Engaged employees = loyal customers

By Richard White, director of incentivesmart.

We are working with a leading UK company to launch a customer loyalty initiative to drive sales and engagement in a tough, competitive industry. When we first met, they were adamant that they needed to grow their revenue by throwing reward at their key customers. You would forgive them for jumping to that conclusion – reward programmes are all around us and they seem pretty straightforward; dangle a carrot and the wheels will move? Unfortunately, it’s not that simple. We developed a holistic strategy that targeted attitudes throughout the entire organisation and, in turn, creates a great experience for customers. There is a proven correlation between staff satisfaction, engagement, productivity and profitability, so creating a positive culture and rewarding great behaviour is a stimulant for growth and profitability. Here are just a few of the areas we concentrated on:

Attracting and keeping talent
More than 75% of companies have difficulty in attracting the right candidate, particularly in senior roles, so differentiating your proposition is important. Candidates are eight times more likely to be attracted to companies with structured engagement and motivation strategies.

So you’ve attracted some superstars, now you have to keep them. Replacing talent is an expensive business; the CIPD estimates that the cost of employing every new employee is now almost £10,000. The CIPD also says that engaged employees deliver four times more value to an organisation than non-engaged employees and increased engagement can result in 57% more discretionary effort, but also an 87% reduction in desire to leave.

Improving attendance rates
It is estimated that over 25 million bogus sick days are taken each year in the UK, accounting for around 12% of all sick days taken! The cost to businesses is more than £1.25 billion per year. However, findings show that engaged employees take less than three days sick leave per year, whereas as disengaged staff take double that.

Peer-to-peer recognition
Recognition among colleagues can have a massive impact on positive attitudes in the workplace. A simple thank you when done with sincerity and accompanied by an appropriate reward can substantially increase employee engagement.

Improving communication
The two most important drivers of employee engagement identified by CIPD research into engagement levels are having opportunities to give feedback and feeling informed about the organisation. These promote better performance, employee retention and positive emotions towards work. Two-way communication and feedback mechanisms allow all employees to feel listened to and valued, but also unlock ideas that otherwise go untold. Tower Watson research shows that employee involvement, sharing information and getting feedback relates to a 2.2% increase in shareholder value.

Driving customer revenue
Loyal customers are critical to business growth as they are usually much less price-sensitive, are less susceptible to competitive approaches and can become a powerful marketing ally. Generating incremental profit was always the goal of this project, so we put the final pieces of the jigsaw in place with a well-communicated, points-based customer reward programme. The improved internal communication and the outward enthusiasm that created means that the programme has far surpassed all of the original targets set.

Latest viewpoints

A gift for engagement

Gail Cohen, Director General of the UK Gift Card and Voucher Association (UKGCVA), says this is an exciting time for an industry that is poised for growth

Taking the initiative

Jamie MacKenzie, Marketing Director at Sodexo Benefits and Reward Services, tells us about the company’s latest projects