SalesForceXP: July/Augiust 2007 Incentives&Recognition: Satisfied Employees Boost the Bottom Line

INCENTIVESRECOGNITION

Incentives and Recognition Satisfied Employees Boost the Bottom Line

Research by HR consultants consistently shows that employees rank salary below having a job that’s challenging and one that offers advancement opportunities in terms of importance. Money, it seems, can’t buy workers’ loyalty.

Now there is evidence that engaged employees are better for a business’ bottomline as well. Customers spend more when they feel that employees are trying to satisfy them. What’s more, there is a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance, according to studies by The Forum for People Performance Management and Measurement, a research center located at Northwestern University in Chicago.

One of the Forum studies measured customer satisfaction and its effect on how much a customer spent at six different locations of a major hotel chain. A 10 percent increase in a customer’s score on “Tries to Satisfy Customers” yielded a 22.7 percent higher level of spending during the period studied.

The Forum concluded that companies with engaged employees have customers who use their products more, and increased customer usage leads to higher levels of customer satisfaction.

“Whether called internal marketing, employee engagement or internal communication, the concept is the same: to align, motivate and empower employees – at all functions and levels – to consistently deliver a positive customer experience that helps to achieve business objectives,” said Frank Mulhern, Professor of Integrated Marketing Communications at Medill School, Northwestern University.

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Full copies of Forum studies and other white papers are available at www.performanceforum.org.