Every small business owner understands the importance of employee engagement and customer satisfaction. What they may not realize is that there is a direct correlation between the two. A recent Gallup study found that when engaged employees served engaged customers, the results far exceeded what the researchers expected. In fact, workgroups that scored above the median on customer and employee engagement were, on average, 3.4 times more financially effective than those ranking in the bottom half on both measures.
Customer’s want to deal with engaging, competent employees, and they expect a seamless experience no matter when and how they choose to interact with a brand. According to the National Business Research Institute, 40% to 80% of customer satisfaction is directly affected by employee attitudes. In another survey, three quarters of customers indicated they choose brands with friendly employees while only a third choose brands because they have a good reputation.
Engaged Employees Create Engaged Customers
Numerous studies have found that employee behavior and attitude is one of the most significant drivers of customer satisfaction. Happy employees spread their enthusiasm to customers and are more dedicated to providing the best possible service. The result is highly satisfied and engaged customers.
Keeping customers happy can benefit your business in countless ways. For example:
- 86% of people will pay more for a better customer experience and 89% will go to a competitor after a bad one.
- Customers who are fully engaged represent a 23% premium in terms of share of wallet, profitability, revenue, and relationship growth.
- The majority of organizations that have high employee engagement rates retain over 80% of their customers.
- A repeat customer spends 67% more than a new one.
While engaged employees create satisfied customers, the opposite can also be true. Positive customer experiences can reinforce how employees feel about the value and purpose of their work. While it’s important to learn from negative customer experiences, business owners and their leadership teams should recognize customer service successes to motivate employees and further drive engagement.
A Positive Customer Experience Improves Your Bottom Line
Delivering a positive customer experience is crucial to your bottom line. A study conducted by Washington State University determined that customer satisfaction is directly linked to employee satisfaction and financial success is directly linked to customer satisfaction. Therefore, there is an indirect correlation between employee engagement and financial performance.
Statistics support this finding. For instance, 80% of U.S. consumers will pay more for a product or service to ensure a superior customer experience. Engaged consumers buy 90% more frequently and spend 60% more per transaction, ultimately delivering three times the value to a business over the course of a year.
Small Businesses Must Focus on Engaging All Employees
The majority of Americans believe smaller companies place more emphasis on customer service than larger companies, and 43% percent of small business owners say improving customer experience and retention is their top strategy to improving revenue growth. It’s clear that in order to achieve this goal, it is essential to have engaged and friendly employees at every touchpoint along the purchasing path.
It’s easy to see the connection between engagement and customer satisfaction in customer-facing positions like sales and customer service. However, a great customer experience is a result of engaged employees at all levels. Whether they interface with customers directly or not, all employees have an impact on customer retention and revenue. Simply put, every employee in your company owns the customer experience.
Leadership is the driver of engagement in a company. When small business owners ensure that their managers are engaged and empowered, those reporting to the managers are more likely to be engaged. Organizations that focus on engaging their employees turn these employees into brand advocates who have a personal stake in the company’s success – and the customers who interact with them are more likely to be loyal and happy.
In order for your small business to grow, you need more than a desirable product or service, a solid business plan, and adequate financial resources. It’s important to develop a strategy for creating a culture in which your team is genuinely engaged in your company’s mission and goals. By personally connecting with your brand values, they will be committed to providing your customers and vendors with a consistent, quality experience and giving your small business a crucial competitive edge.
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