Engage Your Front Line To Increase Your Bottom Line
Via Forbes : Engage Your Front Line To Increase Your Bottom Line
Your frontline employees, like your sales associates, technicians and customer service reps, often know what’s wrong in your company before you do. They can tell you what delights customers and what frustrates them and, perhaps more importantly, they can tell you “why.” They can tell you why some customers are buying more of your services, while others are returning products, canceling contracts, and taking their business elsewhere.
The problem is that many companies aren’t listening.
Engagement, loyalty, and the bottom line
Fred Reichheld, creator of the well-known Net Promoter System, says companies “can’t earn the loyalty of customers without first generating enthusiastic engagement and loyalty from employees, especially frontline employees.” The evidence bears this out. When the Medallia Institute compared employee engagement and customer loyalty across more than 130 retail outlets, we found that stores with more engaged employees, measured by the likelihood that they would recommend the store as a place to work, had customer loyalty ratings that were 12 percent higher than stores with less engaged employees. Stores with high employee engagement also achieved greater increases in customer loyalty year-over-year, while stores with low employee engagement saw loyalty drop.
A five percent increase in customer loyalty can increase a company’s profitability by 25 to 95 percent, according to Bain & Company. That’s a nice boost to your bottom line.
The unique, untapped value of frontline employees
To increase customer loyalty, companies often turn to market research firms and expensive analytics to determine what their customers like and dislike. Market research and fancy algorithms might be able to tell you how satisfied your customers are, but they rarely tell you how to change your operations to make things better. Fortunately, your frontline employees can.
To understand why, and what creates greater customer-centric engagement at the front line, we surveyed 1,000 customer-facing employees across five U.S. industries—automotive, banking and financial services, retail, telecommunication services, and travel and hospitality.
While 78 percent of employees surveyed said their leaders had made customer experience a top corporate priority, nearly 60 percent also said their ideas for improving the experience often went unheard. These included ideas for delighting customers in new ways (61 percent), improving processes or practices to enhance the customer experience (56 percent), or providing better training so that employees could serve customers more effectively (47 percent).
As in most things, the devil is in the details. Many executives know they ought to be engaging their front line more effectively, but how? Our research suggests that the secret to enthusiastic, customer-centric engagement is empowering frontline employees to make a difference, which starts with listening to them. Based on our survey, we offer four practices that can help you find the way to happier customers through the voice of your employees.
1. Solicit feedback regularly. In our study, 51 percent of frontline employees said they had suggestions for improving customer satisfaction at least quarterly, and 22 percent said they had feedback to share weekly or even daily. Yet nearly 20 percent said their companies never asked for their thoughts on improving customer service, and a third said they were asked for their opinions once a year or less. Thirty years of research have shown that employees are highly accurate in their assessments of customer satisfaction and the quality of their company’s service delivery. If you give them more opportunities to share their insights and suggestions, you’ll be far better equipped to understand and respond to your customers.
2. Ask the right questions. Even when companies do ask frontline employees for feedback, they often ask about inconsequential things that have little impact on the business. Less than half of the employees we surveyed (46 percent) said their companies asked the “right” questions when asking for feedback. Instead, employers tend to ask generic, often irrelevant, questions that offer little opportunity to provide meaningful input. The best way to solicit feedback from employees is to ask questions about relevant, actionable topics that are central to their ability to deliver a great customer experience.
3. Communicate before and after. Only three out of five frontline employees said their company shared the results of employee surveys, and only half said the company informed them about actions taken in response to the feedback. When companies fail to keep employees informed about what they’re doing in response to feedback, employees stop providing their input. If you think your ideas go into a black hole, why bother to give them? This not only diminishes the quality of feedback loops, it also slows learning. Knowing which suggestions are being acted on allows employees to track the ideas that are implemented, assess their impact, and calibrate accordingly, thereby improving future suggestions.
4. Take action. Perhaps the worst thing you can do is ask employees for input and then do nothing with it. But that’s precisely what many companies do. Thirty-three percent of the people we surveyed said their company never took action on employee feedback and another 24 percent said it acted once a year or less. Perhaps most surprising: Less than half of frontline employees said they could count on their leaders to remove obstacles to delighting customers.
A poorly managed employee feedback system can be more detrimental than having no system at all: It sends a strong signal that employee suggestions are not valued and that management is only paying lip service to creating a great customer experience. If management doesn’t care about improving customer service, why should employees?
On the flip side, if you ask your employees for ideas to improve the customer experience, make use of the best suggestions, and communicate what actions you’re taking and why, your efforts will go a long way toward increasing customer-centric engagement among employees, and also dramatically improve your ability to deliver a great customer experience.
A recent Gallup review found that business units in the top quartile of employee engagement had 10% higher customer loyalty and 20% higher sales than those in the bottom quartile. Our results suggest that listening and acting on feedback from your front line is a great place to start building engagement, loyalty, and your bottom line.
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