More satisfied customers? It starts with employee satisfaction.

Studies have shown that employee satisfaction plays an important role in the effectiveness of organisations. It has been known for some time that satisfied employees can also ensure more satisfied customers. Why does higher employee satisfaction also lead to higher customer satisfaction? And can this connection be quantified?

Known phenomenon

Research carried out by Hoseong and Beomjoon (2012) shows that more employee satisfaction leads to increased customer satisfaction. For example, Guzman, Rodriquez and Manautou (2004) also came to the same conclusion in their study of a restaurant chain. These are just two examples of studies that explain this link but there are many other studies that have also shown this link. So it is not a new fact that satisfied employees are necessary for customer satisfaction.

Logical explanations

According to the studies there are number of explanations for this relationship. The most important statement is that employees who are in contact with clients can develop awareness of customer needs and wishes. In addition, satisfied employees, employees who have the means to understand and serve customers optimally.  And not insignificant, satisfied employees have relatively much energy and drive to provide good service. Also, satisfied employees have sufficient "emotional abilities" to deliver empathy, respect and focus.

In addition, satisfaction among employees also ensures less absenteeism. Also, satisfied employees have better work morals than dissatisfied employees, this ensures increased productivity.

Chicken or egg?

Does customer satisfaction in turn lead to employee satisfaction? No, say Hoseong and Beomjoon (2012). And they are not the only ones to have demonstrated this. Chi and Gursoy (2009) also showed that employee satisfaction comes first and not customer satisfaction. This would imply that customer satisfaction is dependent on employee satisfaction.

How many employees satisfaction is enough?

Despite the strong correlations between them, we cannot specifically identify a minimum amount of employee satisfaction commit. For example, it is clear that a large proportion of the most successful companies are also among the most attractive organisations to work for. But for the tipping point between satisfied and dissatisfied customers, there is too little scientific data to explain this reliably.

Impact of employee satisfaction

Research by Gallup, for example, among a large number of organisations has shown that employee satisfaction not only leads to less staff turnover. In the selected group of organisations with above-average employees, a number of other metrics were tested. Below is an indication of the impact of above-average employee satisfaction:

    • Customer loyalty (+ 56 percent)

    • Productivity (+ 50 percent)

    • Profitability (+ 33 percent)

  • Staff turnover (-50 percent)

Conclusion

Satisfied employees make for satisfied customers, but this is not true the other way around. In any case, these results show that employee satisfaction is an important component for the success of organisations and that this is an important issue for every organisation. In any case, it seems that customer satisfaction, and thus organisational success, depends to a large and significant extent on the degree of employee satisfaction.

10th March 2015

"Creating A highly engaged and Productive Workplace Culture," The Gallup Organization.

Baxter W. Graham, "The Business Argument for Flexibility," HRMagazine (May 1996).

Peter Lucas, "Collaboration on Deadline," Knowledge Management (May 2001).

"Business Must Adopt Family-friendly Ethos," Irish Times (2 March 2001).

Ruth Davidhizar and Ruth Shearer, "Rewards with Dignity," Hospital Materiel Management Quarterly (November 1998).

Dory Devlin, "'s a Sure Bet in a changing Workplace," The Star-Ledger (12 July 1999).

3 Comments about "More satisfied customers? It starts with employee satisfaction."

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