DISENGAGED EMPLOYEES COST CUSTOMERS

Change the way the world works

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The social world has redefined customerexpectations.

Customers’ expectations today are remarkably different to the way they were in the seller-dominated marketplace of just a few years ago. The way companies and consumers interact as a result of a social, mobile and global marketplace has put the customer in complete control.

Customers now expect companies not only to meet their every day demands, but to anticipate their future needs before they have to ask. If companies don’t take the special care necessary to meet customer needs, they find themselves dropped - a phenomenon that’s happening more every year.3

Customer service is as important as price.

Today, your customers have the power to influence your reputation as never before - for better or for worse. They demand more from businesses than product relevance and an 0800 number. Today’s marketplace has made it not only impractical, but also unrealistic for brands to try to differentiate themselves on product or price alone.4

Consumers now want - and expect - an experience that delights them: engagement that can develop into a thriving relationship. Customer service employees - whether they are on the phone, in store or online - must listen carefully to consumers’ concerns, immediately resolve their issues and do all of this in a way that comes across as genuine.

Universally, when it comes to finding and keeping customers, customer experience and price are now tied as the most important factors. That’s very different from how it was in yesterday’s marketplace.5

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MAKE AN IMPACT ON BOTH CUSTOMER SERVICE AND BUSINESS RESULTS.Poor customer service costs UK businesses £15.3 billion a year.1

(Alcatel Lucent)

For the UK economy to grow, businesses will have to focus on customer service. 78% of UK’s GDP is derived from the service sector, with 70% of UK employees having direct contact with customers.2

(Institute of Customer Service)

DISENGAGED EMPLOYEES COST CUSTOMERS

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It’s time to put customer service on a pedestal.

Customers are the new market gurus: their demands and ideas need to be the driving force behind your business goals, rather than the other way around. The global marketplace has changed and it’s time for businesses to respond.

Here’s what you need to know about the modern consumer:

1. YOUR REPUTATION IS COMPLETELY IN THEIR HANDS. Before you even know they’re interested, consumers already know everything there is to know about your business that’s relevant to their purchase, regardless of your PR strategy or your ‘secure’ R&D lab. They’ve Googled your products and services for price and quality, reviewed your customer service faults and follies on Yelp, and researched your corporate culture on Glassdoor.

Word-of-mouth continues to be the number one influencer of purchase decisions (84 percent of consumers are swayed by word-of-mouth offline and online)8, and consumer ‘communities’ are expanding rapidly. Today, more and more customers take to social networks to solicit and express opinions about experiences with brands. A recent study in the US found that more than a quarter of consumers (26 percent) had posted a negative comment on social media sites like

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PUT EMPLOYEES FIRST TO WIN CUSTOMERS.

Most companies (other than a few high-profile exceptions) have a lot of work to do in their customer service departments before they will be considered lovable brands. That’s because service workers are typically the least engaged part of your workforce. This means that your customer-facing employees are the people in your company who are least likely to be giving their job everything they’ve got, going the extra mile to solve customer issues or staying with you long enough to develop meaningful relationships with your customers.6

Putting your employees first will foster stronger relationships between you and them and, in turn, inspire them to go that extra mile for your customers. By engaging, aligning, and recognising your employees with the Achievers Employee Success Platform™, you can join a growing group of top-tier employers who are committed to engaging employees to achieve higher levels of customer satisfaction and greater business success.

Consumers are able to exercise their power as never before. In 2013, a rapidly growing number of consumers turned to the public forum of social media to communicate with organisations, expecting rapid responses to their queries and complaints.7

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Facebook and Twitter after a poor experience, influencing hundreds (and more likely thousands) of friends and followers.9 By focusing on generating positive social media buzz from repeat customers through exceptional customer experiences, you stand to earn millions in otherwise lost revenue.10 Create a band of customers who promote you (‘Like’ you) to reap the benefits of wider social communities. A one-star increase on a business’s Yelp page can equate to as much as a five to nine percent increase in revenue.11

2. THEY’RE WELL-ACQUAINTED WITH YOUR COMPETITORS. Your business does not exist in a vacuum. Your customers are well aware of what an exceptional customer experience looks and feels like. If they haven’t purchased from Amazon or Apple, they’ve certainly visited Alton Towers or eaten at Wagamama, shared a coffee at Costa or loaded up their supermarket trolley with Innocent’s drinks products.

As more and more companies start investing in providing excellent customer experiences, your customers are wondering why you don’t – before they shrug and choose your competito.

