Employee and Customer Loyalty aren’t they the same thing?
Ever wondered why employee loyalty is so important, and how it relates to customer loyalty? After all - the NPS (Net Promoter Score) and the eNPS score (Employee Net Promoter Score) - are calculated in the same manner. Both scores are valuable for the company’s progress and wellbeing. But how? And what’s the link between them?
NPS vs eNPS: Is there a Difference?
NPS gauges customer loyalty and the company’s relationship with its customers, whilst eNPS calculates employee engagement and employee loyalty to the company. The concept of NPS was originally developed by Fred Reichheld, Bain & Co and Satmetrix, but both NPS and eNPS is measured by asking employees the question “How likely are you to recommend (our company) to friends and family?”. This question is rated from a scale of 1-10, which fits into one of three categories:
What do these categories indicate?
If this is the NPS score, detractors are dissatisfied with your company’s products or services, which means they are more likely to spread negative worth-of-mouth or stop using your company. Passives are satisfied but unenthusiastic customers that could switch over to your competitors if the opportunity arises. Promoters are enthusiastic customers that are likely to keep using your company and spread positive word-of-mouth, which could potentially lead to an increase in sales and enhanced reputation.
For an eNPS score, detractors are employees which are not engaged or satisfied with their work and are the most likely to leave or negatively impact customer satisfaction. Passives are neither loyal or disengaged with the company, whilst promoters are emotionally invested, engaged and interested in their work. Promoters are more likely to positively impact customer satisfaction and improve your company’s reputation.
The overall NPS or eNPS score is measured on a scale of -100 to 100. A negative score means you have more detractors compared to promoters, and a positive score means you have more promoters than detractors.
Obviously then, the more promoters your firm has, the better. So if your eNPS or NPS is positive score, then your company is on the right track. Regardless, your company is probably looking to increase employee loyalty and customer loyalty. Well, it may be more efficient to focus first on increasing the eNPS score, which would indirectly increase the NPS score. But how?
How your eNPS score increase your NPS score:
Think about it this way:
Firstly, a higher eNPS score means increased productivity and quality of work because employees are more interested in their work and care about the company and its goals.
An engaged workforce would be more willing to go the extra mile to benefit your company, and spread positive words both to their peers and customers. A higher eNPS also means lower attrition rates and costs, knowing Replacing an existing talent with a new one tends to cost about three times the salary of the employee. .
Even if loyal employees do not directly spread positive word-of-mouth about your company to customers, they are more likely to become “brand ambassador” and convey their enthusiasm through customer interaction because they feel happier. Hence, loyal employees create better customer experience. If your customers are receiving better service from your engaged and loyal employees, they in turn are more likely to become loyal to your company.
This good fortune works in a cyclic manner. A good reputation among customers would convey the message that your company is successful, friendly and a great place to work at. Therefore, you could be attracting talent because of increased awareness among customers, which could be useful if you are planning for growth due to an increase of sales.
Therefore, in order to improve customer loyalty, it would be beneficial to focus on employee loyalty. So, the question now is, how do you increase your eNPS? Here are some tips to get your started:
How to increase your eNPS:
- Understand the detractors:
Find out what is stopping your employees from being loyal. Is it because the work isn’t challenging? Is there not enough autonomy? Do they wish there was more free time or an open-work culture? Whatever the problem is, pinpointing it will help you work towards a solution to turning those detractors into promoters.
- Share your results:
Be transparent about what your eNPS and even NPS scores. Discussing it with your employees will make it easier to pinpoint to the solutions to increasing both scores.
- Measure your eNPS score frequently
The eNPS score should be measured over time so that you can continuously and accurately track your company’s progress in employee loyalty. This way, you can more effectively improve your eNPS score through incremental changes.
Moreover, making them involved would make the employees feel like they have a sense of responsibility towards the company’s goals, which also could increase employee engagement.
Of course, it is important to bear in mind that improving your eNPS score will not be sufficient to increase engagement and performance, nor would it automatically increase customer loyalty. There are many other key metrics and considerations, including taking action on engagement scores or identifying learning priorities. Nevertheless, measuring the pulse of your organisation and working to improve your eNPS score is a great first step.