The Link Between Employee Attitudes, Customer Attitudes and Customer Spending

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As CEOs will agree, the most important issue facing chief executives is continuous focus on driving profitable revenue growth. As research continues to show — in this study and others from the Forum — there is a direct link between employee satisfaction, customer satisfaction and profit. It is time and money well spent for C-suite executives to invest in their employees’ engagement and understanding of brand values. In a study from the Forum for People Performance Management and Measurement, the results show a direct relationship between employees and customer perceptions of a hotel brand and increased customer spending behavior. While this study specifically examines a hotel chain, the benefit of supporting employees to understand and deliver the brand value of an organization to its customers is transferable across every industry.

The study, “Testing the Internal Marketing Model: AnEmpirical Analysis of the Relationship between Employee Attitudes, Customer Attitudes and Customer Spending,” examines the results of implementing an Integrated Internal Marketing (IIM) Model at a major hotel chain. The IIM Model is designed to link employee and customer behaviors to financial outcomes as shown in Fig. 1.

To investigate these connections, the study pulled information from employee and customer surveys and connected it to the same customers’ spending behavior from a loyalty program database. Main findings include:

• The key drivers of brand value to customers can be identified and linked to customer behavior. The drivers for the hotel chain are fast and efficient check-in, employee efforts to satisfy customers, hotel options and amenities, and precision in service.

• Employee perceptions of brand value are similar to customers, but lack uniformity across hotel locations. This shows up as inconsistency in employee attitudes and, consequently, customer experiences.

• Customer perceptions of the brand have a direct and positive impact on how much money customers spend per hotel visit.

These findings support management action to influence employee attitudes and behaviors to create a positive revenue impact.

Employee understanding of brand value and how they represent those values to customers is the critical finding of this study. Successfully delivering the key strategies to employees requires strong internal communications and employee engagement. As discovered in the hotel example, this communication needs to be delivered consistently across the organization for maximum benefit. Once employees understand and are engaged in the brand values of the organization, increased customer satisfaction and spending will result, which drives financial growth. Here are a few ideas to get started:

• Establish clear lines of communication: This study found that consistent communication was important. Delivering a message consistently to all functional areas or departments will prevent inconsistent delivery of the brand values or key drivers to customers.

• Survey employees: Gather their thoughts on how employees understand brand value. Review the findings, find the gaps in communication and implement communication appropriately so the team is equipped with what they need to deliver the key drivers for success.

• Develop a culture that is a mix of cooperation and competition: Set the expectation for employees to strive to work cooperatively, but also encourage healthy competition where employees can feel free to voice their opinions in pursuit of the best solutions for customers.

• Elevate engagement with a formal employee recognition program: Building structure around recognition allows the organization to consistently reinforce behaviors that support the brand values that are critical to financial success. Providing clear direction and validating the actions taken toward those objectives will increase employee engagement and commitment toward building meaningful customer experiences.

Employees are the face of the brand. When these employees deliver the company’s brand values to customers, their efforts translate directly into increased spending by customers. As this study finds, simply delivering the value “tries to satisfy” increased the total amount of money customers spent over time and how much they spent per visit. The time investment spent to support them in their efforts to understand and articulate the brand values and align with customer attitudes about the brand is something that will increase customer spending and contribute to every company’s bottom line.

The research study “Testing the Internal Marketing Model: An Empirical Analysis of the Relationship between Employee Attitudes, Customer Attitudes and Customer Spending” was conducted by Dr. Frank Mulhern, Northwestern University, and produced by The Forum: Business Results Through People. The Forum: Business Results Through People (formerly Forum for People Performance Management and Measurement), affiliated with Northwestern University, is an organizational trust for thought leadership advocating that the most effective way business leaders can create and sustain organizational value is through their partnership with people. The full study is available at www.businessresultsthroughpeople.org.

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