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Greater profitability is created from positive employee contact with customers

01 Jun, 2020 Internal communication, Marketing communication

Greater profitability is created from positive employee contact with customers. Researchers have shown a direct connection between employee and customer behaviors in which employee attempts to improve customer satisfaction led to increased customer spending and therefore profitability.

Study shows good employee training and communication lead to more satisfied customers.

A study by North Western University in the United States found that good employee training and communication led to more satisfied customers who spent an average of 22% more than they would have otherwise. Researchers conducted the study at six locations of a major hotel chain in three different cities. Customers were selected at random from a loyalty program database. Before the study, employee behaviors towards customers varied widely in different locations.

For the study, the researchers examined the variables that contributed to the customer experience in the hotel chain and at a competitor’s chain. These variables were compared with behavior by the same 300 customers over the previous three years. The variables were:

  1. Fast and efficient check-in, eg adequate number of front desk staff for check-in, efficient check-in process.
  2. Tries to satisfy customers, eg front desk staff try proactively to satisfy customer.
  3. Options and amenities, eg pleasant manner on the phone and from check-in, restaurant staff etc.
  4. Strive for precision, eg accurate details of the customer’s reservation at check-in; front desk staff care about the customer.

Greater profitability is created from positive employee contact with customers

Of these four variables, the statistical analysis found that the key variable was “Tries to satisfy” the customer. A 10% increase in the score given by a customer for the statement “Tries to satisfy” generated a 23% increase in customer spending over three years.

Overall, the study found that employee behaviors have a direct and positive impact on how much money customers spend – and therefore on profitability. The study was conducted under the auspices of the Forum for People Performance Management and Measurement.

The takeaway – use employee communication to motivate employees to focus on satisfying customers proactively. Greater profitability is created from positive employee contact with customers.

Excellent customer experience starts with superior employee experience

A PwC report in 2017 found 75% of customers worldwide want to interact more in the future with real persons – even as technology improves. Around 59% of all consumers feel companies have lost touch with the human element of customer experience. And there’s a mismatch between customer expectations and how employees deliver: only 38% of US consumers say the employees they interact with understand their needs; 46% of consumers outside the US say the same:

Automated solutions should “learn” from human interactions so those experiences also improve. This shift allows employees to be more engaged when they’re needed, provide better service and get necessary support from technology—as part of the seamless experience.

From the evidence revealed in these types of surveys, it is vital for employers to ensure they act in full support of their customer-facing employees. “When customers’ expectations are met or exceeded, companies gain measurable business benefits—including the chance to win more of their customers’ spending dollars,” say the authors of the PwC survey. These conclusions point to the fact that greater profitability is created from positive employee contact with customers, rather than letting customers struggle to deal with automated technology that may not help with their specific issues.

Image, right: PwC customer experience survey, 2017.

Similar evidence on benefits of keeping customers highly satisfied

A timeless Harvard Business Review article from 2008, “Putting the Service-Profit Chain to Work,” notes that top service organizations understand they need to put customers and frontline workers at the center of their focus. Those managers pay attention to the factors that drive profitability in the service sector: investment in people

  • technology that supports frontline workers
  • revamped recruiting and training practices
  • pay linked to performance.

This underlines the fact that highly satisfied customers create growth and profitability in a service business. To keep those customers profitable, you need to manage all the aspects of your operation that affect customer satisfaction – what the authors call the service-profit chain.

The service-profit chain – greater profitability is created from positive employee contact with customers

Employee satisfaction soars when you enhance internal service quality (equipping employees with the skills and power to serve customers). Employee satisfaction in turn fuels employee loyalty, which raises employee productivity. Higher productivity means greater external service value for customers – which enhances customer satisfaction and loyalty. As noted in the HBR article, “A mere 5% jump in customer loyalty can boost profits 25%–85%…To maximize profits, strengthen all the links in the service-profit chain.”

Each link in the chain directly affects the next link

Image: Putting the Service-Profit Chain to Work, Harvard Business Review.

Concrete language improves customer satisfaction – and leads to higher profitability

American companies spend over a trillion dollars a year recruiting and training employees to deliver a great customer experience. But very few companies seem aware of the benefits of “concrete language.” New research has found that using concrete language with customers improves customer satisfaction. A concrete term creates a mental picture of a physical object, something people can see, experience, touch, or have a sense of, and can imagine in their mind. And that concreteness increases customer satisfaction. The researchers, associate marketing professors Grant Packard and Jonah Berger, wrote an article, “How concrete language shapes customer satisfaction,” summarizing the five research studies they conducted: The studies included text analysis of over 1,000 real consumer-employee interactions in two different projects.

Interviewed in the Knowledge@Wharton newsletter of 20 September 2021, Prof. Berger said, “[Concrete language] doesn’t just make people happier, it causes them to be more likely to come back and buy more in the future.” Berger says that when talking to customers, employees tend to use abstract language. But when they use concrete language, they make customers feel seen, heard, and valued. The new research shows a simple and cost-effective way to fix that:

  • A sales person you ask for help in a store could say, “Hey, I’ll go look for that. I’ll go look for that top. When you say “that,” it’s a vague reference, which doesn’t give a customer a mental picture. “I’ll go look for that T-shirt in gray”  is more specific. We have a sense of what that T-shirt in gray looks like.
  • Someone responding to an inquiry about a delivery, “When will my package arrive?” may say “It’ll arrive there soon.” But if they say “It will arrive at your place,” or “It will arrive at your door,” the customer forms a mental picture of it physically arriving.
  • Even words like “refund” can be made more specific. When a more concrete term like “money” is used instead of “refund,” people more readily have a sense of what money is, while “refund” is a bit more abstract.

