Customer Retention

How Poor Employee Engagement Creates Disengaged Customers

Measuring customer satisfaction? Good start, but don't forget to think about how employee engagement impacts customer engagement.



Trusted Experience Management Partners

Engaged Employees Create Engaged Customers

It’s one of our mottoes. As we’ve written before, our research shows that engagement among employees is contagious—it quickly spreads to customers. Highly engaged employees foster more loyal, enthusiastic customers who are more willing to give referrals, go out of their way to do business with you, and increase spending. However, the flip side of this foundational equation is also true. Disengaged employees create disengaged customers. In this post we’ll focus on the negative impacts disengaged employees can have on your workforce and customer base.

First, let’s look at the current employee engagement landscape. Disengagement is definitely increasing. Worker loyalty is down--84% of employees plan to look for a new position in 2011 (up 60% from last year!). Just 27% of today’s employees are actively engaged. Our own research and others’ studies show that the number of Actively Disengaged Employees—those that are actively working against the growth and success of your business—is on the rise.

Now, let’s explore how disengaged employees create disengaged customers.

1. Disengaged employees' negative emotions rub off on the customer.

Disengaged employees disengage customers by appearing uncaring and apathetic. That matters because, as behavioral psychologists tell us, 70% of purchasing decisions are emotionally-based. No matter what an executive decrees or an advertisement states about “Customer Care,” it is your customer-facing employees who ultimately create the emotional connection. If a customer detects negative emotions from an employee, s/he is far less likely to feel positive during the transaction. And far less likely to return for another disenchanting encounter.

2. Disengaged employees don’t solve customers’ problems.

Another way that disengaged employees create disengaged customers is that they fail to solve customers’ problems satisfactorily. Indeed, poor problem handling is endemic for disengaged employees. Because they don’t really care about the job they’re doing, disengaged employees are dismissive at best and downright rude at worst when responding to customer problems. Our Most Engaged Customers Study found that 31% of customers who faced problems and received poor problem handling were engaged, compared with a 48% engagement rate among customers who had a problem and experienced good problem handling.

3. Disengaged employees don’t go “above and beyond.”

Disengaged employees are the opposite of your Brand Ambassadors. Brand Ambassadors feel that their work connects with a greater purpose, their work means something and because of this they go above and beyond to delight customers. Disengaged employees lack this connection. Their apathy creates Actively Disengaged and On-the-Fence (read: quick to leave) customers. When an employee fails to go above and beyond, we’ve found that customers are three times more likely to be Actively Disengaged, and two times more likely to be On-the-Fence.

4. Disengaged employees create customers who spread negative word-of-mouth.

To the customer, front-line employees are the face of the brand. When the front-line employee is disengaged, rude, and uncaring, customers are more likely to spread negative word-of-mouth about the company. Think about the last time you got atrocious service from a nasty employee. You probably told at least a few friends, making sure to include the name of the company.

5. Disengaged employees sap your company of customer referrals.

Customer referrals are valuable to any organization. We’ve found that customers who come to your company through referrals are more engaged and more forgiving of service failures. In order to earn those personal recommendations of your brand, you must create exceptional service experiences, something disengaged employees do not do. Remember, 16% of customers who get average service will recommend you, while 84% of customers who experience great service will recommend you. Disengaged employees ensure that a customer will rarely find you remarkable and certainly not recommendable.

Given how clearly disengaged employees hurt a company’s performance, what should leadership do to combat disengagement? Well, a strong customer engagement strategy begins with a strong employee engagement strategy. Start by listening to your employees with a Voice of the Employee solution and find out what their unique motivators are. Take employee engagement seriously and prepare to act on what you learn. Demonstrate that you care about your employees and you have taken the first step toward teaching your employees how to demonstrate care to your customers.

Chat with one of our experts and get smart about your customer experience.

Topics: Employee Experience, Customer Experience

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