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Power to the people: How to engage staff for a better customer experience

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1st Jun 2009
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If you want employees to live and breathe your brand to customers, you need to create a great experience for them within your company. According to Shaun Smith, this requires full and continual commitment from the top down but the results can be rewarding - not only for your people but for your bottom line as well. 

 

I recently wrote an article about winning customer loyalty and trust and it generated a lot of comment about the importance of engaging your employees in doing so. There is no doubt that creating a powerful customer experience requires the full and continual commitment of the people responsible for making it happen. So how do you align employees with your customer experience to make a difference to your bottom line?

People make the difference. If you concentrate on creating a great environment for your employees, they will focus on creating a great experience for your customers. Smith+co research has found that there is about an 85% correlation between the way your employees feel about your brand and the way that customers do. As our colleague Peter Simpson said when he was commercial director at online bank First Direct: "Why would you want to be one kind of brand to your customers and a different one to your employees?" No wonder then that First Direct places such store on recruiting and then keeping the right employees.

"Firms that deliver their brand promise through their people reap benefits that directly impact customer loyalty, market share and profitability."

Shaun Smith

The fact is that the contact with your people usually has a greater impact on customer loyalty than advertising. When consumers were asked to rate the extent to which a number of different attributes contribute to creating a customer experience that drives loyalty, 'people' was ranked first. While this realisation is not revolutionary, making it work remains unusual. Not many companies successfully manage to harness the full potential of people-power day in, day out. The trouble is that they need to. Organisations that deliver their brand promise through their people reap benefits that directly impact customer loyalty, market share and profitability.

So, how can you energise the people in your organisation? Five things are essential if you are to harness people-power:

1. Hire people with the attributes to satisfy

Once you know and understand customer expectations, you can create an organisation with the culture and the people to deliver on those expectations. This means identifying the fundamental behaviour your brand requires and the values that are integral to the brand. You must then hire to those behaviours and values. People matter, but the right people matter even more.

We often tell our clients that hiring for 'DNA' is more important than hiring for 'MBA'. For example, at First Direct the main criteria when hiring people is 'no previous financial services experience' because they believe that it is easy to train people in the technical aspects of their job. The hard thing is to teach customer focus and interpersonal skills, so they hire for them. At Pret A Manger, it is the restaurant employees who make the hiring decisions about which candidates will join their work team. Employees must have the right attitude to fit into the Pret culture. Even prospective senior managers have to be given the thumbs-up.

Of course, recruitment has to be followed by retention. As Frederick Reichheld puts it in his book 'The Loyalty Effect': "If you wonder what getting and keeping the right employees has to do with getting and keeping the right customers, the answer is everything."

2. Train employees to deliver experiences

In a study of brand sales effectiveness, Gallup found that people with a high natural degree of personal 'sales talent' sold, on average, 9% more brand volume than the norm. Those with additional 'brand talent' profiles outsold the rest by 21%. They defined people with brand talent as those really owning and living the values and behaviours that align with the brand personality and positioning. These people are a living extension of the brand, bringing the values to life and delivering them direct to customers.

Employees do not instantly walk through your doors and utilise their attitudes, skills and intelligence in the best ways to deliver great customer experiences. Nor can existing employees be expected to transform themselves instantly and alone. Not everyone has the luxury of starting with zero employees and hiring to clearly identified behavioural models. The question for many companies therefore is, what do you do with existing employees? And how do you develop people so that they have the requisite core behaviours and values? How do you train people to do it your way? You need to develop training that teaches employees not just what the core behaviours are, but how to live them for customers.

The answer is what we call ‘branded training’ - in other words, training that is designed to bring to life the values of the brand and equip employees with the specific knowledge, attitude and skills necessary to deliver them. We sometimes refer to this as ‘head, heart and hands’ training. All too often organisations neglect paying attention to all three components.

The 'State of the Industry' report issued by the American Society for Training and Development (ASTD) some years ago found the value of investing in people. For example, companies spending at the higher end of training per employee outperformed those at the lower end on each of three key business measures: Net sales per employee (+57%), gross profits per employee (+37%) and 'market to book' shareholder value (+20%).

Yet, the ASTD research found wide variation in the extent to which organisations made investment in their people a priority. Leading-edge companies spent 3.4% of payroll on training, while average performers invested only 1.5%. Similarly, leading-edge companies trained an average of 8.6% of their employees against the average of 6.9%. This research is even more valid in today’s depressed market, where gaining market share from competitors is vital.

"Employees do not instantly walk through your doors and utilise their attitudes, skills and intelligence in the best ways to deliver great customer experiences. Nor can existing employees be expected to transform themselves instantly and alone."

