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The ForeSee blog for CX professionals and the Voice of Customer community.

Retail’s Future: Where Customer Experience and Employee Engagement Converge

The evolution of customer and employee expectations is impacting business results for all retailers in a big way. In my BIG !deas sessions at the National Retail Federation’s (NRF) Big Show, I discussed how employee engagement influences the customer experience and how that experience drives business results.

My presentation focused on new research that pairs the results of the retail chain store portion of the ForeSee Experience Index (FXI): 2014 U.S. Retail Edition with employee engagement data from those same stores (collected as part of our research for The Answers™ American Employee Study) and quantitatively validates the causal relationship between retail store employee engagement and customer satisfaction.

The positive slope in the figure below illustrates that employee engagement has a direct, positive effect on customer satisfaction for two dozen of the top global retail brands:

The Relationship Between Employee Engagement and Customer Experience

Click to enlarge

 

Satisfaction is scored on a 100-point scale; 80 is generally considered the threshold for excellence at which an organization meets and exceeds employee or customer expectations. The top-performing retailers–Advance Auto Parts, Ann Taylor, Apple, Barnes & Noble, Costco, OfficeMax and Victoria’s Secret–are poised to reap the greatest benefits for high marks in both areas.

Employee Engagement: The Critical Link

In The Answers™ American Employee Study, the main factors impacting retail employee engagement are:

  • Supervisor: employees who feel they receive praise and recognition from their supervisor are much more satisfied and engaged than those whose supervisors do not provide this sort of mentorship
  • Leadership: Employees want to be informed and expect company leaders to effectively and frequently communicate company information and updates

Since employee engagement has a direct, positive effect on customer satisfaction, employers who take initiatives to increase the engagement of their client-facing workers are simultaneously taking steps to increase customer satisfaction.

In the ForeSee Experience Index (FXI): 2014 U.S. Retail Edition, the main elements that impact in-store customer satisfaction are:

  • Merchandise: the appeal, variety and availability of products in stores
  • Service: whether store employees are friendly and whether the services provided by employees are consistently performed
  • Store Environment: the layout of the store, how well the products are organized and how appealing the store environment is

If your store employees are satisfied and engaged, they are more likely to move the needle on these factors, thus increasing shopper satisfaction and shopper likelihood to engage in desired future behaviors such as returning to your stores, purchasing from you in another channel and recommending your brand.

Satisfied, engaged employees lead to satisfied customers.

For example, a mid-sized specialty retailer with 300 stores, a $30 average order value and about one million transactions per month can generate an annual revenue increase of three percent by prioritizing improvements to store employee engagement.

Institutions have surveyed employee engagement and customer satisfaction separately for years, but our research proves the relationship between employee engagement and customer satisfaction exists, is positive and is significant.

About the Analysis

In Fall 2014, we fielded two studies, one focusing on employees and the other on consumers. The first, Answers™American Employee Study, offered a comprehensive examination of the employment experience of thousands of American workers across roles, ranks and industries. A subset of the study focused on the workplace engagement of 500 retail store employees. The second study, ForeSee Experience Index (FXI): 2014 U.S. Retail Edition, reviewed the experiences of 40,000 retail customers across multiple touch points, including brick-and-mortar stores. Both studies utilize ForeSee’s technology-driven experience analytics and proven experience measurement metholodogy. Learn more about how we can help you improve the retail employee experience and the retail customer experience.



About the Author

Eric drives ForeSee’s marketing strategy, working closely with the company’s product, client service, and sales teams to infuse innovation and operational excellence into its offerings. Since joining ForeSee in 2004, he has contributed to the organization’s strategic growth, particularly providing leadership around mobile solutions. He is the author of several of the company’s thought leadership studies, including the 11th annual ForeSee Experience Index (FXI) and the American Employee Study. Eric is a frequent speaker on customer experience analytics, and marketing best practices. He is a board member of the Digital Analytics Association (DAA) and an adjunct professor of mobile marketing at the University of California, Irvine Extension. Previously, he worked as a web analyst, multichannel strategy consultant, usability specialist and focus group moderator. Eric is a graduate of the University of Michigan.

Read more posts by Eric Feinberg

Comments

  1. Employee Engagement and Customer Experience | The Customer Experience Officer

    […] Foresee, a Customer Experience analytics firm, examined the results of two studies that used their analytics technology last fall. The first was looking at the employee experience for American workers at all levels of employment. The second examined the retail experience of 40,000 Customers. What they discovered was Customer Satisfaction was highest in retailers with high employee engagement. Furthermore, this translated into increased revenues for those stores by referrals; return visits and purchases from other channels. To see the full article, click here. […]

    Reply
  2. Mistakes Organizations Make with Employee Engagement

    […] Foresee, a Customer Experience analytics firm, examined the results of two studies that used their analytics technology last fall. The first was looking at the employee experience for American workers at all levels of employment. The second examined the retail experience of 40,000 Customers. What they discovered was Customer Satisfaction was highest in retailers with high employee engagement. Furthermore, this translated into increased revenues for those stores by referrals; return visits and purchases from other channels. To see the full article, click here. […]

    Reply
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