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Written by: Alex Andrews, CPHR

A few years ago I sat in a meeting with the then executive team as they discussed the necessity of improving customer satisfaction and loyalty. They debated over what programs and perks, and rewards and recognition we could offer, all in an effort to increase the perceived value our customers placed on our business and services.

Hours were spent designing and implementing various initiatives only to find out, after later surveying our customer base, they had little, if any, influence on their overall satisfaction and loyalty. The trap we fell into was believing that increased satisfaction and loyalty would be the result of giving discounts and various incentives to our customers. And though we attracted several new buyers, we had done very little to connect with them in a meaningful way and help them understand why we are in business. These customers quickly moved on as they followed the next deal and were never seen again.

We discussed ad nauseam what the possible solution was, and after enlisting the support from outside consultants, we took a step back and started observing the customer activity as they entered our stores. Bit-by-bit, we began to notice a lack of genuine engagement and motivation within our employee base. The personal experience from the moment a customer walked in the door until they left, seemed unwelcoming and very transactional. Employees were disinterested and distant from those they were serving and this was a direct result of the level of disengagement we were experiencing.

We believe we could force our employees to work harder and as a result they would care more about their jobs and the customers who walked through the door. The reality was, however, we needed to create an environment which motivated and encouraged them to succeed.   

Increase Customer Loyalty through Employee Engagement

Now, I should preface this by clarifying my position. I am not saying organizations with higher engagement scores are guaranteed business success and improved performance, or that measuring engagement for the sake of measuring will tell you how to address customer satisfaction and loyalty, but that there is evidence employee engagement can have a positive impact on result.

Higher employee engagement has been linked to lower levels of absenteeism and turnover, higher levels of motivation and productivity, and specifically, improved customer satisfaction – but how?

It isn’t difficult to see how engaged employees are more enthusiastic and immersed in their work. They have a greater emotional attachment to their responsibilities which means an increase in discretionary effort, or going beyond the call of duty. Their goals mirror or strongly support the mission of the organization and their job is more closely tied to their individual identity. If these qualities are found in customer facing employees, customers will be treated less like a transaction and more like a part of the family. This personal interaction will result in greater use of products and services and a more loyal workforce. Satisfied customers are substantially less expensive to serve, and will return more frequently.

In recent years, discovering this correlation has put more attention on employee engagement, however, the reality is that this is not a new topic. Business experts have been discussing the impact engaged employees have on business performance since the early 1990s and while almost any leader can logically explain the benefits of having an engaged workforce, like my previous executive team, little is usually done to address it.

Why is this? The unfortunate reality is that organizational leaders relinquish the responsibility of improving engagement to the HR team. Typically HR administers a survey, analyzes and interprets the data, and reports to management what their staff have said. Management then pushes HR to create generic, one-size fits all change initiatives or programs to reach a critical mass of employees, in the hopes of moving the engagement needle up a few points by the next survey. This approach is archaic and yields few results. Although HR enthusiasts are advocating for a more strategic level of involvement by the HR staff, this will not win over too many hearts. HR should not be responsible for affecting the attitudes, and in turn the engagement of employees. If senior management is abdicating this role to HR, they will not own it and, therefore, not be invested in the outcomes. However, if this is seen as a higher level, strategic initiative, senior leaders will do more to be involved in increasing engagement and, therefore, improving customer satisfaction and loyalty.

Simply start by making a plan to have engagement a focus for all levels of the organization. And communicate it to your workforce.  

In our experience, we learned a valuable lesson through our countless mistakes, and that was that people are what drive business, not things. Our employees, customers, and all who we called shareholders are people. Once we understood that, and how to engage them in a meaningful and deliberate way, success in way of profits was a natural outcome.

Alex Andrews, CPHR is a member of the HR leadership team for one of Canada’s largest agricultural and construction equipment dealership groups where he oversees the organizational development and training programs. He can be reached at