Nearly all companies are concerned about employee turnover; and, with the worldwide economy in recovery, it has become a priority. In some industries – notably retail, customer service, and hospitality – annual staff churn rates of 30% to 40% and more are not uncommon, and even considered acceptable. While this situation may be a reality in many companies, it isn’t a very sound strategy, and from multiple perspectives:
- The value employees can bring to customers is diminished
- The breakdown in customer-staff continuity and trust when employees leave
- The negative cultural effect of turnover on other employees
- The real ‘total cost’ of losing employees, including hiring, training/coaching, productivity
So, retention has become a huge issue today. We should be concerned about it, of course; but we also need to focus on the degree to which employees who stay with a company are directly and indirectly contributing to customer loyalty behavior.
Numerous studies have been conducted on elements of employee value, addressing reward and recognition, job fit, career opportunities, work environment, departmental and management relationships, etc.. It is pretty much conventional wisdom that, during this period where there is great demand for exceptional talent, especially individuals who are diligent, innovative, and customer-focused, successful companies will also have loyal employees.
Twenty years ago, consulting organizations began moving away from employee satisfaction to employee engagement as a focus, on the theory that employees who were well-trained, well-compensated, aligned with the company’s business goals, and involved in the organization’s direction would be contributory and solid team players. That said, much of engagement research has not been able to prove (beyond incidental connection) that, while having happy and aligned staff is sufficient for somewhat higher levels of employee retention and productivity, engagement, in and of itself, only marginally connects to optimum customer loyalty behavior.
One of the shortfalls too often seen in engagement, particularly as this type of research applies to optimizing customer experience, is that, even if employees are trained in brand image, this does not mean they will deliver on the product or service value promise to customers or other stakeholders. Image needs to be integrated with building a culture of true customer focus. In other words, the external brand promise has to be experienced by customers every time they interact with the company.
Can companies, through employee research, learn how to prioritize initiatives which will generate optimum staff commitment to the company, to the brand value promise, and to the customers?
If employee satisfaction and employee engagement aren’t specifically designed to meet this critical objective, and only tangentially correlate with customer behavior, can a single technique provide the means to do that? The answer to both questions is: Yes, through employee ambassadorship research. Employee ambassadorship has been specifically designed to both build on employee satisfaction and engagement and bring the customer into the equation, linking employee attitudes and actions to customer loyalty behavior.
Employee ambassadorship, or employee brand ambassadorship, has direct connections to – yet is distinctive from – both employee satisfaction and employee engagement. As a research framework, its overarching objective is to identify the most active and positive (and inactive and negative) level of employee commitment to the company’s product and service value promise, to the company itself, and to optimizing the customer experience.
The ambassadorship thesis, with its component elements, can be displayed as follows:
- Commitment to company – Commitment to, and being positive about, the company (through personal satisfaction, fulfillment, and an expression of pride), and to being a contributing, loyal, and fully aligned, member of the culture
- Commitment to value proposition – Commitment to, and alignment with, the mission and goals of the company, as expressed through perceived excellence (benefits and solutions) provided by products and/or services
- Commitment to customers – Commitment to understanding customer needs, and to performing in a manner which provides customers with optimal experiences and relationships, as well as delivering the highest level of product and/or service value
Ambassadorship is very definitely linked to the productivity and empowerment elements of employee satisfaction, engagement, and alignment research; however, it more closely parallels achievement of business results and value-building because its emphasis is on strengthening customer bonds through direct and indirect employee interaction.
In addition to employee motivation, cohesion, productivity and alignment with corporate values and culture, Human Resources is perhaps most interested and focused on learning how to increase staff loyalty. Our staff research (among thousands of adult employees, in almost 20 different industry sectors) identifies employee loyalty level through three specific metrics: rating of the organization as a place to work, likelihood to recommend the organization to friends or family members as a place to work, and level of felt loyalty to the organization. Overall, in a major study of staff ambassadorship, 18% of our respondents exhibited high loyalty to their organizations, and 20% exhibited low loyalty; and, importantly, there were strong, almost polar opposite differences in organizational loyalty depending on whether an employee was categorized as an ambassador or saboteur, validating ambassadorship framework results:
Employee Loyalty* by Ambassador Group
*Comprised of the three metrics used to calculate employee loyalty
These are definite ‘pay attention’ findings for HR. It’s a concern, of course, that almost 20% of employees have low organizational loyalty; however, it’s an even greater challenge that there is three times the level of potential staff turnover among saboteurs, who, before they depart, will undermine the performance and loyalty of other employees. Our research provides very specific insights into why this is occurring. At the same time, the organization will be very well-served to emulate the behaviors and attitudes of ambassadors through the rest of the culture.
Commitment to the company, in the form of loyalty and related attitudes and behaviors, is a fairly basic requirement for employee ambassadorship. Commitment to the value proposition and to the customer are parallel key elements of ambassadorship (which we will describe in future blogs), and our research has identified equally powerful results in these areas. What actions should companies be taking with insights such as these? Here are several;
- Employees, at all levels and in all functions need to have a thorough understanding of what’s important to customers so that their actions match customer expectations and requirements.
- Employees’ behavior needs to be aligned around customer experiences
- Management must build processes, technology, training, and organizational/cultural practices that support employees being able to optimize customer experience
Perhaps most of all, companies should evaluate the effectiveness of rules and metrics associated with delivering customer value. For instance, how effective is the company, and employees, at unearthing and resolving unexpressed complaints which may be undermining customer loyalty? How are non-financial metrics viewed relative to financial ones? What types of automated support processes exist, and how well are employees trained in them, to make serving customers easier? How does the company balance taking care of existing customers, particularly those who may be at risk of defection, with acquiring new ones? How much cross-functional collaboration exists in support of the customer?
For companies to create and sustain higher levels of employee ambassadorship, it’s necessary to have customer and employee intelligence specifically designed to close gaps between customer experience, outmoded internal beliefs, and rudimentary support and training. It’s also essential that the employee experience, especially vis-à-vis customers, be given as much emphasis as the customer experience. If ambassadorship is to flourish, there must be value, and a sense of shared purpose, for the employee as well as the company and customer – in the form of recognition, reward (financial and training), and career opportunities.
If this subject interests you, why not register for our next webinar ‘Employee Ambassadorship: Generating and Delivering “Wow” Customer Experiences’, where I will discuss Employee Ambassadorship in more detail.
|Michael Lowenstein provides strategic consulting, research design and in-depth, leading-edge analysis that helps clients deliver outstanding business results through deeper customer experience, communication, relationship, employee and brand equity insights. Beyond Philosophy provide consulting, specialised research & training from our Global Headquarters in Tampa, Florida, USA.