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Kinesis - Insights - Employee Loyalty Found In Customer Service Values


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Customer Experience Management


Author: Peter Gurney

Reprinted from the Puget Sound Business Journal
August, 2002

Puget Sound Business Journal

Employee Loyalty Found In Customer Service Values

There is an intuitive appeal to the notion that if companies focus on treating their employees well, customer satisfaction will naturally follow. This argument was put forward in the early 1990s in a book called The Customer Comes Second, and various studies conducted since that time have supported the link between employee and customer satisfaction.

A cause-and-effect scenario can easily be imagined: Customers prefer doing business with satisfied employees (as opposed to those who are bored, sullen or disgruntled); consequently customer satisfaction follows employee satisfaction. The explanation can also be flipped: Employees enjoy their jobs more and gain a greater sense of accomplishment if customers appreciate the service they receive; thus employee satisfaction follows customer satisfaction. Either way, they seem to be mirror images of each other.

While these explanations make sense, the relationship is actually a bit more complex.

Let's begin with customers. Most companies gather some sort of customer satisfaction data, whether through surveys, comment cards, panels or other channels. Whatever the industry and however the data are collected, the main causes of dissatisfaction with service are pretty much the same. These causes tend to fall into the following categories:

  • You didn't do what you said you would do
  • You were unresponsive to my complaint, question or concern
  • You don't understand my needs
  • Your staff aren't knowledgeable about your products/services
  • No one will take responsibility/initiative
  • You don't care about my business

Now, let's look at front-line employees, the people who provide service to end-customers. A common misconception is that the major cause of employee dissatisfaction is inadequate pay. While it is true that this is often among the top two or three issues, it seldom comes out as number one. Again, there are a few common issues that lie at the root of most front-line employee dissatisfaction:

  • I don't have the right tools/systems/policies to do my job
  • I don't get enough feedback/coaching/support
  • I get mixed messages about what's important
  • I don't get enough training/I don't have enough opportunity to grow and advance
  • I don't have the authority to resolve problems or create positive outcomes
  • I feel left out of the big picture/I don't get enough respect
Oh, yes, and I don't get paid enough.

Put these lists together and we see that they are two sides of the same coin:

Customers want... Employees want...
To get what they are promised The tools/systems/policies to do their job
Their problems resolved Empowerment to solve problems
Their needs listened to/understood More/better feedback
Knowledgeable employees; adequate information More training; more/better feedback
Employees to take the initiative, take responsibility, represent the company Empowerment; clear priorities; inclusion in the company's big picture
The company to value their business Clear priorities; the tools/systems/policies to do their job

Take just about any customer complaint and it is easy to see the obverse issue from the employee side. For example, customers who call toll-free service numbers commonly say they feel rushed -- that the employee is more interested in getting them off the phone than in solving their problem. They may interpret this as rudeness, but travel to the other side of the phone line and you will find a frustrated employee who is told to keep calls short and who is rewarded for efficiency rather than positive customer outcomes.

Similar scenarios are played out in every conceivable service situation, with employee and customer dissatisfaction growing from the same root causes. And this phenomenon is not confined to service interactions at the front line. Internal client/supplier relationships tend to follow a similar pattern: they are all part of a service chain that gets knotted up by the same problems.

This fact has important implications for those who conduct customer or employee feedback surveys. If nothing else, it suggests that such studies should be designed, analyzed and acted upon in parallel with each other. Unfortunately, this is seldom done. In practice these studies are generally conducted by different managers in different departments with different budgets. Employee satisfaction is typically viewed as an HR issue, while customer satisfaction tends to fall under Operations or Marketing.

Designing and conducting the two surveys together may require coordination among different functional areas of the company, but it is worth the effort. One advantage of this approach is that it provides a three-dimensional picture of the company's service landscape. When both sides of the service equation are viewed simultaneously, the solutions are clearer. Furthermore, a coordinated feedback approach is more likely to lead to real change. Both customer and employee surveys have a habit of generating reports that gather dust on shelves, resulting in little or no significant action. Combined customer/employee studies, which require a cross-functional effort, tend to create higher visibility and accountability.

Finally, by looking at both customers and employees as two sides of the same coin, the total financial effect of implementing change becomes more obvious. For example, customers may indicate a desire for more knowledgeable employees so they can make better product choices - an expensive change that requires significant investment in training. However, the customer/employee study may also show that the current training program, because of its inadequacy, has a negative effect on employee turnover and productivity. When the benefits from both the customer and employee side are factored in, the investment may seem more favorable than if only one side were studied.

As Starbucks' chairman Howard Schultz likes to point out we are all in the people business. Employees and customers are two sides of what should be a mutually beneficial relationship. If either side is badly served, the other half will inevitably feel the effect and the company's bottom line will suffer.

Peter Gurney is the Managing Director of Kinesis. A well-known customer experience management expert, Peter has worked with dozens of brand name companies, including Expedia, E*Trade, Westin Hotels, Starbucks, Microsoft and Bank of America, among others. Peter Gurney can be reached by calling 206-285-2900.

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