Harnessing the Power of Employee Feedback for Business Growth


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In an extremely competitive marketplace, business leaders need to dig deep to identify their companies’ differentiators. As products and services become increasingly commoditized, many organizations are finding that their biggest differentiator lies in creating an amazing customer experience, which begins with creating an exceptional company culture with happy, fully engaged employees. It’s a basic premise of the renowned service-profit chain: employee satisfaction is CRITICAL to customer satisfaction.

Despite this widely cited connection, many companies have little focus on employee satisfaction. A recent study conducted by MarketTools for the Globoforce Workforce Mood Tracker™ revealed that 38 percent of employees are actively looking for a new job, and 52 percent are dissatisfied with the level of recognition they receive. A MarketTools workplace study from earlier this year found that nearly three-quarters (72 percent) of the employees surveyed said that their company did not have a formal program to regularly solicit employee feedback, or if their company did have such a program, they weren’t aware of it.

52 percent [of employees] are dissatisfied with the level of recognition they receive

This also has a ripple effect on customer satisfaction. A Harvard Business Review article reported that at a leading fast food chain, stores with low workforce turnover rates enjoyed 55 percent higher profits than stores with high turnover. The same article referenced a study at a large property and casualty insurer that found that customer satisfaction levels dropped from 75 percent to 55 percent when a single service worker left the company.

Satisfied and engaged employees provide a better customer experience, leading to improved customer satisfaction and loyalty, which in turn fuels business growth. In contrast, recruiting and on-boarding new employees is costly—not just in hiring and training expenses, but there’s also cost associated with the time it takes new employees to “”ramp up”” to understand how to effectively engage with customers and to begin producing results. Research conducted by the University of California, Berkeley and M.I.T. showed that turnover costs are often 150% of the annual salary for the employee.

At MarketTools, we work with market leaders who understand that collecting and acting on employee feedback to improve employee satisfaction is a critical element in ensuring the optimal customer experience. Many of the best practices in establishing an effective voice of the customer (VOC) program also apply to voice of the employee (VOE) programs. These steps have been taken by companies across industries to improve morale and keep employee churn to a minimum, thereby improving overall customer satisfaction levels.

  • Rally the troops

    Employee feedback programs are most often driven by a corporate human resources department, and it is crucial for HR to gain the entire management team’s commitment to the effort. It’s also helpful to create a feedback program committee with representatives from various departments of the company to ensure you are asking employees the most relevant questions, addressing issues that management may not be aware of, and encouraging people from across the company to participate.

    It’s vital to encourage employee engagement in the program, and to generate awareness of management’s openness to employee input, through ongoing communications about the feedback program, including frequent updates and progress reports. Many of our clients also offer incentives tied to program participation. Remember that the response rate for an employee satisfaction survey should be at least 80 percent—anything less could signal a belief that individual feedback will not affect corporate actions or policies.

  • Gain consensus about program goals and follow-up

    Before beginning an employee feedback program, management needs to reach consensus on the following:

    • The objectives of the program and topics you’d like to measure: What information are you hoping to get from the program? What is your overall goal? How will you use the feedback collected? Answering these questions will help you ask the right questions to solicit the type of feedback that will positively impact the employee experience.
    • The scope and timing of the employee feedback program: Are you planning to gather feedback annually, quarterly, continuously, etc.? Will all the employees receive the same survey, or will you create different surveys for different functions, regions, etc.?
    • Follow-up procedures: How will you take action to address the employee feedback? How will you determine what issues to tackle first? Follow-up is extremely important—don’t ask the questions if you’re not prepared to provide a response. Even if there are requests that you can’t satisfy (such as giving everyone large pay raises), you can still let people know you’ve heard their requests and provide a response. If you demonstrate to employees that their feedback is valued and respected, they will be more likely to provide honest feedback on an ongoing basis.
  • Establish trust

    Ensuring confidentiality is vital to obtaining frank and honest feedback from employees. It is important to minimize information that has the potential to identify individual employees. Employee concerns regarding confidentiality can lower survey response rates. To help prevent this, privacy measures should be clearly communicated to employees at the start of the VOE program.

  • Set expectations

    Be sure employees know that their feedback is valued, but that change takes time. You can show your commitment to making changes based on employee feedback where possible—even small improvements make a big difference. If you continually communicate results and actions taken, you should see an immediate boost in employee morale. By caring enough to ask for input that begins a dialog, you’ve taken an important first step in increasing employee engagement and loyalty.

Using these best practices, MarketTools helped a leading consumer electronics firm implement an employee feedback program to foster an engaged, satisfied, and motivated work force as part of a larger customer satisfaction initiative. Since beginning the program, the company has reduced annual employee turnover in their contact center to 12 percent—less than half the employee turnover rate commonly seen in contact centers—helping them achieve award-winning customer satisfaction levels.

The process of creating a customer-centric culture begins with employee satisfaction: happy, engaged employees build deep and lasting relationships with customers that have a significant impact on customer satisfaction and loyalty. The connection between employee satisfaction and corporate profits is undeniable. An effective employee feedback program can help you forge a key link in the chain between employee satisfaction, customer satisfaction, and profitable growth.

Greg Marek
Greg Marek is Vice President of Marketing at MarketTools, where he leads all product marketing, demand generation, and marketing communications activities. Prior to MarketTools, he held senior-level marketing roles at leading companies including Citrix Systems, Intuit and Oracle.


  1. Employee Culture is one of the most overlooked and yet most powerful tools any business has to achieve wild success, generate local and virtual referrals and build a business worth talking about.

    My background includes equal parts of HR and Marketing, in fact, I wrote a little white lie relevant to this topic entitled, “Little White Marketing Lie #2: Our Employees Set Us Apart.”

    The article not only states how employees are key to the customer experience, but how a business owner can work to create the employee culture of their dreams.

    Great reminder, I’m going to be sharing it prolifically!

    Elizabeth Kraus – Author of 365 Days of Marketing – 12monthsofmarketing.com

  2. Greg,
    We could not agree more. Good article.

    Beyond building trust, however, is building staff collaboration, the ability to be genuine, to communicate with empathy (as opposed to competitively), to solve problems to correct mistakes and to feel successful personally and professionally.

    When you have all six of these measurable components, it takes all the guess work out of the employee empowerment and your culture shift initiative.

    I am amazed when companies define – with employees – the type of work enviornment to do this; measure it in 360 performance reviews; hire based on their decisions and watch customer service and customer retention soar.

    I think you break this article down really well – and it is timely and very important.

  3. It was enlightening to read Greg Marek’s article. I have come from two different companies who felt that employees were a deterrent to doing business. The first large corporation did it’s best to alienate and divide the labor force: They felt it gave them control. Sad for an airline who is supposed to provide customer service. The second company, a nationwide retail firm, recently decided, based on advice from their financial department to rid themselves of salespeople who had been working for them for any length of time, were experienced, had a loyal customer base and made more than the starting wage.

    Both corporations created an atmosphere of fear, distrust and uneasiness–an unsustainable environment in which to be successful and profitable. The turnover rate is high and as Greg mentioned, the start-up expenses for new employees, at least in retail, far outweighs the marginal expenses of part-time, no benefit but experienced employees.


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