Communication improves satisfaction for employees and therefore customers
Research consistently shows a strong correlation between employee satisfaction and customer satisfaction.
For instance, in a classic study, retail giant Sears Holdings Corporation (annual revenue around US$25 billion), found every 5% increase in employee attitude scores brought a 1-3% increase in customer satisfaction and a 0.5% increase in revenue. Good communication played a significant role in greater employee satisfaction.
An Australian survey in 2007 found similar results. Conducted by Nigel De Bussy from Curtin University, the study found that companies actively engaging in stakeholder orientation activities achieved stronger financial performance, with a correlation of 0.84 for employee programs compared with the correlation for customers (0.36), suppliers (0.35) and communities (0.32). The correlation of financial performance with shareholder orientation was minimal at 0.08.
These studies don’t actually prove that happier employees create happier customers and therefore higher profits, but they show a very strong correlation, which is almost the same thing.
How you can improve employee satisfaction and therefore customer satisfaction
You can either initiate this whether you are on staff or as a consultant:
- In conjunction with the marketing department, conduct focus groups of employees to identify which key customer satisfaction factors are related to interactions with employees.
- Include on employee surveys questions about employee behaviors and attitudes that relate to the key customer interactions that were identified in the focus groups.
- Include questions about communication in survey questions both to employees and customers. Communication questions are needed in order to establish the link between communication and customer satisfaction and therefore customer intentions and actions.
Ensure you compare employees and customers on the same basis. For instance, compare customers and employees from the same city or from the same branch if you are involved in a branch-based organization.
If you engage in this activity you will be able to show senior management the communication link between happy employees and happy customers.