Relationship between Customer Experience & Employee Experience (P1)

By PeopleFirst on August 29, 2022

The key to happy customers is happy employees.

There, we said it.

Regardless of your industry, niche, product, or service, we all have something in common - we deal with customers. The most important part of any business: they drive revenue and enable our business continuity.

 

The Chicken & Egg Relationship

There is an undeniable link between customer experience (CX) and employee experience (EX). 

Do you think a disgruntled and unmotivated employee will serve customers with a smile and go the extra mile?

No, of course not.

Our employees are often the front line when addressing customers’ concerns and these interactions set the tone for either a positive or negative customer experience. Well-managed relationships can lead to sustainable business and become part of your unique value proposition. 

This study by Forbes and Salesforce provides strong evidence that the causal direction is as follows: EX > CX > revenue growth. So to drive expansion, a company should begin with EX.

 

The Numbers Game

Across different sets of data collected by various organisations, we find that there is consistent evidence that explains the benefits of improving EX to enhance CX. 

Source: IDC’s Employee Experience and Customer Experience – What is the Connection?

85% of respondents in a survey conducted agreed that an improved EX and higher employee engagement lead to better CX, higher customer satisfaction, and higher revenues for their organization, with most of them buying into a moderate to significant impact between EX and CX.

EX CX blog asset 1Source: Forbes Insight’s The Experience Equation – How Happy Employees And Customers Accelerate Growth

As seen from the graph above, the ROI for enhancing EX is much higher than that for enhancing CX, but a combination of the two gives organisations even greater benefits. 

 

6 Different EX Pathways to the CX Quest

So... how does EX translate to better CX? What is the mechanism that ties CX intricately to EX?

Fundamentally, we have to recognise that customers interact with the business through the employees or through a digital platform that is built or managed by employees.

As there are many different aspects of EX, CX can be influenced by improving aspects of EX through different pathways:

 

1. Brand Values ⚖️

Increasingly, we find that consumers are attracted to brands that celebrate the human experience, not just within the society at large but also within the organisation. Brands must ensure that they avoid negative work environments else they can expect backlash from consumers.

Key statistics:

  • 70% of customers say they buy from brands they believe reflect their own values
  • Companies high in EX: 61% of customers are more likely to shop with a company who treats employees well
  • Companies low in EX: 64% of customers have switched brands or stopped purchasing products from companies with poor employee treatment reputation

 

2. Employee Influencer Marketing 📲

The proliferation of social media has pushed for the rise of influencer marketing. Companies with strong EX can leverage on the opportunity to capitalise on employees to share about their own EX.

Consumers are more likely to think that the endorsement by internal employees is more authentic, genuine and relatable than that by external stakeholders.

Key statistics:

  • 80% of people trust recommendations from people they know, so each employee that promotes their own organisation is a highly effective influencer that can showcase good CX
  • 79% of firms firms reported more online visibility after the implementation of a formal employee advocacy program, while 65% reported increased brand recognition

 

3. Building an Innovative Culture 💞

A critical aspect of EX is culture. Culture is multifaceted, including dimensions like communication, trust, risk-taking and feelings of safety. 

Only in a safe environment, employees are confident in proposing and implementing innovative ideas. A great example comes from Wholefoods, they created a chatbot that helps customers find new recipes and ways to use ingredients from the store. Customers can chat with the bot to get ideas about certain types of foods or recipes. People who are in a hurry can send a food emoji to instantly get a recipe that includes that as an ingredient.

Companies that invest in EX have:

  • 2x percentage revenue from new products & services in last 2 years
  • 28x chance to be listed on Fast Company’s Most Innovative Companies
  • 2.1x chance to be listed on Forbes’ List of the World’s Most Innovative Companies

 

4. Employee Growth & Development 🪜

Another critical aspect of culture in EX revolves around the focus on growth and development of the employee. There is a 2-prong approach here:

Using Taco Bell as an example, they release a new menu item every 6 weeks and customer satisfaction scores tend to drop the first week of each new experience. They adopted Inkling, a learning platform, to train employees on new menu items as soon as it’s released and found a 4-5% increase in customer happiness with new menu launches in restaurants from using Inkling as compared to those who have yet to adopt the system.

 

5. Supportive & Collaborative Environment 🤝

Modern organisations operate and thrive on the interactions and collaborations between all its internal stakeholders. There are 2 ways in which companies that improve the human interactions aspects of EX which would correspondingly affect the CX:

Key statistics:

  • 92% of consumers feel that a contact center agent’s perceived happiness affects their personal customer experience.
  • Companies with a highly collaborative environment especially cross-functionally are 1.27x chance to have a “high” or “very high” ROI for their CX program

 

6. Rewards & Recognition 🏆

Rewards and recognition is probably the most obvious pathway that links EX to CX.

Generally, a holistic rewards and recognition program allows employees to feel valued by the organisation, which in turn motivates them to go above and beyond for the company.

Let’s take a look at McDonald's, they launched the “Thank You Crew” initiative where customers recognize crew members in their local restaurants who are going above and beyond. Depending on the customer compliment of the crew member’s performance, they will be recognised with rewards ranging from a thank you note to flowers or even tickets to events.

Key statistics:

  • Companies with recognition programs have 14% more employee engagement, productivity and performance than companies without recognition programs.

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We hope you managed to take away a learning or two from this quick summarised blog article on the link between Customer Experience (CX) & Employee Experience (EX), as well as the 6 different pathways that could be influenced by each other. 

EX has evolved over time. Today, it is not just about keeping employees happy but also pushing for growth and business outcomes in the process. 

Read Part 2 of this series, where we deep dived into EX strategy implementations and pitfalls to avoid.

 

Tags: Employee Experience, People Science