If your employees aren’t happy, how can you expect your customers to be?

How do we keep our customers satisfied? 

It’s a question that all businesses ask, but many struggle to answer. 

Anyone who’s searching for a silver bullet or a magic pill to improve customer satisfaction may as well start over. Because it’s only a matter of time before they realize that a single solution doesn’t exist.  

Customer satisfaction depends on a lot of factors: customer service and the customer experience; the price of a particular product; the variety of goods a business offers; even the cleanliness of a store. The list goes on and on, and evolves over time – mobile apps, quality, and speed are three up-and-coming drivers of customer satisfaction that businesses would be wise to remember.

Yet, for all the steps organizations take to try to increase customer satisfaction, there’s one area that’s more important than many realize: employee satisfaction.

The link between employee and customer satisfaction is real

There is a genuine connection between employee and customer satisfaction. 

Happy employees tend to provide superior service to customers. Better service leads to happier customers. Happy customers are more inclined to become repeat shoppers, which means more money in the company’s pockets. 

This results in “… higher stock prices, bigger returns on investment, and happier shareholders. And (the smart companies) can turn that capital around to give employees bigger benefits, which in turn makes them, and their customers, even happier.”

Unfortunately, if happy employees equate to happy customers, the opposite is also true. Dissatisfied employees likely won’t offer top-notch service, creating unhappy customers who may take their business elsewhere. 

The proof is in the pudding

Sure, this concept makes sense, but where’s the proof it’s more just than a theory? Glad you asked.

A Glassdoor study set out to answer the following question: “Can companies help to achieve high customer satisfaction by investing in employees and ensuring that those who deliver goods and services are themselves satisfied with their jobs?”

Using Glassdoor employee reviews and American Customer Satisfaction Index (ACSI) ratings, the study found a “strong statistical link” between employee and customer satisfaction. According to the study, every one-star improvement in an organization’s Glassdoor rating correlated to a 1.3-point (out of 100) increase in customer satisfaction scores. 

 

Happier workers enhance an organization’s ability to offer better customer satisfaction. This was especially evident for retail, restaurants, travel, and other industries with routine interaction between worker and customer. At the time, Southwest and Hilton topped the list in the travel space, while Costco and Trader Joe’s stood out among retailers as having both high employee satisfaction and customer satisfaction. 

Currently, Southwest shares the number one customer satisfaction spot among airlines, while Hilton takes the lead outright among hotels, per our latest Travel Report. Meanwhile, Costco outpaces all department and discount stores in customer satisfaction for a fifth straight year with a score of 81 (out of 100), according to our most recent Retail Consumer and Shipping Report. Trader Joe’s also leads supermarkets and the entire retail sector with a score of 84.

Satisfying your employees will pay off

What does it take to make employees happier? 

Is it the money? Costco, Amazon, Wayfair, and more all increased minimum wage to over $15 an hour. What about focusing on employees’ mental well-being, cultivating a better work-life balance, or offering better perks like unlimited PTO?

Each of these elements is sure to entice employees. But just as one thing isn’t going to suddenly spark improved customer satisfaction, the same is likely true for employee satisfaction. 

What’s important is that, as you think of all the ways to improve customer satisfaction, you remember to keep your employees happy. Because if you don’t, it won’t be good for anyone. 

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