Increasing the degree of concrete language

Packard & Berger’s research article included an example of the ways words used could progress from the general to very specific, concrete language. The article summarized the statistical results of a study using the sentences below, which was conducted on 481 participants. Compared to when employees used less concrete language (eg, “I’ll go look for that”), using more concrete language (eg, “I’ll go search for that t-shirt in grey”) increased customer satisfaction and willingness to purchase:

  • “I’ll go look for that.”
  • “I’ll go search for that.”
  • “I’ll go search for that top.”
  • “I’ll go search for that t-shirt.”
  • “I’ll go look for that t-shirt in grey.”
  • “I’ll go search for that t-shirt in grey.”

More examples of using concrete language in customer service

Packard & Berger’s research article gave examples of speaking in general terms could be replaced by more concrete language in customer service, as shown in the image below:

Image: In the article, “How concrete language shapes customer satisfaction,” Journal of Consumer Research, Vol. 47, 2021.

Make customers feel heard

Importantly, in sales interactions, customers must perceive that the employee is listening genuinely to them. For listening to have an impact, employees must communicate that they are paying attention and understand the customer through their behavioral responses. A way employees can signal listening is through linguistic concreteness. Concreteness describes how much a word refers to an actual, tangible, or “real” thing, describing objects and behaviors in a manner that seems more specific, familiar, and perceptible to the eye or mind (ie, imaginable or vivid).

Consider the everyday language that service providers might say to consumers. In each example below, the options could be more specific and imaginable:

  • A waiter might ask a customer if they would like anything – or if they would like a drink, or coffee.
  • A call center worker could respond to a caller’s inquiry by vaguely saying the package will be delivered there – or they could specifically say at their place or at their door.
  • An employee at a cellphone retailer could vaguely refer to a new iPhone as a product – or they could call it a device, or phone.

Concreteness also varies in other parts of speech. For example, describing a vehicle as sporty or red would seem more vivid to the mind of the customer. These examples increase linguistic concreteness because they describe things or actions in a more vivid, perceptible, tangible, detailed, or specific way.

Avoid the habit of abstract language

It is probably easier for customer-serving employees to use more abstract language. Call center and retail employees deal with dozens of customers a day. In the case of an online clothing retailer, for example, an employee may go from talking to someone who received the wrong size of shoes, to helping someone find the right t-shirt color. Rather than tailoring language to each, employees may fall into the habit of using the same stock phrases, eg, “Sorry about this issue” or “I’ll go look for that,” whether the “this” or “that” in question is about shipping, a t-shirt, or some other topic. While more concrete language (ie, “Sorry that we sent the wrong size” or “I’ll go look for that t-shirt in grey”) would be more focused on the specific situation, using more general, abstract, generic responses allows employees to save time and effort.

However, while abstract language might be easier for employees, consumers may react more positively to concrete language because it suggests employee is paying attention, and understands their specific needs. As discussed above, concrete language is more specific and vivid. Employees who seem to listen are seen as more caring, empathetic, helpful, and hard-working. Good listeners also seem more socially close, offering what appears to be a new potential means of communicating closer psychological distance.

When abstract language is used about others

A large amount of academic work examines when and why people speak more or less concretely. Overall, this literature demonstrates that, when communicating positive things about themselves or others they like, people use more abstract language because it suggests that these positive attributes are generalizable, stable traits (e.g., “Lisa is kind” rather than “Lisa helped me.”)

Linguistic concreteness can also shape inferences other people make about the speaker’s attitudes or traits. Audiences infer that someone who uses more abstract language to describe another person positively views them favorably because they use more abstract, sweeping generalizations about them.

Benefits of concrete language are widely applicable

The fact that the results of the above studies are consistent across different forms of communication (ie, email vs. phone) and contexts (different firms, customer requests, issues, and language) reflects that they are widely applicable. Whether dealing with a problem or searching for a product, the research showed that speaking or writing more concretely increased customer satisfaction, purchase intentions, and actual purchase behavior.

Communication is important in the service-profit chain

Communicators can consider the implications for sales and marketing as well as how it might apply in staff interactions with senior managers, in marketing communication such as media relations and in stakeholder relations. Worth thinking about.

Further reading on the fact that greater profitability is created from positive employee contact with customers

You may be interested in reading my article, “Listen to dissatisfied customers before they damage your reputation and business,” about taking sufficient notice of customer dissatisfaction and complaints. Dealing well with these problems creates greater profitability from positive employee contact with customers.

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About Kim Harrison – author, editor and content curator

Kim Harrison, Founder and Principal of Cutting Edge PR, loves sharing actionable ideas and information about professional communication and business management. He has wide experience as a corporate affairs manager, consultant, author, lecturer, and CEO of a non-profit organization. Kim is a Fellow and former national board member of the Public Relations Institute of Australia, and he ran his State’s professional development program for 7 years, helping many practitioners to strengthen their communication skills. People from 115 countries benefit from the practical knowledge shared in his monthly newsletter and in his books available from cuttingedgepr.com.

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