These brands represent the gold standard for customer service, and their balance sheets reflect their efforts. Brands like Apple, with exceptional Net Promoter Scores (a key indicator of excellent customer service levels),13 enjoy 20-60 percent higher growth than their competitors.14 Take a cue from Tony Hsieh, CEO of the highly successful US online clothing retailer Zappos, and author of customer experience bible ‘Delivering Happiness’: “If you figure out how to make employees happy and customers happy, then the business just kind of takes care of itself.”15

3. …AND YOU HAVE MORE COMPETITION THAN EVER. The new social and mobile economy has made global connectivity commonplace. Companies on different continents are now rivals. Consumers can get any product or service they desire from just about anywhere. Geography is no longer a competitive advantage.

Modern companies are reacting to customer feedback in real time, reinventing the way business works minute by minute and finding ways to make products and services better, cheaper, and easier to obtain. To triumph over competitors who may be anywhere in the world, as well as technologically-enabled brands popping up on a daily basis (eg. Liftshare, Uber, TaskRabbit), delighting existing customers, and creating a clearly superior customer experience for future customers, is paramount.

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Serco demonstrated a direct relationship between employee engagement and the Net Promoter Score (a measure of customer loyalty). Contracts serviced by employees whose engagement had improved over the year had NPS scores 24% higher than those employees whose engagement had declined.12

Serco & Aon Hewitt - study on 274 Serco client contracts

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The ‘Switching Economy’

As a result of changing customer demands and increased access to information about businesses and their competitors, we have entered what consulting firm Accenture terms a ‘Switching Economy’. Companies aren’t keeping customers satisfied enough to hold on to them. In the past year alone 66 percent of consumers, globally, switched companies they do business with. That’s up four percent from the previous year. The number of consumers who switch provider companies has risen each year for the past ten years... and shows no signs of slowing.16

It’s not price or product that’s driving them away. Poor customer experiences are sending them running into the arms of competitors. 81 percent of consumers who switched a pro-vider said the company they left could have done something, other than drop prices, to keep their business.18

So let’s break it down: why do customers leave a provider? Today’s customer frustrations leading to break-ups cover the full spectrum of customer service issues:

A 2014 UK study from the Institute of Customer Service found that creating a positive customer experience had a marked effect on customers’ purchasing decisions - 62% who had good experiences bought again from the organisation and 51% bought an additional product or service. In contrast, 77% of respondents who have a memorably bad experience subsequently avoid the company when they get the chance. In addition, 69% of people who have a memorably good customer service experience with an employee go on to make recommendations to others.20

In the retail food sector, companies with higher than average UKCSI scores achieved a year-on-year sales growth of 9% compared with 3% for those with lower than average scores. There is a higher correlation between greater customer satisfaction, recommendation and intention to repurchase.17

UKCSI - UK Customer Service Index, 2014

Industries most at-risk of customer switch due to poor experiences:

Consumer goods retailers

Cable & satellite providers

Retail banks

Landline phone companies

Internet service providers

(Accenture)

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of consumers get frustrat-ed by having to contact a

company multiple times for the same issue

91%90% 87%

become annoyed with being put on

hold for a long time.

get angry over service that’s unfriendly

or impolite.19

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Become a customer service powerhouse

Opportunity exists in today’s underwhelming customer service landscape. Only one percent of consumers in 2013 reported that their expectations regading customer experience were always met. And they’re clamouring for positive experiences: 89 percent of consumers claim they would do business with a competitor after receiving poor customer service, and 86 per-cent are willing to pay for a better experience.21

What customers demand is simple - good quality, genuine care from customer service representatives who:

Respond to their needs in a timely manner.

Know the answers to inquiries, or find them the answers immediately, the first time.

Solve the issue on-the-spot.

Deliver with a smile.

Provide them with an easy channel to give feedback, either positive or critical.22

Make your call centre, shop floor or reception desk the outstand-ing place to get looked after, and watch your competitors’ former customers flock to you. By mastering the art of exceptional cus-tomer service with happy, knowledgeable representatives who go the extra mile to deliver happiness, you can take a giant step towards the winners’ podium.

A foundation of employee engagement boosts customer happiness.

Delighting customers is imperative if you want to thrive in today’s marketplace. The faces (and voices) of your customer-facing team represent the most intimate and emotional connection you have with your customers. In order to induce repeat business, your employees must be engaged, aligned to the company values and business objectives and recognised for behaving in ways that impact how your brand is viewed. That means making employees, and their proper engagement, your number one priority. Engaged employees are emotionally connected to the brand, committed to the company’s success and enthusiastic about the business’s mission. They work harder: 96 percent of highly engaged employees always or almost always try their hardest at work, compared with only 71 percent of disengaged employees.23

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1% of consumers in 2013 reported that their expectations for customer experiences were always met.

