Happier Employees = Higher Customer Satisfaction and Sales

As companies strive to put customers first, latest research published on Harvard Business Review offers new insights into how that could be achieved: through happy employees.

Happy Employees = Happy Customers

Researchers studied data from 293 large employers in 13 different industries, including their average overall Glassdoor rating (given by their employees on a scale of one to five) and ACSI score (that measures customer satisfaction on a scale of zero to 100) annually from 2008 to 2018. They found a strong statistical link between the slightest increase in employee well-being reported on Glassdoor and a significant rise in customer satisfaction; precisely each one-star improvement in Glassdoor company rating resulted in up to 3.2-point increase in customer satisfaction.

To verify this is not a coincidence, researchers studied timelines closely and found that in most cases, employee satisfaction rises or falls first, followed by changes in customer satisfaction later.

The Financial Impact

According to a published study in the Journal of Marketing Research, an organization’s ACSI score has a direct effect on consumer spending and sales, and can predict how well the firm will perform in terms of corporate revenue and earnings growth.

Moreover, a study published in the Journal of Marketing found that each 1% improvement in ACSI customer satisfaction scores for an employer was associated with a 4.6% boost in its overall stock market value. Applying this to the findings above, the possible impact of a one-star improvement in Glassdoor employer ratings means an increase of 7.8% to 18.9% in long-term market valuation.

Employees Come First

The takeaway? It pays off to be customer-centric, but when employee morale is your business’s last concern, the results you’re after might never happen. If the business invests in rewarding employees and prioritizing employee recognition and happiness, it’ll be the first to reap the gains.

Sources:

Harvard Business Review

The Journal of Marketing

The Journal of Marketing Research

American Customer Satisfaction Index