How Employee Engagement Can Build Customer Loyalty

For most businesses, a loyal customer base is essential to success. Loyal customers empower businesses to thrive and deliver better programs, products, and solutions for further success. Obviously, without customers, businesses wouldn’t exist. However, without the effort of loyal and dedicated employees, businesses wouldn’t exist either, which begs the question: what is the relationship between employee engagement and customer loyalty?

Simply put, engaged and motivated employees positively affect the way your customers perceive and interact with your business. Therefore, employee engagement is essential for attracting customers and building loyalty.

Think about it, if employees aren’t engaged and satisfied with your company, they won’t be motivated to perform to their full potential. Your employees are often in direct contact with customers, which means they are ambassadors for your company. Whether your employees are passionate and motivated or apathetic and disengaged, all your customers know is that they represent your company.

There has been a considerable amount of research conducted to determine the relationship between employee engagement and customer recognition:

– IRACST (International Journal of Research in Management & Technology) created a model that discusses customer loyalty through customer engagement. They concluded by stating that incorporating employee engagement practices will help employees focus on achieving customer satisfaction and also retain customers through their relationships with them.

– According to a study conducted by Demand Metric, companies with employee engagement levels of over 50% (which is high) retain over 85% of their customers.

– In their meta-analysis (2009), Harter et al. discovered that business units that scored in the top 25% on employee engagement had customer ratings 12% higher than business units scoring in the bottom 25% of engagement.

From the research, we can see the importance of employee engagement on customer loyalty and retention. Consequently, for companies to succeed in customer loyalty, they must find ways to attract quality employees and improve staff performance. This is achievable by placing a focus on employee engagement.

Here are 5 great ways to increase employee engagement in your company:

Highlight Positive Capabilities of Employees
Make your employees feel valuable and appreciated by highlighting and encouraging them to use their abilities. People want to know what they are good at and how they can use their talents to help the company succeed. Employees can often be blinded to their own talents, partly from comparing themselves to others; however, highlighting their unique gifts empowers employees and builds a sense of pride and confidence in their work.

Create an Environment of Open Communication
Conduct meetings, training sessions, town halls, and newsletters to keep employees in the loop. When your employees understand your company’s goals and objectives, they can work together with you to meet these goals and objectives.

Open communication also prevents uncertainty. Uncertainty paralyzes employees because they lack the necessary information to move forward. Creating a culture of communication also enables both employers and employees to ask questions that can often lead to great ideas and major improvements in the company.

Communicate Company Culture
Clearly communicate the company’s culture and values. If employees don’t understand the company culture, they’ll find it difficult to fit in. It’s essential for employees to understand what the company stands for and what is expected of them individually and collectively in the work environment.

Embodying company values creates an atmosphere of like-mindedness at work—everyone is on the same page. People feel involved. People feel connected. People feel engaged. Communicate the culture and values to every employee from the beginning, and continue to emphasize it periodically: in meetings, presentations, and employee activities.

Recognize Employee Performance
Reward your employees for outstanding performance. Not only does this motivate them to continue to thrive, but it also encourages other employees to excel in their performance. A simple “thank you,” a standing ovation, or a gift of some sort, are all great ways to recognize your employees.

Create Incentive Programs for Employees
Engage employees by creating incentive programs that reward employees for their loyalty and commitment to the company. Incentive programs can also include perks that employees receive just from being a part of the company. A great example is adopting a prepaid card program. Prepaid card programs are growing in popularity and there are many ways to you can implement them in your company:

– Referral Programs: reward employees with a monetary value on their cards for referring customers to the company
– Points Cards: Allow employees to accumulate points when they use the card to make purchases at certain stores
– Gifts and Rewards: Deposit a monetary value on employees’ cards for holiday gifts or performance rewards

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