Linking the Employee & Customer Experience: A Practical Guide to the Holy Grail


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Pundits and CEOs have long debated the relative merits of whether to focus primarily on the Customer Experience (CX) or the Employee Experience (EX). Should the emphasis be on the direct experience of customers, who are the source of the revenues that fuel the firm, or should the company concentrate on employees, who essentially are the “delivery system” for the Customer Experience? On one point they all agree: there is an inherent connection between the two.

Recently there has been a flood of materials espousing the need to “break down the data silos” and connect EX and CX. The problem is that virtually all of these materials agree on the importance but offer little or no practical advice on why or how to make the linkage. Essentially, they suggest that everyone should “look at the data side-by-side.” Perhaps they think that moving the silos closer together is sufficient? Or maybe they expect the data to integrate itself through some process of osmosis and spontaneously help companies make decisions?

EXACTLY WHY Should You Link EX & CX?
Forget the generalizations about how important employees are to the Customer Experience or abstract platitudes about how the Employee and Customer Experiences are symbiotic and mutually reinforcing. Can the experts be more fluffy and vague with their softball responses?

We’re playing hardball: companies should be linking EX to CX because it will enable them to quantitatively answer three pressing business questions. In ascending order of complexity and impact on an organization:

1. How does the employee experience (EX) affect specific customer experiences?

I’m not talking about an answer such as “a lot” or a simplistic response that employees directly touch customers. That doesn’t help much. What you need to know is which specific aspects of the employee experience drive how much of the customer perceptions of their experiences and what is the relative impact of each? Just as a traditional key driver analysis of CX instructs a firm about the relative importance of the various criteria that affect the Customer Experience, in this instance the firm can identify, quantify and prioritize the aspects of the Employee Experience that define the Customer Experience.

2. How does EX influence or shape the overall customer relationship?

The customer relationship, of course, is more than a simple string of interactions. In this case, the questions that need to be answered would be how do EX and transactional CX combined affect the customer relationship? Which specific aspects of EX and CX drive the relationship and what is the relative impact of each? You’re an NPS shop or perhaps your corporate KPI is Customer Effort, OSat or some other loyalty metric: the analysis here combines EX and CX data to uncover the relative importance of the components of each in forging loyal customer relationships.

3. How do EX and CX combined drive business outcomes and customer behaviors?

A somewhat more sophisticated iteration of #2, the results here are business outcomes (such as unit or overall sales or profitability) or customer behaviors (such as customer retention, spend or frequency of shop). The business questions in this case would be how do EX and CX combined affect or influence business outcomes and customer behaviors? Which specific aspects of EX and CX explain what share of the business results and what is the relative impact of each? In this instance, we can reach beyond detailing how EX and CX drive a KPI to specify how the components of EX and CX determine business results and customer behaviors that create (or destroy) value for a firm.

Yes, senior leadership also has to manage other assets and issues, everything ranging from property, product, processes, patents, pricing and placement to branding, advertising, distribution, competitive threats, cash flow and regulatory/legal issues. Regardless of where you sit on the “which is more important, customer or employees” dichotomy (even if you try to finesse the question with an answer of “both”), one thing is certain: customers and employees are the primary assets of every firm. Everything else is in service of best managing these assets.

EXACTLY HOW Should You Link EX & CX?

Since abutting the EX and CX silos doesn’t solve anything, the question becomes how to forge the connection. At what “level” should the employee and customer data be “connected” for the analysis. This is not a right/wrong issue: since every good question sparks another question, the answer is that it will vary depending on the nature of the business issue, the type of business, the business question and, of course, what data are available.

We describe the most typical linkage as either a micro connection or a unit-level connection.

Micro connections are totally granular and are all about the direct linkage between how individual employee experiences translate into a specific transactional customer experience. Micro connections are for measuring how differences in the experiences of individual employees shape the experiences of the individual customers with whom they interact on a specific transaction.

