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Article -> Happy Salespeople Create Happy Customers

Date Added: August 2006

“If they’re happy, satisfied, dedicated and energetic; they’ll take good care of customers. When the customers are happy, they come back, and that makes shareholders happy,” according to Herb Kelleher, the legendary founder and former CEO of Southwest Airlines.
 
Kelleher’s observation is part of conventional wisdom formulating the link between employee engagement and complete customer satisfaction. This connection is known as the service-profit chain. It begins with engaged people creating completely satisfied customers. In turn, these customers become loyal supporters of the company, resulting in increased value. This model helps leaders target specific customer service areas for development, leading to superior service levels, resulting in significant gains in the market.
 
This model suggests that profit and growth are primarily stimulated by customer loyalty, customer loyalty is a direct result of customer satisfaction, and customer satisfaction is triggered by the value of employee-created services and products. The SPC helps managers target new investments to develop service satisfaction levels for maximum competitive impact, widening the gap between leaders and their competitors.
 
Prerequisites for Happy Customers
Numerous studies support the claim that employees with favorable attitudes provide better customer service, and in most cases, improve the quality of customers’ experience. For example, an analysis of 800 Sears stores discovered a 5% increase in employees’ attitude scores resulted in a 1.3% increase in complete customer satisfaction and a 0.5% increase in revenues.1 Another study reported that 40-80% of customer satisfaction and loyalty was determined by the employee-customer relationship. The broad range was a result of the variance by industry.¹
 
The level of involvement by your people can also influence relationships with your customers. Highly involved salespeople perceive their territories to have higher market potential, more intense competition, and greater levels of complete customer satisfaction. In addition, the frequency of contact between salespeople and customers has an impact on the strength of the relationship. Complete customer satisfaction can increase as a salesperson’s empathy, expertise and reliability increase.
 
Complete Customer Satisfaction
While salespeople typically have the closest contact with customers, another study determined that the more fairly employees believed they were compensated, the better they performed routine aspects of their jobs and were likely to perform beyond expectations. Work environment plays a role in people’s satisfaction. Negative leader feedback, job challenges, work involvement, and self-efficacy were related to effort put forth on the job.
 
A Return on the Relationship
The strength of a customer’s relationship with the salesperson affects repeat business, recommendations, and probability of paying a premium price for products. Not all employee-customer relationships are the same, and trust is critical in building those that endure. Salespeople are also important in reducing customer desertion to competitors. The quality of the salesperson-customer relationship positively affects customers’ assessments of their relationship with your organization.
 
Positive Results
While these findings indicate an obvious link between employee satisfaction and customer satisfaction, it is important for people within your organization to understand the positive implications as well. A culture of putting customers first will usually result in more effective business results than one that is less customer-focused. Some ideas include:
  • Creating a positive corporate culture
  • Encouraging employee feedback
  • Defining criteria and expectations
  • Limiting the number of leaders that people report to
  • Supplying adequate resources to people to do their job efficiently
  • Increasing wages and benefits
Of course, these initiatives have costs. So, it’s important to determine the return on investment to develop meaningful employee-customer relationships.
 
 
1Johnson, William C. and Larry G. Chiagouris, Don E. “So Happy Together.” Marketing Management. March/April 2006: 47-49.
 
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