Category All, Best Practices Employee Recognition: The Key to Customer Satisfaction Employee recognition is crucial to companies’ business success. Learn in what specific ways it improves customer satisfaction. January 29, 2021 By Sara Ana Cemazar Improving customer satisfaction is frequently one of the main goals of customer-facing businesses. However, this task is not easy since customer satisfaction depends on several factors. Moreover, there are no quick fixes to this issue. Business owners must understand that improving customer satisfaction is a multifaceted matter, and that it requires long-term commitment and continuous attention. However, one thing is certain: employee recognition improves customer satisfaction. 35% of companies that have recognition programs noticed an increase in customer satisfaction. In this article, you will find out how to influence customer satisfaction by recognizing your employees, and what are the specific causal links between treatment of your employees and customer satisfaction. 👉 One of the industries often burdened by low customer trust is Financial Services. Get our eBook to find out how employee recognition helps companies in this industry tackle their biggest challenges. Customer Satisfaction Influences There are several aspects that influence your customer satisfaction, and the importance of each factor is different for different products and their types. For example, customer satisfaction for a beauty product will mostly be influenced by its quality, while customers of an electric provider will mostly focus on its price. However, customer satisfaction influences can be grouped into three main categories. Customer service Customers are looking for high-quality customer service that will help them resolve their issues. One of the most common complaints regarding customer service is its slowness to respond and its inability to resolve the issue at hand. Therefore, customer service should be timely and efficient. This also means that employees in customer service department should be productive and well trained. Quality Obviously, one of the main factors influencing customer satisfaction is the quality of the product. There are also different aspects of quality that customers will focus on depending on the product at hand. For example, if the product at hand is a software, it will have to be accessible, easy to use, fast and more. On the other hand, some products’ quality is more one-dimensional, for example in case of consumer goods like clothing, food or jewelry. Customer perception An often-neglected category of customer satisfaction is customer perception. This includes customers’ perception of the product’s brand and their perception of value for money. In other words, this category of customer satisfaction is the hardest to influence and measure, since perception is formed according to variety of factors. Improving Customer Satisfaction So, knowing what main areas of customer satisfaction are and how it is formed, the question remains: how can customer satisfaction be improved? Of course, there is plenty of answers online. Here are some of the suggestions by Callminer: Treating customers like you would want to be treated Providing multichannel support Shortening waiting times Demonstrating product knowledge Offering proactive customer service Studying complaints and compliments Asking for more feedback Turning customer data into action. The interesting thing is – all the methods for improving customer satisfaction have a single starting point: employees. You need motivated employees that will productively resolve customer complaints. You need proactive employees that will be able to predict possible concerns to be raised by customers. You need innovative employees that will create a high-quality product which customers will love. Since employees are the ones creating the product, raising brand awareness of it and handling customer complaints and compliments – they are at the very core of your customer satisfaction. So, the question remains: does taking care of your employees translate into improved customer satisfaction? Recognition Impact on Employees Long story short – happy employees equal happy customers. If you want a better product and better customer service, you need to engage your employees. Highly engaged teams show 21% greater profitability. Moreover, the road to high employee engagement starts with employee appreciation. Learn in what specific ways employee recognition affects customer satisfaction. Employee recognition increases employee engagement According to Gallup, employee disengagement costs US businesses $500 billion per year in lost productivity. This speaks volumes about the importance of employee engagement. It is the most popular HR metric, and this is no surprise since it has an immense impact on workplaces and in the end, business results. So where is the direct link between employee engagement and customer satisfaction? Well, engaged employees are just that: more engaged in their work. Your customer service representatives will be more likely to resolve your customers’ issues, and your product team will deliver more innovative solutions. As research shows, 59% of engaged employees say that their job brings out their most creative ideas compared to only 3% of disengaged employees. So, where does employee recognition fit in? Well, it is essential for employee engagement. Namely, 58% of employees say that their leaders could engage them better by recognizing them. The relationship between employee recognition and engagement relies on basic psychological principles. People that feel appreciated and whose hard work is noticed will be more inclined to continue with such practices than those whose input is disregarded or they don’t know if the work they do is important. Employee recognition boosts employee motivation Motivation can be intrinsic or extrinsic. In other words, employees can be motivated to perform their duties because they genuinely love what they do, or because they are somehow rewarded for their work. In this sense, rewards do not necessarily have to be items or money – they can also be positive feedback on work. Just think about it: if you do a good job and your manager acknowledges it, you will be more motivated than if you continuously do a good job and never get appreciated for it. You may not even be aware of the fact that you did a good job. This logic is also supported with research: 93% of employees who feel appreciated by their employers are motivated to do their best work. Therefore, your employees will be more motivated to improve company’s product, or give better employee service, thus improving customer satisfaction. Employee recognition improves company culture Company culture is somewhat an elusive term. Simply put, this concept captures the work atmosphere and relationships between employees on a cumulative level. However, company culture is critical to businesses. More than 50% CEOs in this study said that company culture influences employee productivity, creativity, profitability, company value and growth rates. The effect of toxic company culture is evident in low employee morale, poor engagement rates and lack of collaboration between employees. This kind of culture is hindering all aspects of business. Luckily, employee recognition helps to improve employee relations and bring more positivity in the workplace. 50% of employees say that being thanked by managers builds trust with their higher ups. If the setting is right and you create a place where employees feel comfortable working, if they know they can rely on their colleagues and they are motivated by the office atmosphere, improvement of your customer satisfaction will naturally follow. Employee recognition supports employee learning and development In order to improve the quality of your products, step-up your brand awareness initiatives and increase the quality of your customer service, your employees need to continuously learn and grow in their roles. We live and work in a fast-paced environment where means to improve are readily available, and customers expect of their products to follow the newest trends. Therefore, you need to offer as much employee development opportunities as possible. Your customer service representatives must know of the newest product updates, and they must train to be more resilient in resolving your customers’ issues. Moreover, your product team needs to constantly learn and implement newest industry trends to increase quality. Luckily, employee recognition facilitates employee learning and development in more than one way. First, it is conducive to positive company culture – and 70% of the learning on the job occurs informally, many of which falls onto learning from your peers. Second, you can encourage employee growth by tying specific learning and development outcomes to your employee recognition program. A good example is rewarding employees for finishing certain courses – which you can outline in details in their employee development plans. Employee recognition encourages innovation Every company needs to innovate to remain competitive. In fact, innovation on all fronts is absolutely crucial for companies in tech and telecom industries. However, if companies want their employees to innovate, they must create proper conditions for it. No one will innovate and create better solutions for your customers in a workplace that does not appreciate their efforts. This is why 88% of employees that receive strong performance recognition are proactively innovating. So, now that you know all this… Is it time to give employee recognition a go? Here are some free resources you can use to improve your employee recognition efforts: 👉 Employee of the Month templates 👉 Employee appreciation email templates 👉 Employee anniversary messages 👉 Employee appreciation quotes 👉 Constructive feedback examples Also, get our employee recognition playbook to cover A to Z of employee recognition and build a recognition program best suited to your company, employees and your goals.