Unit-level connections, by contrast, apply when there is a direct link between a customer and an employee team or group (AKA “unit”) where the individual employees involved can’t be readily identified as dealing with a particular customer or are anonymous. Unit-level connections are to determine how differences in the experiences of employees in various groups or units influence the experiences, relationships and behaviors of customers of those units and the business performance of those units.

While conceptually appealing, macro-level connections, where we deal with overall EX and CX results that cannot be directly linked to an individual employee or groups of employees, often prove less useful. With no granularity, macro-level connections provide a picture from 50,000 feet and require a time series for analysis, making them both more difficult to implement and less useful, in most instances. For these reasons we will exclude macro-level connections from our discussion.

The Micro connection: direct linkage between an employee and a customer

The most obvious example of a micro connection would be a call center, where the caller and the rep both can be readily identified and connected: the EX results from the rep can be linked to the customer’s ratings of the experience with the rep one-on-one. But there also are numerous other scenarios where a micro connection exists and can be measured: online chat; tech support; onsite service; store check-out; any situation involving an agent (say insurance or real estate); B2B account management and sales (when customers have designated individuals or teams); and others.

In most of these scenarios the direct micro connection involves the employee handling a specific interaction, not the overall customer relationship. In other words, the analysis is all about understanding how individual employee experiences shape individual customer experiences. This is not about rating employee skills and shouldn’t be something punitive; rather, it’s about identifying how differences in the individual employee experience manifest themselves in differences in individual customer experiences and identifying, quantifying and prioritizing the dimensions of EX that drive CX. This provides clients with a blueprint for where to invest in EX to best improve transactional CX.

Unit-level connections: direct linkage between a customer and an employee team or group (unit)

The most obvious example of a unit-level connection would be a customer shopping at a particular store, where the customer and the specific store and its various employees can be identified and connected, but micro connections with a specific employee are impractical or unnecessary. Other examples would be a specific hotel, restaurant or any identifiable “site” or virtual site where a transaction occurs (which could be a train, airplane, work team, etc.)

Unit-level connections also can be at different “sub-units”. For example, while sample size may be an issue, a guest’s experiences at a hotel property can be disaggregated into experiences at check-in, with housekeeping, valet, concierge, etc., each of which are mostly with an anonymous group of employees.

Unit-level connections can be applied to any of the three business questions raised earlier, depending on the company’s objectives and questions.

1. Perhaps the goal is to understand how some known group of employees affect the individual customer experience. For example, how was a specific shopping experience at a given store location? This also certainly would make sense for a “sub-unit”, such as the bakery or meat department in a supermarket.

2. The underlying issue might be the customer relationship or loyalty to the brand. Using the store example again, this would be the case if the firm wanted to capture how EX among store employees played into overall NPS, OSat or some other measure of loyalty or attachment to the store brand overall (as opposed to a specific experience).

3. Finally, the firm might want to measure business or behavioral outcomes at the unit level, such as year-over-year sales or frequency of shop or average spend by customers by location.

Unit-level analysis is about identifying how differences in the employee experiences in each unit manifest themselves in differences in customer experiences, customer relationships or business performance at those units and identifying, quantifying and prioritizing the dimensions of EX and CX that drive the specified outcomes. This becomes a strategic tool for managing the overall network of units, as well as a tactical tool for setting priorities and goals for individual units.

The Challenge

There are a number of obstacles to linkage, all of which are internal. All are surmountable. None justify ignoring the value of linking EX and CX.

Data may reside on different systems. There are legitimate concerns about assuring confidentiality. The politics can be daunting. HR may own the employee experience data and be an unwilling partner. I’m sure there are other challenges as well.

Many, if not most, firms already are collecting both EX and CX data. Each are valuable in their own right; combined their value increase exponentially. Failing to link EX and CX is like buying all of the ingredients for a superb meal and then leaving them to sit on the shelves. I say mess up the kitchen and enjoy some fine dining.

Howard Lax, Ph.D.

Supporting better informed decision making with technology, research and strategy. With a focus on CX/VoC/NPS, Employee Engagement and emotion analytics, Howard's domain is the application of marketing information and SaaS platforms to solve business problems and activating CX programs to drive business objectives.



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