Management for the masses: Job satisfaction and customer service

Indiana University Kelley School of Business  8.31.10If your profits depend on customer satisfaction, you know how important each employee’s interactions with customers can be.  Every time you take an order, deliver an item, or respond to a complaint, your company’s reputation is on the line.  So what can you do to ensure your employees delight your customers?

The answer lies in the “service profit chain model.”  Basically, it goes like this:  when employees are satisfied with their managers and jobs, they are better representatives of your organization.  They’re also more loyal to you.  Their actions prompt your customers to rate your services as valuable.  When customers think you add value, they come back.  And that improves your profitability.

Studies confirm two main reasons for this relationship.  First, when employees are satisfied with their jobs, they are more likely in a good mood at work.  So it is easier for them be friendly and helpful.  Second, satisfied employees are less likely to quit their jobs.  Your workforce is more experienced and knowledgeable, serving your customers better.

Wegmans Food Markets has taken this to heart.  Their motto: “Employees first, customers second.”  This east coast grocery chain, with about 33,000 employees, goes out of its way to ensure their workers feel welcomed and valued.  The result?  Their industry’s highest marks for customer loyalty, coupled with lowest levels of employee turnover.

So how do you build employee satisfaction?  We’ll talk more about each of these components in upcoming columns, but here’s a master list:

  1. Treat employees fairly.  Organizations that support the well-being of their workers enjoy higher levels of loyalty in return.
  2. Make sure employees know the whole organization and their role in it.  This helps workers identify with the organization.  It is hard to feel part of a company you don’t fully understand.
  3. Involve employees in decision making.  Even if you can’t act on all employee suggestions, asking for and listening to them is an important first step.

Employees are your front line for customer service.  The happier they are, the better they treat customers…and the more loyal your customers are to you.

Reference: W. C. Tsai & Y. M. Huang. Mechanisms linking employee affective delivery and customer behavioral intentions.  Journal of Applied Psychology, 87, 1001-1008.

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