the employee-customer connection Insight Newsletter No 4: 2007 Through the Looking Glass: How the Employee Experience Mirrors (and drives) the Customer Experience By Rodger Stotz, Vice President, Managing Consultant, Maritz Inc. Executive Summary In the competitive service industry, companies realize that the customer experience is a major driver of business results. And to deliver an exceptional customer experience, companies rely on their employees. Unfortunately, companies frequently have not gone the next step and created an employee experience reflective of the desired customer experience. This paper highlights the business case for employee engagement, looks at the customeremployee experience connection, and provides a proven approach to create and continuously improve it. In this hyper-competitive business environment, marketing executives face the unrelenting challenge of creating the expectation and monitoring the delivery of an exceptional customer experience. Unfortunately, this challenge is often not shared by the rest of the organization to the degree required to make the brand promise a reality! Often, the inextricable connection between employee-customer experience interactions is not fully understood and appreciated. What we are seeing is that the mutual influence that these two have on each other goes a long way toward determining the extent to which an organization can develop or sustain relationships with either constituency. In fact, brand promises which fail to leverage a solid understanding of the customeremployee experiential connection are doomed. Through the Looking Glass Choice, Experience, Loyalty One starting point is to view the customer and employee through the lens of choice, experience and loyalty (Figure 1). This model has been used to study customers for some time. Recently, Maritz has added a parallel view for employees. Customers and employees both have choice, experience, and loyalty interactions with the company. Each person, customer or employee, determines if they will become loyal based on their choice of the service/product/company, and their subsequent experiences. Similar to customers, employees have choice where to work, how much effort to apply, and whether to persist on task. And like customers, employees make choices based on the brand and their (work) experiences. Whether loyalty is achieved is determined over time based on these ongoing experiences. Page 1
Figure 1 Employee-Customer Continuum Customers Employees Choice Brand image and reputation attracts customers Brand image and reputation attracts the best talent Experience Promise and delivery are consistent Have what they need to consistently meet or exceed expectations Loyalty Customers return repeatedly and recommend to others Top talent is retained; employees act as advocates is in actuality the brand reality? The answer lies in two necessary and complementary steps: one strategic and one tactical. The strategic focus is on creating organizational alignment with, and focus on, the brand promise. We term this internal branding. The tactical focus is on the dayto-day delivery of the customer and employee experiences, and to make this real we need to understand our customers, and enable and motivate our employees. The Employee Customer Connection In support of this employee-customer connection we see a growing body of research. Two recent studies from the Forum for Performance Management and Measurement found: There is a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance Employee satisfaction is a key antecedent to employee engagement Organizational culture is another significant driver of employee engagement, where employees must be expected to cooperate and work together, but also to take charge and provide a voice for the customer within the organization Organizations with engaged employees have customers who use their products more, and increased customer usage leads to higher levels of customer satisfaction It is an organization s employees who influence the behavior and attitudes of customers, and it is customers who drive an organization s profitability through the purchase and use of its products So if this interaction is so critical, what must we do to address it and make sure the brand promise The logic is inescapable: organizations cannot deliver an exceptional customer experience without clarity on what the customer expects and values. Likewise, employees cannot provide this expected experience without organizational support environment, resources and leadership. Employees cannot be expected to provide a caring and sensitive experience, for example, if their work experience is highly authoritarian, controlling, and/or insensitive to employee needs. This has been verified by recent research on customer experience and employee engagement. The research has shown that customer experience enablers/inhibitors as perceived by employees predict employee engagement and customer satisfaction. The top two key factors identified by this research were readiness and ability to do the job, and enjoyment of and fulfillment from my job and company. In some cases, employees do not have a firm understanding of what the customer expects, however more frequently, the employee is not empowered or provided the required resources to deliver the required customer experience. In fact, key elements of the employee experience that impact the customer experience are often not known, overlooked or misunderstood by Page 2
