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Customer Strategist Orkun Oguz:
The Key to Successful Customer Relationships Is Effective Employee Engagement

June 2, 2010

Customer Strategist Orkun Oguz:
The Key to Successful Customer Relationships Is Effective Employee Engagement

Products don't generate revenues. Customers do. But in order to satisfy customers and build the types of trusting relationships that will help companies maximize their revenue potential, organizations must first have properly motivated and engaged employees.
Employee engagement involves the steps that companies take to capture the hearts and minds of their employees, and motivate them to give their best effort to customers.

You can't become a customer-centric organization until you've become employee centric. Your company is only as strong and effective as your customer-facing staff. There will always be critical moments for your customers that no CRM suite or marketing script can address. Only an engaged, caring, customer-facing staff can handle these types of instances properly.

A highly-engaged employee typically feels more connected to the business and its performance. In fact, according to a study by Hewitt Associates, the level of employee engagement at companies that have achieved compound annual profit growth of at least 10 percent for a five-year period is more than 20 percent higher than at single-digit growth companies.

In addition to connecting customers with the right employees who are incented to fulfill their needs, companies realize other meaningful business benefits from having engaged workers. Employee turnover will be reduced, particularly in high-churn areas such as contact centers. HR costs will drop as companies have to devote less time and capital to recruiting new employees. That will also lead to lower training costs as companies retain longer-tenured, knowledgeable workers.

Nevertheless, the HR-related cost savings that stem from these actions pale in comparison to the impact that a highly engaged employee will have on cross-sell/upsell rates and other favorable business outcomes that result from happy, satisfied customers.

Employees are not equal

Just as companies need to treat different customers differently, they also must treat different employees differently. Not just in terms of compensation, but also how each employee responds uniquely to different styles of communication. They also have different needs and motivations; they each bring a different value proposition to the organization. Because of their unique qualities and capabilities, individual employees also require different types of training, acknowledgment, project assignments, and career progression paths. Some employees have a strong aptitude for assuaging customers who are upset. Other workers are adept at seizing opportunities for upselling customers at just the right time.

Decision-makers also need to recognize that there are roles within the organization where an employee's impact is considerably greater than their rank or pay grade. For instance, contact center agents don't rank among the highest-paid employees in most companies, yet their impact on the organization's business outcomes with customers is substantial. Such groups should be identified and handled with special care.

While business leaders can't necessarily pay contact center agents more, they can segment employees based on their skills or value to the organization and provide them with different types of incentives. These can include flex hours for working mothers or tuition support for workers attending night school. Incentives can also be tailored to meet an employee's particular motivation. For instance, some employees value public recognition of their efforts by senior executives in town hall-type meetings.

Another effective technique for motivating and engaging employees is by placing them through a variety of rotational job assignments. This will give high-potential employees a chance to learn more about different parts of the organization while strengthening their skills, as well as the company's bench strength.

There are also techniques that can be applied to help motivate and incent employees based on compensation levers. For example, companies can create special teams of contact center agents who are particularly adept at retaining high-risk customers. Agents who work in such groups can be compensated differently, including performance-based pay or bonuses that are tied to customer satisfaction and churn rates.

Applying the Golden Rule

When decision-makers take steps to motivate and incent their top-performing employees, they should be sure not to overlook their "B" team players whose contributions to the company are also critical. The best way to do this is by setting transparent performance and rewards criteria for all employees, including the availability of training programs and the requirements for reaching different pay levels. The criteria itself can be based on an employee's performance grades and their direct and indirect influence on customer satisfaction scores.

Highly engaged and motivated employees are more likely to go above and beyond the call of duty for your company's customers. Ultimately, that will lead to happier, more satisfied customers whose loyalty will be reflected in their business value to your company.

About the Author: Orkun Oguz is a managing partner at Peppers & Rogers Group.

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