Employee Engagement Drives Customer Advocacy And Business Value

themaria
Maria Ogneva Head of Community, Sidecar

Posted on May 27th 2012

Employee Engagement Drives Customer Advocacy And Business Value

These days, a brand voice is a composite of how customers, employees and the rest of the ecosystem feel about the brand. Social media has given a voice to many employees, and these empowered employees now want something bigger than being a proverbial cog in a wheel. These empowered employees, driven by purpose and passion, can be true brand advocates and radically improve both: the top and bottom line. To do so, these employees have to be committed to the organization and its goals. This commitment is also known as engagement and is a source of enduring competitive advantage. Here are just a few reasons why engaged employees are simply good for business.

Engaged employees turn customers into engaged advocates. Because employees are closest to your customers, you can improve customer experience directly through your employees. Gallup research has shown that engaged employees drive customer engagement, and Constellation Research Group has also agreed that engaged customers are three times more likely to recommend or advocate a product or service to a friend. According to the Edelman trust barometer, the employee is the new influencer, and employers need to treat them accordingly.

 

Engaged and informed employees are a source of knowledge. “People establish significant, visible expertise through their employment,” says Brian Kotlyar of Dachis Group. Your employees know what they are doing; surfacing this information helps educate the market and establish thought leadership. Buyers aren’t content with buying simple widgets anymore; they are looking for an expert partner. To fully maximize the exposure of your employees’ expertise to the rest of the world, give them the tools to keep up to date and hone their skills, and empower them to offer these resources to those in need.

Engaged employees produce. Every CEO has a vision; the challenge is to enable and inspire employees to carry out this vision. This task is made more difficult by employees’ reduced dependence on company resources to develop their careers. If you engage your employees and help them feel that they can contribute the company’s goals, they will be more likely to be loyal to you and use discretionary effort vs. just scraping by and watching the clock.

Engaged employees save money. Turnover is expensive, as is low productivity. Deloitte Australia has linked higher engagement (evidence of which is engagement on Yammer) to lower turnover:  2% turnover rate amongst frequent Yammer posters, compared to a firm-wide average of 15-20%. Similarly, Constellation Research found that engaged workers are 37% more likely to stay with their employers.

Engagement leads to higher stock price. We already established that employee engagement drives customer advocacy and engagement, as well as cuts costs. It shouldn’t come as a surprise that all of this ultimately drives higher revenues, profits and thus stock market performance. A recent study by Kenexa found that the most engaged companies have 5 times higher total shareholder return over 5 years than the least engaged companies. A study by Towers Perrin similarly linked employee engagement to a 6% higher net-profit margins, and a Aon Hewitt tied high levels of engagement (65% or greater) to outperforming the total stock market index and posting total shareholder returns 22% higher than average in 2010.

It’s clear at this point that engaged employees not only advocate for the brand and turn customers into advocates, but also deliver hard financial metrics. Jack Welch, the CEO of General Electric, summed it up nicely:

“Any company trying to compete … must figure out a way to engage the mind of every employee.”

Since engagement has such measurable positive effects, one would think that all companies have learned to harness it and appreciate it, right? Wrong! Here’s a snapshot of where we currently are with engagement:

Given how important employee engagement is to meeting business objectives, yet how disengaged employees feel, there seems to be a major disconnect. In the next post, we’ll address some of the steps you can take to ensure that your employees feel engaged and have the tools they need to advocate on your behalf.

Photo source: id-iom

themaria

Maria Ogneva

Head of Community, Sidecar

Nice to meet you! I'm a community management practitioner and strategist, and I believe in the power of movements that can spring up at the intersection of passion, behavior and technology. Currently I work as Head of Community at Sidecar, a community marketplace for people to give and get rides from their mobile phone. My job is to help create the conditions where our drivers and riders benefit from working together and with us as a company. Before Sidecar, I built the Yammer global online community from the ground up, and worked at Salesforce as "Adoption Czar" helping companies evolve their own community best practices. You can follow me on Twitter at @themaria or on my blog socialsilk.com.

See Full Profile >