management. So how do we deliver an exceptional customer experience or take the current experience to the next level? We have found this requires two critical steps, one strategic and one tactical: Strategic: Creating the alignment and linkage between the customer experience, employee experience and the supporting leadership/ organizational practices Tactical: Providing a continuous improvement process that creates understanding, enables change and motivates employees The Strategic Step: Alignment and Linkage The process of creating alignment and linkage, often referred to as internal branding, involves: Clarifying the brand proposition, or promise of value to customers Translating the brand character into values and behavioral practices-both for employees and company leaders Analyzing current practices (including human capital systems) to determine their compatibility and alignment with the brand promise While a full description of this process is not possible here, the output of one significant element of this process translation and linkage is shown in Figure 2. This example of one company s use of internal branding demonstrates how they translated from the outside and aligned from the inside. Figure 2 ABC Company Translation of and Alignment to the Brand Promise Key Leadership Practices Pulling together Driving value creation Inspiring others Developing future capability Straight talking Sharing power and responsibility External and internal focus Align Create an employee environment where people feel Challenged and supported Passionate and committed Capable and creative Credible and resourceful Trusted and informed This company began by clarifying its brand promise and then working from the outside in, translating their promise into what this meant to the customer. Specifically how the customer experience would feel when the company delivered on its brand promise human, passionate, powerful, experienced, and intelligent. This customer experience was then translated into the employee experience and leadership practices required to deliver the customer experience. The organization then worked from the inside out engaging and aligning first the leadership and then the employees with the desired customer experience attributes. This strategic step recognizes that the employee and customer experiences are two sides of the same coin and prepares the organization for the on-going, continuous execution of the customer experience process. Which delivers a customer experience HUMAN PASSIONATE POWERFUL EXPERIENCED INTELLIGENT Translate To match the brand promise ABC Co. will always help you make it happen. Page 3
The Tactical Step: Understand, Enable, Motivate Once the organization is engaged and aligned, the next step is to embed a continuous customer experience improvement process. This process is based on the voice of the customer and employee input, internal support, action planning, and appropriate reinforcement. Stated succinctly: Understand, enable and motivate. Figure 3 on each customer action item is related to performance on each employee action item. Figure 4 illustrates the results of combined analysis of VOC and VOE and the resulting relationship among targeted employee and customer action items. In this case, three pairs of highly related employee and customer action items have been identified. For example, not only has have tools to do the job been identified as an employee action item, but it is directly related to customer perceptions of the employees knowledge of products and promotions. Figure 4 Customer and Employee Key Driver Empowered to do the job Employee Key Drivers Have tools to do the job Company listens to and cares about employees Willing to respond quickly to problems The understand process captures the voice of the customer (VOC) and voice of the employee (VOE), and then creates a combined picture as follows: Identify customer action items pinpoint key drivers of customer satisfaction and loyalty in need of improvement (based on customer feedback) Identify employee action items pinpoint key drivers of employee satisfaction and engagement in need of improvement (based on employee feedback) Link the employee and customer action items establish the extent to which performance Customer Key Drivers Treats as valued customer Knowledge of products and promotions Identification of customer opportunity areas and related employee opportunity areas sets the agenda for the next phase. During this phase, we enable each business unit to continuously improve by providing the data and pinpointed areas of opportunity, tools and techniques to address the right issues, develop and implement the most effective solutions, and monitor results. Page 4
As the action plans are implemented by the employees and results are achieved, the employees need to be acknowledged for the improvements. It is here that we address motivation. Frequently, employees are not recognized for their improved performance or their incentives, if available, are poorly aligned with the local customer experience. Employees need to feel informed, empowered, involved, reinforced and valued, and as such, the employee experience is impacted by all three phases of the continuous improvement process. It is this tactical execution of understand, enable, motivate that brings to life the strategic align the organization, and create a process to continually improve the employee and customer experience. Companies that understand how the customer and employee experiences are mirror images of each other, and have the strategy and tactics to make these experiences real, will be the winners in the marketplace! 1. Oakley, PhD., James, Linking Organizational Characteristics to Employee Attitudes and Behavior A Look at the Downstream Effects on Market Response & Financial Performance, 2004 Oakley, PhD., James, Road to an Engaged Workforce, 2005 This article is reprinted from Maritz Research Forum, Vol 19, October 2006. Achievement Awards Group is a Maritz Associate Partner alignment and translation of the brand promise, which in turn creates a customer responsive employee experience. Summary Like customers, employees are a dynamic population. They have evolving generational, lifestyle and societal needs. And as we have addressed above, having an experience that meets their needs is important to delivering the customer experience and creating their loyalty to the company. The good news is that companies, which view customers and employees as reflections of each other, are realizing the value of focusing on the experience of both populations. This leads them to translate their desired customer experience into internal requirements, For more information About Achievement Awards Group Achievement Awards Group (Pty) Ltd Tel No: 021 700 2300 Email: info@awards.co.za Website: www.awards.co.za Achievement Awards Group delivers customised, full-service incentive and performance improvement solutions. We help companies motivate, reward and recognise employees, business partners and customers. Page 5