Brands that emphasize employee experience (EX) and customer experience (CX) achieve business growth nearly 2x faster
If you take care of your employees, they’ll take care of your customers, and everything else will fall in place.
That was one CEO’s wisdom for a VC-backed tech startup where I worked ages ago. Her advice always seemed sound, it stuck with me, and all these years later there’s research to suggest she was right.
A study, commissioned by Salesforce and conducted by the custom content arm at Forbes, found “revenue growth is linked” to employee experience (EX). Further, the growth as a result of EX is linked “regardless” of the emphasis the company placed on customer experience (CX).
The real kicker? Companies that prioritize both EX and CX, see revenue growth of 1.8x higher than those that do not.
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Comparing ratings and reviews against growth rates
The study – The Experience Equation: How Happy Employees and Customers Accelerate Growth – drew its conclusions from a combination of data analysis and survey research.
Forbes examined customer and employee ratings from the American Customer Satisfaction Index and Glassdoor for 263 companies. Next, they compared these ratings to see who had the highest growth – as measured by a three-year compound annual growth rate (CAGR).
Finally, a survey probed the views business leaders have as to the effects of EX and CX on growth. Forbes polled 300 “senior executives” working for U.S. businesses with at least $20 million in annual revenue. More than three-quarters (78%) of respondents were C-suite executives.
Sales and Marketing Leaders Agree
The survey data supports the correlation found in the data analysis – that employee experience leads to faster revenue growth. Overall, 70% of respondents agreed that improving the employee experience naturally improves the customer experience. In turn this fuels growth.
To be clear, it wasn’t just the HR and operations people saying as much. The study suggests this viewpoint was even higher among sales and marketing types. A full “89% of executives at revenue-growth leaders agree that better EX leads directly to better CX,” according to the findings.“The fastest way to get customers to love your brand is to get employees to love their jobs,' says @Tiffani_Bova of @SalesforceClick To Tweet
EX + CX is greater than EX or CX
If business leaders know this to be true, then they should be pulling out all the obstacles to drive experience across the organization. It’s here that the survey identified a dichotomy of views.
When the study isolated answers from leaders coming from employee-oriented functions, 43% “say employees are resisting cultural change.” On the other hand, if you ask executives that come at things from the customer side, 41% “say the main problem is a lack of shared senior management vision.”
In other words, the whole is greater than the sum of its parts. The report makes three suggestions to remedy the opposing views:
- “Align your company with strong leadership and vision”
- “Align operations and IT strategy to focus on CX”; and
- “Incentivize cross-functional teams to enhance both CX and EX.”
One way to incentivize cross-functional teams is through “shared metrics.” The report suggests [customer] churn rates, recency of purchase, and breadth of product adoption as examples.
If I added a metric for consideration, it would be employee turnover. Other studies show the cost of replacing an employee ranges between 1.5-3x the cost of the salary for that position. In addition, it takes at least three months for the new person to get up to speed – and you never truly capture the institutional knowledge that walked out the door.
Besides, keeping your employees happy is the key to keeping them – and that’s the path to CX and growth as the Salesforce report says. Tiffani Bova of Salesforce sums it up nicely in the report when she says, “The fastest way to get customers to love your brand is to get employees to love their jobs.”
That sounds a lot like what my former CEO used to say.
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Image credits: Photo by Husna Miskandar on Unsplash and the respective report.