Customer Experience vs Employee Experience

Southwest Airline’s founder Herb Kelleher famously said:

“If you treat your employees right, guess what? Your customers come back and that makes your shareholders happy.”

This simple declaration implies looking at employee satisfaction, customer satisfaction, and shareholder value as a system. It begins with employee satisfaction.

The readers of this blog will probably have first-hand experience with how seldom this system view is put into practice.

Silo Mentality

Contrary to Kellher’s statement, Salesforce executive Tiffani Bova (2023) reports that nine out of ten C-suite executives in the United States focus on customer experience as the first priority. She argues that it is indeed possible to grow a business with great customer experience and mediocre employee experience.

But to achieve sustained major growth, companies need to focus on positive employee experience (EX) and positive customer experience (CX) simultaneously.

Bova is the global customer growth and innovation evangelist at Salesforce. She has also been a research fellow at the consulting firm Gartner. Bova was named one of the Top 50 business thinkers in the world by Thinkers50.

The CX Dilemma

CX is defined by how your customers feel when they engage with your products/services. Bova provides data to show that when you keep industry and size constant, companies with high CX scores had three times higher shareholder returns than the lowest-performing CX competitors.

Jeff Bezos, the founder of Amazon, described the CX dilemma:

“One thing I love about customers is that they are divinely discontent. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary.’”

Managing this CX dilemma means improvement never ends. That means your employees are constantly thrown into new situations. Eventually, they begin to leave or remain at the company with little enthusiasm. Recruiting competent, open-minded employees gets more difficult.

Superior CX depends on superior EX. Bova reports that 74% of surveyed institutional investors agreed that a company’s ability to win the best talent is more important than gaining new customers or increasing valuation.

Some Suggestions

Who Is responsible for EX/CX?

If you view EX/CX as an integrated system, then the responsible entity should consist of the Chief Marketing Officer, the Chief HR Officer, and the Chief Technology Officer. Working as a troika, they can view issues from a system-wide perspective. Job descriptions should be changed to reflect the importance of EX/CX and yearly bonus awards should include EX/CX goals.

The Chief Digital Marketing Officer should report to this troika and not to marketing. And having the chief HR officer as a peer of the Chief Marketing Officer and the Chief Technology Officer helps move the HR away from reporting to the CFO or Chief Legal Officer or Chief Administrative Officer.

This arrangement sends a powerful message: HR contributes to top-line growth. In too many companies, HR is perceived as an administrative function whose key mission is to reduce risk/cost.

Begin by Asking Your Employees

Before hiring consultants, ask your employees for their ideas. Responses should be differentiated by the degree to which employees have direct contact with customers. For example, the emergency room nurse’s comments should be more valuable in a health care system than those of the Chief Legal Officer.

According to Bova, 61% percent of surveyed employees agree that employers need to do a better job of listening to employees.

We recommend using open-ended questions rather than forcing choices between options selected by management. Design a questionnaire so that it can be completed in five minutes or less.

Benefits of a Strong EX/CX System

According to Bova, companies with both high EX and CX exhibited a three-year compound annual growth rate of 8.5% versus 4.35% for companies with low EX and CX.

She describes a three-year study at one retail chain. Customer-facing employees with more tenure, more cross-departmental experience, and full-time status generated $87 per person hour versus $57 for those employees not having those three experiences.

What about the added costs of full-time employees versus interim? When Bova factored in costs, the hourly per-employee profit was $41 versus $59 for contingency talent.

Metrics that Matter

Useful measurement tools are mandatory to assess improvement over time. Within the CX arena, Bova recommends the nNet promoter score (NPS).

For EX, Bova recommends the employee net promoter score (eNPS). The author recommends collecting this information monthly or quarterly, at a minimum. The surveys should not be a one-time event but an ongoing process that allows for constant improvement in the system.

No Inexpensive Quick Fix

Looking at CX and EX as an integrated system for generating growth requires a corporate culture change starting with the board of directors.

And board commitment requires a change in CEO compensation. It may require the removal of key leaders who remain wedded to an outdated “stay in your own lane” framework.

A strong CX/EX system is a journey that never ends. But the journey benefits employees, customers, and shareholders.