies that have more engaged workers outperform their competitors in both financial results and customer experience.

But if employee engagement is the holy grail to customer loyalty, why aren’t all businesses nailing it? According to research by Gallup, employee disengagement costs the United States $550 billion a year.

The truth is many businesses are trying. The consciousness is there. However, employee engagement is actually quite complex. Getting the best out of people requires commitment. A culture truly invested in its people needs constant nurture and investment, both financially and in management time.

Many businesses are making a stab at improving employee engagement, but initiatives are often fragmented or merely pay lip service rather than the holistic approach required.

Incentives to employees need to be more than superficial perks. Bean bags and fruit bowls don’t equate to happy, loyal employees. Great culture isn’t things. The mistake many businesses make is to focus on employee productivity as their end goal, but engaged employees go much further than simply being productive.

Employee engagement isn’t just about employees feeling relatively happy in their jobs. It’s about them feeling invested in the values of the company. It involves passion, commitment, and working towards company-wide goals.

Douglas Conant, former CEO of Campbell Soup, once said “I strongly believe that you can’t win in the marketplace unless you win first in the workplace.” Conant is a great example of a businessperson who understood the connection between happy, motivated employees, and loyal customers. Back in 2001, he began his journey to turn the company around and bring the Campbell brand back from the brink by focusing on employee engagement.

How Employee Engagement Drives Customer Loyalty

Employee engagement is all about staff being able to perform at their best each day. It requires a business culture that motivates employees to contribute to an organization’s success, while feeling an enhanced sense of wellbeing.

Employee engagement happens when conditions allow staff to reach their full potential. Engaged employees get up in the morning and think ‘great, I’m going to work.’ Customers can feel the commitment and enthusiasm from engaged employees and, ultimately, they feel looked after.

Today’s employees have high expectations of their employers and smart business leaders are hot on the trail of improving business culture and the engagement of their employees. Research has shown that highly engaged teams are more productive, more profitable, and exhibit significantly lower employee turnover.

Let’s break employee engagement down into some of the essential components and see how essential these are to customer loyalty.

  1. Ideation and Problem Solving

Your employees are your ally in problem solving and making improvements to the business. Staff on the frontline of your business will often foresee problems that you might not immediately spot.

For employees to contribute to problem solving, they need to feel safe to offer their opinions. This can only happen in a culture where fresh ideas are valued and encouraged. It’s all about trust, and building trust with your employees will permeate to your customers. Making improvements through problem solving will also be recognized.

In order for businesses to be innovative and remain competitive, they must instill a culture of creativity.

  1. Better Training

Confidence in performance at work has a huge impact on how employees interact with customers. When employees are equipped with the knowledge and expertise to perform their duties well and provide satisfactory answers to customers, job satisfaction is increased.

Competence is recognised in Maslow’s hierarchy of needs. It is hugely motivating to employees. When employees are confident in offering a brilliant service, they are in the best place to foster trust and loyalty with the customer.

Employee training significantly increases customer satisfaction. When staff are trained properly, they are equipped to confidently address potential problems, concerns, and questions.

Staff development is a step above training and is also a significant retention driver. Professional development prepares employees for positions of greater responsibility, increases the knowledge of your team, boosts employee satisfaction, helps to retain staff, and attracts new talent to your business.

Employee retention leads to client loyalty. Dealing with familiar customer service representatives helps to build trust.

  1. Technology: The Tools Required to Support Employee Engagement

There are some amazing technological tools available today that businesses can use to simplify, speed up and enhance the customer service experience. Here are some great examples:

According to HR software provider Breathe HR, the success of your company and the key to loyal customers is about how you manage your employees. A collaborative robust HR software solution can significantly add value to the employee engagement process.

Employee engagement survey software is also a useful tool and can help you to keep in touch with how your employees are feeling. Remember, engaged employees can quickly become disengaged when culture isn’t nurtured.

Piers Bishop, Co-founder of employee engagement software business, We Thrive, says there are many employee survey products on the market, but many don’t offer resources to take the necessary action to improve or act upon results, meaning a lot of employee surveys rarely amount to anything.

Employee engagement software can lever understanding and insight to enable business leaders to respond. The right software solution will offer a full suite of employee engagement solutions to help business leaders listen, review and take action.

Customer Interaction software is another useful tool designed to improve the customer experience, but it also has value for employees. Employees who are engaged in their work value providing exceptional customer service.

Employees need technology to interact intelligently and efficiently with each other and with customers. Christian Brøndum, CEO at Planday stated, “With a smartphone in everyone’s pockets, there’s a huge opportunity to create connections between employees and businesses that didn’t exist before.”

How to Win the Loyalty of Your Customers

If you are determined to offer exceptional customer service and create the very best customer experience, you have to start with your culture. A business environment of engaged happy employees will deliver the emotional connection your customers are looking for. A robust employee engagement program creates the strong foundation required for customer loyalty.

Ignore employee engagement at your peril. Disenchantment from your employees will seek its way to your customers in the end. Your employees are your biggest brand advocates. Get your employees on board and your customers will follow.

Dakota Murphey has a wealth of knowledge around customer engagement. With over a decade of experience in customer service and business growth management, she enjoys sharing her experience and knowledge through her writing. Connect with her on Twitter: @Dakota_Murphey

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