Allegiance Blog

In the consulting work that I do with companies, I find that businesses looking for ways to increase their sales and profits often overlook a critical ingredient: employee engagement.

The reason this is an important ingredient is because there is a direct connection between employee engagement and customer engagement, otherwise known as “The Spillover Effect”.

For example, in their book, Return on Customer: A Revolutionary Way to Measure and Strengthen Your Business, Don Peppers and Martha Rogers, founders of management consultancy Peppers & Rogers Group, emphasize that “Motivated employees are clearly more productive and keep a company’s employee churn rate down, which lowers expenses. Yet they also have a profound impact on customers as well by creating positive experiences through efficient and smart customer service.”

And, my colleague, Dr. David Whitlark and I, have also found this to be true. For example, in a large research study that we conducted on engagement, we found that one out of every 10 customers was hurt by disengaged employees. We also found that the work environment combined with employee attitudes has a significant impact on a customer’s perception of quality. For this reason, it’s important that companies lead with their strengths, emphasize the positives, and remove the barriers that lead employees to be disengaged with their jobs, their organization and customers.

After all, in the end, the Spillover Effect is much more than a discussion about employee happiness. It is about emotional engagement that is continually shared from employee to employee, employee to customer and customer to customer. And it is a concept that encompasses and impacts all aspects of a business, ranging from company culture to profits.

Companies that understand and leverage the Spillover Effect to their advantage will realize higher customer and employee engagement, and ultimately, greater profits.

To learn more about this topic, read the new Allegiance “Spillover Effect” white paper.

Dr. Gary Rhoads, Allegiance Loyalty and Engagement Expert

In the current economy, there is a very real and growing concern about how to gain and to keep customers. This was apparent at the 2008 North American Conference on Customer Management (NACCM) this year, with attendance lower than it has been in some time. The irony is that much of what was presented provided insight on how to reach out and hold on to customers during tough times.

In stressful times such as these, many companies tend to pull away from their customers, and may even cut back on ‘satisfaction and loyalty’ programs to try and improve their bottom line. This, unfortunately, is a mistake because it cuts at the very heart of what we all need to be doing during this time – engaging customers to the point that they are willing to ride out tough economic times with us, rather than viewing us as yet another business that really doesn’t care about its customers and is willing to drop them or cut out the programs and products they care about most as soon as times get tough.

This was part of the overarching message at NACCM, including a conference speech I gave on engagement—that it’s important to continue to invest in improving customer engagement. However, one must be smart about how one goes about it. And the five most important take aways from this year’s conference were:

Engaging your customers (moving beyond ‘satisfaction’ and ‘loyalty’) will create a relationship between your customers and your company and/or its product that will help you weather the economic storm or even any mistakes your company may make – engaged customers really do stick with you and spend more money!

Use tools that are as effective as possible with the least expense (web-based tools are ideal for this) – tools that will not only provide you with data, but will help point you toward what is really going on with your customers

Don’t just ‘survey’ your customers – use tools that will provide you with leading indicators that will allow you to predict how a much larger group of customers will react based on the responses of a smaller group.

Don’t forget your employees! Engaged employees have a positive effect (a ‘spillover effect’) on the engagement of your customers.

Engaging your customers means taking action –Even small improvements can mean an increase in your customer’s share of wallet, positive word of mouth and referrals and increased retention and productivity from employees

The key in all of this is to overcome the reactionary fear that comes with a downturn in the economy and to look beyond. By spending smarter and in the right areas (what area is more important than those people who allow us all to be paid?) we can do more than survive…we can continue to thrive.

Kevin Mellander, Director Customer Care, Allegiance