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
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:
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:
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.
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:
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:
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.
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:
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.
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