How employee engagement affects the bottom line

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By: Wise Marketer Staff |

Posted on January 6, 2009

With businesses increasingly looking for ways to increase sales and profits, engaged employees have become a critical component in high customer engagement levels, according to a new white paper published by feedback management solutions firm Allegiance.

The paper, entitled 'The Spillover Effect', reports that one out of every ten customers (10%) has been affected negatively by disengaged employees. Written by Allegiance loyalty and engagement consultant, Dr. Gary Rhoads, the paper explores the ways in which employee engagement can impact the whole business in monetary terms, and suggests ways in which this often-missed opportunity can be exploited for a competitive advantage.

Rhoads found that emotionally engaged employees believe they are doing something valuable for their company, and that their efforts are likely to make a difference. The positive feelings that employees have about their jobs and employers also influence the level of service they offer to customers. These positive experiences "spill over" to customers, who are then more likely to become advocates for the company's products and services.

"In our research, we have found that increasing employee engagement had a direct effect on customer engagement, which leads to increased sales and profits," said Rhoads. "Companies are missing a significant opportunity by not focusing on employees as a way of increasing customer loyalty and engagement."

The paper identifies several "job enhancers" which, when combined with the absence of stressful barriers, are effective in nurturing employees who are likely to be emotionally engaged. The most important job enhancers, Rhoads believes, include:

  • Having a positive impact on the lives of customers and team members;
  • Having opportunities for learning important new skills;
  • Having the ability to offer suggestions;
  • Completing whole jobs from start to finish;
  • Receiving feedback about the results of efforts;
  • Feeling free to perform the work the way they believe is best.

The paper concludes that engaged employees contribute positively to the bottom line because, as their engagement is reflected in elevated customer service levels, they help to nurture more loyal customers. According to Adam Edmunds, CEO for Allegiance, "We know that highly engaged customers tend to buy more products, refer other potential customers to a company, stay longer and give more feedback. This in turn gives companies an opportunity to address customer problems and concerns - sometimes in advance - and to preserve any potentially lost sales."

The full white paper has been made available for free download via Allegiance's web site - click here (free registration required).

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