Linkage Research

The Evidence:  Service Climate

We showed it 25 years ago, and have shown it many times since:  When employees report they work in a positive service climate, the customers they serve report that they experience positive service quality and are more satisfied. The evidence has accumulated across banks, hotels, supermarkets, insurance companies, auto finance companies and many other kinds of organizations.  When employees say company practices make for a positive service climate, customers report high levels of service quality, satisfaction, and loyalty.¹

A positive service climate is one in which employees perceive and report high levels of:

• Resources (training, equipment) for delivering service quality
   
• Recognition and rewards for delivering service quality
   
• Co-worker competencies to deliver service quality
   
• Internal service from others so that service quality is possible
   
• Emphasis by immediate supervisors, including role modeling, that service quality is a key imperative
   
• Use of customer feedback, such as customer satisfaction and loyalty surveys ― with genuine attention paid to, and action taken on, survey results.

More Evidence:  Job Satisfaction and Employee Engagement

The evidence also shows customers report higher levels of satisfaction when employees report higher levels of job satisfaction. This has been called the “satisfaction mirror” implying that customers mirror the satisfaction that employees experience.  Here, job satisfaction means satisfaction 1) that the  organization is functioning effectively, and 2) in working at dynamic, interesting, and challenging jobs. In this sense, job satisfaction is an active kind of satisfaction that we like to call employee engagement.

The word engagement places the proper emphasis on active involvement and commitment to organizational outcomes, and makes it clear that what’s important is what people do to create those outcomes. In service organizations, in particular, we want the engagement behaviors to focus on service quality and customer satisfaction. We now have good evidence to show that this kind of customer-focused employee engagement is reflected strongly in customer satisfaction and loyalty.²

Choose the Right Linkage Level

Linkage research requires surveying employees for their perceptions and customers for their satisfaction, purchase intentions, and behavior.  We first compare overall employee perceptions and customer satisfaction and typically find close agreement.  We then build regression models in which employee perceptions are potential drivers (independent variables), and customer satisfaction, intentions, and behaviors are outcomes (dependent variables).  We then look for the potential drivers that are most strongly correlated with customer attitudes and behaviors, which help us identify the key levers of customer satisfaction and loyalty and target areas for intervention within the organization.

To build these models, we need to identify the right level of linkage ― individual, team department, branch, or overall organization ― between employees and customers.  This will vary from case to case.

Individuals ―

When identifiable employees serve identifiable customers, as in professional services firms, link the perceptions of individual employees with the satisfaction and loyalty of individual customers.  For example, if a lawyer deals only with specific clients, linking the lawyer's work experiences to the satisfaction and loyalty of her specific clients makes sense.  Or, if a B2B account representative deals with specific customers, again, the individual employee and his accounts would be the appropriate levels of analysis.  The results of such analyses can identify 1) employees who require a stronger service climate ― e.g., more training or recognition ― and 2) changes in work conditions ― e.g., better equipment, more attention to customer feedback, or stronger role models ― that improve employee engagement and thereby enhance customer satisfaction and loyalty.

Teams, branches, and departments ―

When groups of employees serve groups of customers, link employee perceptions and customer satisfaction aggregated at the level at which you would drive change to make customer service better.  For example, in a call center where Customer Service Reps are divided into teams, and customer calls are randomly routed to CSRs on those teams, the best aggregate would be the team for both employee and customer data.  Similarly, in a typical bank branch or retail department, customers are routed at random to tellers in the branch or sales-people in the department.  In these cases, we would collect data from employees of the brand or department, and aggregate and relate it to customer satisfaction and loyalty at the same level ― branch or department.  The resulting linkages could be used to identify employee drivers of customer satisfaction and targets of intervention for improving customer satisfaction and loyalty at the branch or department.

Entire organization ―

To compare your organization to others and identify drivers of customer satisfaction for other companies like yours, use your entire organization as the unit of analysis.  For example, we've found that employees in service companies who report positive leadership on service quality, service climate, and customer-focused engagement behaviors also have significantly higher American Customer Satisfaction Index (ACSI) scores.  These findings were particularly strong in telecommunications and airlines.  Suggesting that in these industries it is particularly important for companies to be seen as service-focused by employees.

Linkage Research:  Published or Custom?

Research findings published by us and others have firmly established the validity of employee-customer linkages.  In the many organizations we have studied, the employee observations that have mattered most for customer satisfaction and loyalty have varied widely.  In some cases, employee perceptions of internal services have been most important; in others, rewards and recognition; in still others, gathering and acting on customer feedback.  So published research findings based on other organizations cannot be directly applied to your organization, even if they are the same type or within the same industry.  What your employees and customers say, analyzed at the right linkage level, is needed to show what matters most in your organization.

Beyond accurately identifying what is important  in your organization, conduction linkage research within your organization has another key advantage.  The research gathers employee input as a key ingredient in the change process.  This involvement demonstrates to all employees management's commitment to listen and to improve.