Want Engaged Customers? Then Engage Your Employees!

In today’s challenging economy, companies must deliver a compelling and differentiated customer experience if they are to survive and thrive. Indeed, most companies understand they need to actively engage their customers to build loyalty, deepen relationships, and gain access to insights that inspire future actions.

As the pace of business has slowed over the last several years, companies have redoubled efforts to engage their customers—to keep the ones they have and bring in new ones. To achieve these goals, however, employees must first be engaged—committed, enthusiastic, and motivated to provide the interactions and experiences that keep customers close. As many as 83 percent of managers consider employee engagement to be a critical factor in attracting and retaining customers, according to research by the American Society for Training and Development.

Unfortunately, just as companies are driving to engage their customers, they also have taken cost-cutting measures that have had a chilling effect on employee morale. A Towers and Perrin report indicates that 72 percent of companies have reduced their workforces in response to the recession. It’s not surprising that the number of “actively disengaged” workers has risen to as much as 24 percent in companies where layoffs have occurred, according to Watson Wyatt’s Employee Engagement Index. One of the biggest concerns for employers is the number of workers intending to change jobs when the economy improves.

So what can these companies do? Despite the turmoil and uncertainty in the current environment, there are steps employers can take to re-engage employees and simultaneously rise to the challenge of engaging customers in a way that will help them retain market share and grow business.

Escalating Expectations and the Engagement Imperative

Customer Engagement

First, companies must develop a unique and distinctive offering to draw in customers. Today, customers are unlikely to be engaged if companies merely provide products and services that meet customer expectations—what Theodore Levitt referred to as the “Expected Offering.” In his research, Levitt suggested that a company seeking competitive advantage must deliver what he called the “Potential Offering”—features, capabilities, and characteristics that meet unspoken or unanticipated customer needs that even the customer might not be aware of.

With today’s rapid cycles of product development, even the Potential Offering can be replicated quickly by competitors. Expanding upon Levitt’s original research, organizations need to develop the “Future Potential Offering,” based on deeper insight into customers’ concerns, interests, preferences, and priorities.

To achieve the “Future Potential,” organizations must develop more intimate relationships with customers, encouraging them to share information that points to future desires. While reaching high levels of customer satisfaction was an admirable objective in the past, the bar for success is now much higher. Today, customer engagement is critical if organizations are to continue developing and delivering experiences that produce profitable, long-term relationships with customers.

When we use the expression, “customer engagement,” we go beyond the traditional definition of customer satisfaction. By engaging customers, an organization:

• Inspires an emotional connection
• Creates a consistent customer experience through the integration of its products, processes, and personal connections
• Enables and encourages customers to involve themselves as extensions of the organization

Employee Engagement

Since responsibility for creating and delivering the offering rests with employees, the next requirement is to ensure they are fully engaged and capable of delivering the required customer experiences. As we looked at Levitt’s model more deeply, we found that it can be used to examine the challenge of employee engagement. If employers deliver only the “Expected Offering” to employees—fair compensation, good working conditions, and reasonably competent leadership—employees may be relatively satisfied, but not necessarily engaged. Organizations and managers need to ask themselves, “What do my employees need to be fully engaged?”

To answer this question, organizations must determine the components of a Potential and even Future Potential Offering—one that generates employee engagement. Such an approach would move beyond the expected to anticipate aspects of the employment experience that even the employee might not think to ask for, including both tangible and intangible elements. For example, people might want a job where they can develop new skills, use cutting-edge technologies, contribute to improving society, or be part of a work environment where they can collaborate and make a difference.

The result would be true engagement, in which employees are:

• Inspired to feel an emotional connection to the organization’s vision and purpose
• Willing to commit their full energy to their work
• Loyal and committed to the organization

On a more practical level, what actions should companies take to achieve high levels of both customer and employee engagement?

Meeting and Exceeding Engagement Expectations

The Customer Engagement Model provides a roadmap for understanding the key elements required for a successful engagement strategy in which:

Employee Engagement results from leadership effectiveness and an engagement culture. This, in turn, leads to Customer Engagement in terms of products, process, and personal connection. The leads to results: increased market share, repeat business, more referrals, and profitability.

Creating a strategy begins with an understanding of where your organization wants to go. That is, what will be the results of better customer engagement? Will it be greater market share, better customer-back market data, or being customers’ preferred provider and trusted advisor? By creating clarity about the results and how they are measured, organizations can evaluate their efforts to create engagement.

Once the desired results have been identified and defined, your organization needs to define engagement expectations for both customers and employees. We encourage organizations to take time to document what they believe these expectations are, and then verify their beliefs through surveys or focus groups. These expectations often are unstated, so effective probing and discovery should be part of the process. Once these expectations are clear, your organization can begin the process of building the business offering to meet these requirements. You do this by aligning products, processes, and personal connections.

Engagement with your products, processes, and personal connections is more like multiplication than addition. Fail to engage in any area, and you don’t engage at all. For example, your company can have the most engaging products and processes, but if you fail to make the personal connection, you will never achieve high levels of engagement with customers. How do you create alignment? By asking yourself how customers experience the Potential and Future Potential Offering defined by your products, processes, and personal connections.

