The Role of Employee Engagement in Customer Satisfaction


The link between employee satisfaction and customer satisfaction is undeniable. Happier employees means high morale resulting in a more diligent and efficient workforce. According to a recent Gallup Report, employee disengagement is costing the U.S. commercial industry over $300 billion USD per year. A different study showed that 72% of engaged employees believe they can positively affect customer service. In British Columbia, Canada, they specifically conducted a study to determine the impact of employee engagement on customer satisfaction:

  • Finding 1: Employee engagement levels impact the satisfaction of services they provide to their customers. For every two-point increase in employee engagement, we can expect a one-point improvement in customer satisfaction. 
  • Finding 2: Overall, approximately 20% of the variation or differences in customer satisfaction scores can be explained by changes in employee engagement scores.

We see this not only in research, but everyday life. We all have had that bad experience at a restaurant where a server or waiter would barely give you the time of day. It not only affects your perception of the restaurant, but affects your enjoyment of the food itself, and leads to customer defection with a host of other options readily available.

And this is true of every competitive industry, whether it be Telecommunications, Financial Services or Retail, with defection becoming both easier and more appealing with new customer offers. Ultimately businesses today do not have the luxury of losing customers, especially due to poor employee performance. So what is the answer?

One critical factor is cultural change driven by the Voice of Customer. Organizations we engage with often have the primary objective to improve their Customer Experience; and to enable our clients to achieve this, our Customer Transformation Team  always recommends to refocus and energize the people on the front line through increased engagement. This helps staff to understand and believe in what the company is aiming to achieve, meaning they are fully engaged, and so resulting in a better customer experience.

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