DISENGAGED EMPLOYEES COST CUSTOMERS

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Unfortunately, front-line workers tend to be the least engaged employees across the entire workforce. Only five percent of customer service workers report feeling passionate about their work.24 In order to truly thrive in today’s service-oriented marketplace, you need to bring engagement scores up - a long way up - and inspire your customer service team to deliver exceptional experiences.

Why your front line is disengaged - and how to fix it Employee needs and desires are changing in parallel with con-sumer attitudes, meaning that old-school engagement strategies no longer work. Over-supervised and under-motivated employ-ees don’t feel compelled to go the extra mile to solve customer issues, or display the sort of care and service today’s customers expect.

Here’s why your employees are disengaged, and how you can turn them into your biggest fans and best advocates:

1. THEY FEEL DISCONNECTED FROM THE COMPANY’S MISSION. Only 37 percent of employees understand what their company stands for and why, though this is a key element to engaging em-ployees.26 Re-energise your employees’ enthusiasm by defining your company’s mission and values clearly and communicating them to your workforce at every opportunity. Have managers meet with employees to make sure each individual has a clear idea of where and how they add value.

2. THEY’RE MICROMANAGED, NOT EMPOWERED. Holding employees to strict policies makes them feel unappreci-ated and ineffective. Develop frameworks that align to your com-pany values and encourage overall business results. Then, let them work within these. They’ll feel empowered to do the right thing for your company, and drive results along the way.

3. THEY DON’T FEEL VALUED. Employees today need to know you think they’re doing a great job if you want to motivate them (the number one reason employees leave is because of a lack of recognition).27 Show them their value by recognising results as they happen (as opposed to in an annual review), and connecting their accomplishments with the business’s success. They’ll show their appreciation by working harder.

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NHS Sector Research

Recent research shows that patient satisfaction is significantly igher in NHS trusts with higher levels of employee engagement. These high-engagement trusts also had lower standardised patient mortality rates - approximately 2.5% lower than in those with medium engagement levels.25

(NHS Staff Management & Health Service Quality)

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4. THEY RESENT THE CORPORATE LADDER. Bureaucracy is a motivation killer. Today, employees want to be able to share their insights, feedback and praise with any-one in the organisation, including peers, managers and leader-ship. Enable communication across hierarchical boundaries and you’ll create an environment that encourages ideas, coaching and cross-functional teamwork.

Today’s employees are looking for more than just their paycheck: they want to have impact and feel empowered to exercise their own judgment to help drive the business. Happy employees understand the company’s value proposition, goals and strategies, and are clear on how their own roles and activities contribute to the business’s success. By providing customer service employees with the tools they need to feel empowered, valued and connected, you’ll create engaged employees who are more committed to delivering customer happiness. Every day.

Make it happen with an employee success platform

The Achievers Employee Success Platform engages, aligns, and recognises employees, boosting customer happiness by moti-vating employees and inspiring them to live your company values day to day. The Platform acts as a 360-degree communication hub, increasing visibility for every employee, as well as tracking and measuring connections, milestones, and company results. Employees have insight into the business results that they influence, as well as the value they add to the company.

Social employee recognition is encouraged in every direction: peer-to-peer, manager-to-leader, and in every other direction imaginable. By linking recognitions to your company’s core values, you reinforce the importance of those values and en-courage repetition of those behaviors, creating a stronger, more sustainable culture that truly lives up to your brand promise. By recognising accomplishments and business results you involve employees in the bigger picture, encouraging them to solve customer problems on the spot, in a way that makes sense for the business’s overall goals.

The Employee Success Platform also enables customisable, automated programs that are tied to specific business results such as customer service, sales, retention, or loyalty. These pro-grams can be run across a week, a quarter or a season, motivat-ing employees to behave in specific ways that achieve business results by recognising and rewarding their efforts. This makes them feel good - and delights your customers.

Transparency and communication matter in employee engagement.

An alarming 50% of employees think that a lack of transparency is holding their companies back.(Forbes)

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SERCO DEMOSTRATES THE IMPACT OF EMPLOYEE ENGAGEMENT TO CUSTOMER SATSIFACTION

Serco is a FTSE 100 international service company with more than 100,000 employees in over 30 countries. In 2011, along with Aon Hewitt, they measured 264 UK and European contracts and their Net Promoter Scores (NPS). NPS measures customer loyalty by asking customers if they would recommend the company to others. Those who score highly are ‘promoters’ of the company, whereas those with a low score are ‘detractors’.