• Products: What are the distinctive qualities in your products that go beyond mere functionality and expected quality? These might be based on design aesthetics, innovation, or even a compelling corporate vision that your product or service supports. The question to ask yourself is, “What truly differentiates our offering from our competitors’ offerings?”
• Processes: How engaging is the total customer experience, from the initial search, to the decision to buy, and finally to the use of your product or service? Do your processes encourage and motivate a customer to want to engage with you? This goes beyond just making it easy to do business with you or to resolve problems. Companies should ask themselves, “Do our processes help customers identify potential needs or form an emotional connection to our organization?”
• Personal Connections: This involves more than just being courteous. It’s about providing a powerful human connection that deepens the buyer’s sense of trust and confidence in the organization. Are your customer-contact employees empowered to solve customer problems and create value-add opportunities? Does your organization create the sense that the customer has had an experience personalized just for him or her? In essence, it is about the customer seeing your employees as a source of advantage to them.

Every employee needs to know the impact of products, processes, and personal connections and how they contribute to the customer’s level of engagement. The programmer who designs the Website or the accountant who sends out bills can have as much impact on engagement as a salesperson or customer service representative in direct contact with customers.

Once the customer offering has been defined, the features required for employee engagement need to be identified and implemented.

Employee engagement comes from two main sources:

Leadership Effectiveness

Leaders are the key to engaging employees to commit their full energy to create value and success. To understand what employees need from their leaders, Wilson Learning partner Dr. Steve Buchholz asked more than 1,500 employees, in a variety of organizations, what would influence their level of engagement. The most frequent responses were:

• Working in an organization where there is a clear sense of opportunity—both for the organization and for me as an individual to engage in meaningful work
• Being clear on my focus and what is expected of me
• Feeling informed and included
• Being involved with and cooperating with coworkers
• Having a manager who takes a personal interest in me, and provides opportunities for me to develop new skills
• Having a manager who provides a positive leadership example—someone I can trust

These aspects of the day-to-day work experience are affected directly by the leader’s style, decisions, and interactions with members of the work team. You cannot have engaged employees without engaged leaders who understand what it takes for employees to choose to be engaged.

Engagement Culture

The organization’s culture also has a great influence on employee and customer engagement. Culture is defined by certain shared beliefs, practices, and behaviors common to the majority of employees. Leaders and employees alike share responsibility for cultivating the values and principles that shape the culture, but the leaders have a special role in supporting and reinforcing the kind of culture that enables employee engagement. The elements of which include:

• A Culture of Opportunity, where employees feel they are part of something important
• A Culture of Personal Accountability, where employees are expected to give their best, and are held accountable for doing so
• A Culture of Inclusion, where employees are well informed and involved, and have an opportunity to express their thoughts and feelings
• A Culture of Community, where employees feel they have the support of their colleagues, and their focus is on mutual interest and shared responsibility
• A Culture of Validation, where employees feel they matter because they have a valued place in the organization

Making the connection between employee engagement and customer engagement is critical to achieving the results you desire. A 2009 Gallup study found that organizations that had employee engagement scores in the top quartile had 18 percent higher productivity and 16 percent higher profits.

If your organization wants increased market share, repeat business, and profitability, you need engaged employees and customers. What would it mean to your organization to move from 21 percent to 30 percent, or to 50 percent of employees fully engaged? How much impact would that have?

In difficult economic times, it is easy to overlook the link between employee and customer engagement. Yet understanding that linkage is vital to any effort to protect and expand your customer base. An effective strategy to achieve those aims must be based on strong, committed leadership and a vibrant culture of engagement.

Taking Action: How to Create Customer Engagement

Understanding the factors that create customer engagement is only part of the story. You have to take action to create customer and employee engagement. In our work helping clients create greater customer engagement, we often begin with a series of questions. The answers to these questions help focus your actions and provide metrics to gauge the impact of your efforts.

1. Setting the Stage
2. What are the business results you intend to achieve through greater customer engagement?It is important to be as specific and measurable as possible. Don’t be satisfied with “greater market share”; put a figure on it: “Raise market share by 5 to 10 percent.”
3. How do/will you know customers are engaged?What will be the major indicators that your customers have formed an emotional connection to your company, are having a consistent experience with your organization’s processes, and are advocates for your company? What metrics will you use? How will you gather that information?
4. How do/will you know your employees are engaged?What will be the major indicators that your employees have formed an emotional connection to the organization, are committing their full energy, and are loyal to the organization? How will you know?
5. What are the engagement expectations of customers and employees? Do you have this documented in a “value proposition,” or, for employees, a set of values or operating principles? Where do you have this documented? This is a critical step that often is missed.
6. Customer Engagement
7. How do your products provide you with a clear competitive advantage?That is, what are your Potential Offering and Future Potential Offering?
8. What areas of the total customer experience need to be enhanced? It can be helpful to map all the ways a customer can interact with your organization (Website, customer support, sales, billing, etc.) and see if these avenues support the engagement expectations.
9. Do your customer-contact people epitomize the engagement expectations? How do you know that the people with the personal connection to customers have the skills and the perspective to deliver on the engagement expectations? What skills need to be developed?
10. Employee Engagement
11. How do you know if your leaders and managers have the ability to fully engage employees?Have you defined and assessed the leadership skills your organization needs?
12. What actions can you take to build an engagement culture?

Tom Roth is president of Global Solutions Group for Wilson Learning Worldwide. He has more than 30 years of experience developing and implementing human performance improvement solutions. He assists executive leadership teams with issues related to employee engagement, sales force effectiveness, leadership development, strategy alignment, and business transformation. For more information, visitwww.wilsonlearning-americas.com