3. Reward for the right behaviours

Retaining talent does not happen accidentally and organisations can no longer expect employees to remain loyal for life. As Robert Stephens, the founder of the Geek Squad, observes: "We have temporary custody of talent". Organisations have to have systems to retain the best people.

At the California Federal Bank, one initiative involved the use of mentoring. This began when the company did some analysis of performances to see who was really doing well, having an incentive plan through which it measures results. Star performers are recognised through a 'circle of excellence' process. Further analysis revealed that there was a group of bank managers that was doing particularly well on customer service, although this did not filter through to the company's recognition system.

"We looked at it closely and we found that there were about 50 bank managers that did extremely well on customer service - cross-selling and doing all of the things that we consistently discussed," says Rick Leweke, executive vice president for HR at the bank. "Our challenge was to determine what these people were doing and how to get them to share their experiences with everybody else?"

Once people have the skills and understand customer expectations, their performance needs to be evaluated against the right behaviours. People-power requires that you also develop metrics for evaluating the use and impact of core and specific brand behaviours. Reward and recognition systems need to be aligned with these metrics, otherwise people will continue to focus on the things they have always done. Call-centres are a good example of this. Increasingly, call centre managers are being tasked to focus on the customer experience and yet they continue to be incentivised (and reward their people) on efficiency indicators such as average call handling time.

4. Drive the behaviours from the top

The final piece in the people-power jigsaw is that senior managers set the tone and the example. The way they treat people is reflective of how people will treat customers. For example, our survey of CEM implementation in Poland last year revealed that 63% of the senior management respondents agreed with the statement: 'Leaders make decisions that are consistent with our customer experience strategy', yet only 41% of their non-management colleagues agreed with them. This is vital. No matter how committed to customer experience you feel, it is what you do that counts.

Our experience has shown, time and time again, that the most significant factor in creating strong companies are leaders who take personal responsibility for communicating, demonstrating and rewarding brand or company values. Amazon.com CEO Jeff Bezos says: "Our mission is to be the Earth's most customer-centric company". Jeff Bezos and his executive team personally demonstrate their commitment to this mission through their actions and decisions, and in the process have created an enviable reputation for reliability and one of the most widely recognised brands in the world today.

5. Measure the employee experience

Some years ago, I created an Organisational Alignment Survey that set out to measure the extent to which employees were aligned internally with organisational strategy. This survey has been used by organisations as diverse as banks, airlines, motor dealerships and retailers. In 2001, the survey was subjected to a very thorough validation by David Matsumoto, of San Francisco State University. Responses were correlated from over 23,000 respondents from 52 companies, representing a variety of industries across 20 countries.

The 60 statements of the survey were correlated against six business results areas, namely customer service, employee retention, sales growth, meeting agency requirements, competitive performance and profitability. The employee responses which correlated most highly with the improved business results achieved by these companies were:

  • We are a highly successful organisation.
  • We have a well-defined strategy to overcome competitors.
  • We match the claims made through our advertising and promotion.
  • Employees are well trained to meet the performance standards required by their jobs.
  • We measure our quality/service performance against the worlds' best organisations in our field.
  • Managers meet with customers and consumer groups on a regular basis.
  • We carefully monitor the product/service quality of our suppliers, distributors and agents.
  • Employees are regularly briefed on departmental and organisational performance.
  • There is good cooperation among all departments in my organisation.
  • Performance targets that my department sets are realistic and consistent with our organisational vision/mission.
"The most significant factor in creating strong companies are leaders who take personal responsibility for communicating, demonstrating and rewarding brand or company values."

David Matsumoto concluded: "All of the correlations are statistically significant and seem to predict the desired business results."

Notice that the second highest correlated item was the extent to which the employees felt that their company had a well defined strategy. Many organisations believe that strategy is the domain of senior executives and it should not be communicated to employees. I am not suggesting that you should communicate your business plans or commercially sensitive information but the fact is that if your people do not know how you intend to win, then you probably won't.

Finally, act on the survey findings and use it annually to measure your success. To quote a well-documented case, US-based retailer Sears Roebuck found that for every 5% improvement in employee experience there was a 1.3% increase in the customer experience. This produced a 0.5% increase in revenue growth and translated into $200m for teh company.

There is strong relationship between the employee experience, the customer experience and financial results, so the case for engaging employees is compelling - so why leave it as an afterthought?

Shaun Smith of smith+co speaks and consults internationally on the subject of the customer experience. His landmark books on customer experience include 'Managing the Customer Experience - turning customers into advocates', 'Uncommon Practice - people who deliver a great brand experience' and his latest offering 'See, Feel, Think, Do – the power of instinct in business', which investigates the role of instinct and innovation in customer experience.

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