How employee experience drives customer satisfaction

The connection between employee experience (EX) and customer experience (CX) is well-documented, with both anecdotal evidence and statistical data supporting the correlation.

Research indicates that positive EX leads to superior CX, which in turn drives revenue growth and customer satisfaction. This relationship is demonstrated in companies where engaged employees deliver exceptional service, resulting in improved customer relations and business success. 

Below, we’ll dive deeper into the connection between EX and CX, discuss an example and take a look at tips for how to improve EX and thereby CX.

The correlation between EX and CX

A 2022 Harvard Business Review study examined a large global retailer whose business relied on customer-facing employees. After reviewing three years of employee and financial data, researchers found a clear and substantial link between employees and revenue. 

“If an average store could move from the bottom quartile to the top quartile in each of the employee experience metrics we studied, they would increase their revenue by more than 50% and profits by nearly as much…if an average store could move from the bottom quartile of performance to the top quartile in each of the four dimensions it would go from generating $57 per person-hour worked to $87 per person-hour. That’s more than a 50% increase in revenue.”

It makes sense that companies with engaged employees would outperform companies that lacked engaged employees. After all, strong employee engagement rates lead to improved employee longevity and many times, it is these longer-tenured employees who are key to seamlessly delivering CX. 

While creating a positive organizational culture is key to enhancing both EX and CX, what happens when it doesn’t exist?

When good service falters: A personal case study

I had heard numerous stories about negative customer experiences with a vendor I was working with but had not experienced them firsthand. Interestingly, I found that the true measure of CX is often revealed during challenging times. Yes, this is much like the saying about individuals showing their true character in times of adversity. 

After a few months of strong service, I encountered an issue with the vendor. I soon realized my level of satisfaction with the vendor’s service was dropping. Noticeably, it coincided with the start of the vendor’s high employee turnover. For the most part, my interactions with the vendor were online, but I had a recent opportunity to visit their offices, and the visit provided further insights into my poor experience.

Behind the scenes: Insights from a vendor visit

During my visit, I observed a lack of teamwork among employees. Despite their good intentions, employees across departments were not able (or perhaps willing) to come together to solve my challenge. 

There was one person who took charge, but as soon as the solution required the help of a colleague from a different group, conversations stalled. The atmosphere in the office was sullen and there were mutterings about another employee who had resigned at the beginning of the week. 

A deeper conversation with my contacts revealed that employees felt their voices were not heard and that they did not feel valued. 

The pillars of employee engagement

These insights align with research from Gallup that revealed the five key drivers of employee engagement and their importance in building a strong employee experience. These drivers include creating a sense of purpose, ensuring personal and professional development, pairing individuals with a caring manager, facilitating ongoing conversations and focusing on an individual’s strengths rather than weaknesses. 

Of all the drivers from Gallup’s research, the outsized importance of managers surprised me. Gallup found that the manager determined 70% of the variance in team engagement. While some of us luck out and work for great managers, this is not always the case. But there is no need to despair; there are several strategies for improving the employee experience.

Crafting the employee journey: Tips for improving EX

When employee engagement is strong, employees feel a sense of belonging, take ownership, stay longer at the company and perform at higher levels. Similar to designing a customer journey map, companies with strong EX need to:

• Identify the key personas.
• Document the stages of their employee lifecycle.
• Identify the core needs.
• Identify ways to improve the employee lifecycle at each stage of the journey. 

For example, a persona might be Sam, a young sales professional working remotely. Sam has three years of experience in sales. He lives outside of the city but would like to move to a more urban setting. 

While rural life is OK, Sam is looking for the hustle, bustle and spontaneity of the city. From a work perspective, Sam wants to grow in his career and would like to run a corporate sales team one day.

In thinking about Sam’s employee lifecycle, goals could include:

• Attract: “I want to find a company that fits my values and lifestyle.”
• Recruit: “I want a quick and efficient recruitment process.”
• Onboard: “I want to understand my role, company and goals.”
• Retain: “I want to contribute, achieve and be recognized.”
• Grow: “I want to be challenged, take on more responsibility and move up/move laterally.”
• Offboard: “I want to depart from the organization.”

With this in hand, the next step is to document the employee experience by answering:

• What are Sam’s activities at each stage?
• What are the touchpoints and the process?
• Who or which groups within the company are involved in the process?
• What, if any, technologies are involved?
• What is Sam thinking, feeling and doing at each stage?
• What’s working well and what needs to be improved?

Once the employee journey is documented, you will see roadblocks preventing employees from getting the best experience. Once you identify these roadblocks, you can work with the team to identify solutions.

Within organizations, HR sometimes owns the employee experience. However, it is important to know that it takes a collective, cross-functional effort to ensure the employee journey is optimal across the entire lifecycle. Given the importance of the manager’s role in driving employee engagement, management and leadership training often become a critical component of improving EX.

Don’t feel discouraged for anyone reading this who does not work at an organization where HR is taking the lead and driving a great employee experience. You can always work within your team to create a great experience within the components you own. Starting small and enlisting the help of adjacent teams can be just what your group needs to boost the experience.

Elevating CX through EX

The connection between EX and CX is crucial for business success. Companies with engaged employees report significantly higher sales and customer loyalty rates. Engaged employees are more present, productive and attuned to customer needs, improving customer interactions and satisfaction. Organizations prioritizing a positive employee experience see improvements in customer satisfaction, innovation and profitability.

Overall, my experience with the vendor underscores the importance of fostering a positive employee experience to enhance customer satisfaction. Companies must prioritize employee well-being and engagement to create a virtuous cycle of improved EX and CX, ultimately benefiting both employees and customers.