Research has long suggested that employee experiences and customer experiences are deeply connected, with positive employee experiences leading to positive customer outcomes. Companies with engaged employees report 233% greater customer loyalty than those without (Aberdeen), and companies with over 50% employee engagement retain over 80% of their customers (Demand Metric). A three-year study from ASPU also found a negative correlation between employee turnover and customer satisfaction: as employee turnover levels increased, customer satisfaction scores decreased significantly.
These studies and many others like them demonstrate the huge impact employee experience has on a company’s bottom line. When a company delivers a great experience for employees, employees go on to deliver a great experience for customers. But when a company fails to deliver a great experience for employees, customers experience the negative effects firsthand, and the company’s bottom line suffers.
Exploring the link between employee and customer experiences
This strong correlation between employee and customer experiences poses an interesting question: does the relationship go both ways? If improving the employee experience leads to better customer outcomes, will improving the customer experience lead to better employee outcomes? Survey says… yes!
Specifically, using customer feedback to learn from and refine the customer experience is strongly associated with better employee outcomes. Here are four ways in which customer feedback can improve the employee experience:
1. Helping employees learn and grow
Learning and development opportunities are essential for keeping employees engaged and retaining top talent. In fact, research from PwC indicates millennials, who now make up the majority of the American workforce, rank training and development as the #1 most valuable benefit employers can provide.
Customer feedback provides invaluable opportunities for customer-facing employees to learn and improve. When an employee receives critical feedback from a customer and works to address their issue, they’re not just improving circumstances for the customer. They’re also learning and adapting to customer needs, becoming more effective in their role, and expanding their repertoire with firsthand customer insights.
2. Making managers more effective
Manager-employee relationships account for 70% of the variance in employee engagement scores. This means even in stressful conditions a great manager can still inspire and motivate employees to do their best work. A poor manager, on the other hand, will likely leave employees feeling discouraged and disengaged even in perfect conditions.
Customer feedback keeps managers well-informed and well-equipped to support their customer-facing employees. When managers have the insights needed to create and implement successful strategies to improve customer experiences, employees see those managers as effective, which has a strong influence on their own experiences. Research from Towers Watson found that in companies where leaders and managers were perceived by employees as effective, an incredible 72% of employees were highly engaged.
3. Instilling faith in company leadership
Belief in leadership is one of the strongest drivers of employee engagement and critical to improving the employee experience. According to research from Dale Carnegie, 70% of employees who lack confidence in senior leadership are not engaged. In order to do their best work, employees first need to believe company leaders are making the right decisions.
Collecting and acting on customer feedback builds up employees’ faith in senior leadership by showing employees that company leaders are focused on customers and willing to listen, learn, and adapt to their needs.
4. Establishing a strong company culture
According to Hays’ “What People Want Report,” 47% of employees actively looking for new jobs pinpoint company culture as their main reason for leaving. Company culture strongly influences the complete employee experience, with staggering financial impact: A major long-term study published by Forbes showed 4x higher revenue growth in companies with “performance-enhancing cultures” that placed high value on customers and encouraged leadership action.
Many companies claim "exciting and delighting customers" as part of their culture, but these assertions don’t often align with reality: Research from Deloitte found only 12% of executives believe their companies are driving the “right culture.” Customer feedback empowers companies to live out their customer-centric values by listening, learning, and taking action. These steps to improve the customer experience motivate employees by showing them their company is a place where customer voices matter and where employees are empowered to make a difference.
Research on employee engagement and experience has always shown a strong link between positive employee experiences and customer outcomes. Companies with great employee experiences grow faster, experience greater profitability, and report higher levels of customer satisfaction and loyalty.
It’s hardly a surprise that happy employees lead to happy customers, but looking at this relationship from the opposite direction reveals how deeply interconnected employee and customer experiences are, and how companies can leverage this relationship to optimize both experiences. With a strategy that collects customer experience feedback and empowers employees to act on the data, companies can set in motion a cycle of continuous improvement for both customer experiences and employee experiences.