Can Employee Feedback Improve Customer Satisfaction? Yes!

We all want to satisfied customers, right? And we all want motivated employees too. But who would have thought that a simple solution could improve your odds at achieving both? Beth Benjamin, that’s who. And what she discovered about how employee feedback can influence customer satisfaction is something every manager can use to improve their business.

Beth Benjamin, currently a senior director of Medallia, has more than 20 years of experience conducting research, teaching and writing in the field of organizational science. Not long ago, she put those skills to use to conduct a study that yielded very intriguing results…

Listen To Your Employees, Not Just Your Customers

“Many companies love customer feedback,” Beth Benjamin writes in a recent piece for the Harvard Business Review. ”But only a handful have devoted as much energy to employee feedback systems.”

Compounding the problem is this: companies rarely connect the two systems. They rarely put into place a structure that integrates and leverages both customer and employee feedback.

This is a real missed opportunity. Because, as Benjamin goes on to explain, “connecting them can create powerful feedback loops that engage employees and help companies adapt to fast-changing customer expectations.”

Benjamin’s words are backed up by a recent study that she conducted with colleagues at the Medallia Institute. Seeking further insight into this issue, they surveyed 1,000 “frontline employees” who worked at large companies in five different sectors (automotive, financial services, retail, telecomm, and hospitality).

Here were a few of their key findings:

• 43% of frontline employees said they had suggestions that could reduce company costs.
• Yet 33% of frontline employees said they were surveyed only once a year (or less)
• Even worse: over 50% said their employers weren’t asking the right questions.

Meanwhile, at most companies, customers are constantly asked to provide feedback.

So…how can we bridge this discrepancy? And what is the potential value of doing so?

Hulu (and the Quest for Authentic Customer Relationships)

Throughout her piece, Benjamin cites a relatively small change that was made at Hulu (the streaming video service), which made a major impact on the business.

What Hulu did was create and link an employee feedback system to its customer feedback system. The reason for this was to identify interactions where customers and employees had different perceptions of the same experience. The linked system consisted of two short surveys that were sent out after an interaction; one going to customers, the other to employees.

Here’s what happened next:

• Hulu’s customer retention increased
• The company gained better insight into their customers
• Managers were able to use the information they obtained to coach employees and better evaluate whether they had the right tools and resources.
• Hulu was able to identify employees with innovative ideas and leadership potential.

By implementing these two linked systems, Hulu created a powerful feedback loop that enabled them to better respond to customer expectations and improve employee engagement.

The latter of which is actually a bigger problem than most people realize…

The Sad State of Employee Engagement

According to the most recent employee engagement survey from Gallup, only 32% of U.S. worked were considered engaged in their jobs. To put that in reverse: A significant majority of U.S. employees are not engaged with their work.

Why are so many employees disengaged? One of the reasons is lack of feedback!

This is particularly true of millennial employees. According to a recent PwC report, Millennials at Work: Reshaping the Workplace, 72% of survey respondents under age 30 said they would like feedback on a daily or weekly basis.

So…why does feedback work?

“Appreciation is the Foundation for Motivation”

That quote comes from a Globoforce survey that was commissioned to provide ”insights that can be used to craft strategies that will unify and engage your workforce and culture.”

When it comes to employee feedback, here’s what Globoforce found:

• 82% of employees said being recognized actually motivated them in their jobs.
• 78% of workers said they would work harder if their efforts were better recognized and appreciated.

Pretty compelling. Which leads us back to Beth Benjamin.

What Benjamin found was that well-designed feedback loops empower employees and helps companies become more responsive. Ultimately, she believes, this creates a competitive advantage. Two, really.

“In a world where big data algorithms and technology increasingly dictate the customer experience,” she explains, “linked feedback systems give companies at least two great advantages. The connections help senior managers get a more complete picture of customer-employee interactions… And, asking employees for their input, not through a pro forma annual survey but as part of the company’s routine operations, sends a signal that employees have useful insights and that they are valued.”

Questions? Comments?