As you can see, there is a direct correlation between the level of engagement and the NPS results. Contracts delivered by engaged employees demonstrated much more customer loyalty than those delivered by less engaged employees.28

Customer happiness starts with employee happiness. Achieve them both.

The first step to making your customers happy is to make your employees happy. Engaged employees are committed to serving your company’s business objectives and strategies, specifically by doing things that make your customers smile, buy, and come back for more.

They’re also more empowered to meet customer demands when they arise, either in-store, over the phone or via chat; before, during, or after a purchase. When they’re empowered, aligned with the company’s goals and values, and appreciated through recognition, they’re more likely to go out of their way to solve a customer issue cheerfully, and to thank customers sincerely for their business. And then you can move on to step two: business success.

See how major supermarket group Save Mart united its employees in 221 stores, achieving 112% growth in customer satisfaction ratings across all stores.

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See how Save Mart aligned its employees with the company’s initiatives, objectives, and vision.

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Under 30% of employees engaged

30 - 40% of employees engaged

45 - 64% of employees engaged

65% or more of employees engaged

40%

-30%

-20%

-10%

0%

10%

20%

30%

2011 Net Promoter Score

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Sources1. Poor Customer Service Costs UK Businesses £15.3 Billion per year. Alcatel

Lucent. 2009. http://www.alcatel-lucent.com/press/2009/001794 2. Customer Service in the UK - A Review of 2013 and Predictions for 2014.

Institute of Customer Service. 2014.3. Accenture 2013 Global Consumer Pulse Survey: Global & U.S. Key Findings.

Accenture. 2013.4. 2011 Customer Experience Impact Report. Oracle. 2011.5. Accenture 2013 Global Consumer Pulse Survey: Global & U.S. Key Findings.

Accenture. 2013.6. Sager, Ira. Forget Employee Engagement; U.S. Companies Need Passionate

Workers. BusinessWeek. 19 Sept 2013.7. Customer Service in the UK - A Review of 2013 and Predictions for 2014.

Institute of Customer Service. 2014.8. Under the Influence: Consumer Trust in Advertising. Nielsen. 2013.9. 2011 Customer Experience Impact Report. Oracle. 2011.10. Accenture 2013 Global Consumer Pulse Survey: Global & U.S. Key Findings.

Accenture. 2013.11. New Study Reinforces Value of Yelp for Businesses. Yelp. 2012.12. Rayton, Bruce; Dodge, Tanith; D’Analeze, Gillian. The Evidence: Employee

Engagement Task Force Nailing the Evidence Workgroup. Engage for Success. 12 Nov 2012.

13. Measuring Happiness. Bain. 2012.14. How is Net Promoter Score related to growth? Bain. 2012.15. Measuring Happiness. Bain. 2012.16. Accenture 2013 Global Consumer Pulse Survey: Global & U.S. Key Findings.

Accenture. 2013.17. Customer Service in the UK - A Review of 2013 and Predictions for 2014.

Institute of Customer Service. 2014.18. Ibid.19. Ibid.20. Employee engagement and its influence on customer satisfaction and buying

behaviour, Jan 2014. http://blog.instituteofcustomerservice.com/2014/01/08/are-you-beingengaged-2014/

21. Ibid.22. Accenture 2013 Global Consumer Pulse Survey: Global & U.S. Key Findings.

Accenture. 2013.23. Temkin Employee Engagement Index (TEEI) Temkin Group. 2013.24. Sager, Ira. Forget Employee Engagement; U.S. Companies Need Passionate

Workers. BusinessWeek. 19 Sept 2013.25. West, M., J. Dawson, L. Admasachew and A. Topakas, NHS Staff Management

and Health. Service Quality: Results from the NHS Staff Survey and Related Data, Department of Health. 2011

26. Covey, Stephen. The 8th Habit: From Effectiveness to Greatness. Free Press. 2004.27. Sylvester, John. The Number 1 reason employees leave a company is from lack of

recognition. HR Zone. 19 July 2011.28. Rayton, Bruce; Dodge, Tanith; D’Analeze, Gillian. The Evidence: Employee

Engagement Task Force. Nailing the Evidence Workgroup. Engage for Success. 12 Nov 2012.

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Achievers delivers the only true cloud-based Employee Success PlatformTM, a powerful new way for companies to engage, align,

and recognise employees, enabling remarkable business success. Every day.

Learn how your company can change the way the world works at www.achievers.com.

91%

MEMBER SATISFACTION

83%

MEMBER ADOPTION

110

COUNTRIES SERVICED

81

NET PROMOTER SCORE

98%

CLIENT RETENTION

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