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Happy employees lead to happy customers

A study in the US labour market shows a strong connection between customer and employee satisfaction.

The findings may help Kiwi businesses improve their financial performance and become better employers.

Job recruitment site, Glassdoor, recently released its research on 293 companies across 13 industries spanning 11 years. It examined the link between employee satisfaction based on Glassdoor’s employee-satisfaction ratings and customer satisfaction using the American Customer Satisfaction Index. Overall, a 1-star improvement in Glassdoor’s employee-satisfaction rating (on a scale from 1 to 5) predicts a 1.3-point higher customer satisfaction score (ranking from 0 to 100) - a statistically significant effect. The effect is more than twice as large in industries where employees have regular in-person contact with customers such as retail, restaurants, tourism, financial services, and healthcare.

Across all industries, customer-facing roles are crucial in a company’s ability to deliver great customer experiences. Sales and customer service employees are positively linked to customer satisfaction even in industries where there is an overall weak direct connection between employees and customers.

Customer satisfaction also has a positive impact on the company’s financial performance. Accordingly to Glassdoor, past research indicated that higher customer satisfaction scores were linked to higher company valuations. One estimate indicated that each 1-star improvement in Glassdoor employee-satisfaction rating resulted in 7.8-18.9 percent higher stock market valuations through the channel of improved customer satisfaction.

The research suggests that employers who invest in their employee satisfaction and workplace culture also benefit more than just talent attraction and retention. New Zealand employers can take notes: Employers who have happy employees are more likely to have happy customers and achieve higher market value for their businesses.

Glassdoor website (external link)

Happy employees, satisfied customers: The link between Glassdoor reviews & customer satisfaction - Full research from Glassdoor (external link)