What a difference a couple of years can make. In late 2012 Total Fitness, a UK gym chain, was fighting for survival. Having gone through a pre-pack administration, the new owners decided to consolidate its assets, reducing the number of gyms from 24 to 16. Employees were laid off and morale was at an all-time low.
All of this could have been avoided if the company had prioritised people over sales, says Russell Teale, HR & customer experience director at Total Fitness. “In December 2012, the new chairman took me to one side and said there was a need for a huge focus on customers and a huge focus on employees, which was music to my ears,” explains Teale. “It was becoming more and more apparent in the gym market that the only real differentiator was people.”
Engagement and customer experience needed to be improved in tandem – and not treated as separate silos. So the company introduced the Net Promoter Score (NPS) as a way of tracking loyalty among gym goers, alongside initiatives that encouraged staff feedback and input.
Fast forward to today and linking employee and customer satisfaction is paying dividends for the business: from an NPS score of minus 31 at the outset – the worst in the industry – two years later they’re at plus four, which is nine points above the sector average. This correlates with a 14% growth in membership over the same two-year period.
Total Fitness is an excellent example then of how important the link between employee and customer engagement can be. For those HR directors just beginning to explore this connection, it’s worth considering the following:
Make the business case
Right off the bat, HR directors must be able to prove the relationship between employee engagement and customer experience. Encouragingly, Phil Anderson, client director at Ashridge Business School, says that this shouldn’t be too tricky. “If the HRD needed any proof, they wouldn’t have to look very far,” he says. “There is lots of research which shows that happy employees lead to happy customers who are loyal and spend more money – which leads to better profit.”
HRDs need to fully utilise the power of data says Eugenio Pirri, vice president of people and organisational development at luxury hotel group the Dorchester Collection. “Data is our friend. We’re so lucky to live in a world where we have so much access to data; it’s just about using the right data and keeping it really, really simple,” he explains.
“All businesses should be able to say what percentage of their customers and employees are engaged or not engaged. You can put financial value to engagement. It’s proven statistically that if your customers are engaged they’re up to 70% more likely to spend more on your goods and services, because they like you and they’re loyal to you. In our hotels it’s really key because people who are engaged are more likely to use our restaurants or go to our spas. There’s revenue to that.”
Hone the hiring process
Employing staff who are a good cultural fit and buy into the company’s vision is a great place to start. Teale says there are now much tighter controls around the hiring process at Total Fitness. “There’s been a shift from recruiting anyone with a pulse, which was very much how our club managers were set up to recruit people in the past, to hiring people with the right values and behaviours. Through assessments you not only get somebody who’s got – for example – a fitness qualification, but you also get someone who can go out there and deliver that experience,” he says.
Pirri is similarly choosy about who he employs to work in the Dorchester Collection’s luxury hotels. “Some people are naturally talented, but they’re just better working for the competition because of their way of thinking or their way of behaving,” he says.
“If you can get talent and fit right and then you invest in that person, the potential is amazing.”
Go back to the shop floor
All too often management teams – including HR directors – are unfamiliar with the customer experience. “Have you been and seen the customer?” asks Michael Moran, chief executive and founder of 10Eighty, a leadership consultancy. “HR, as a profession, typically doesn’t spend time with customers. If you don’t understand your customers, you can’t know what they need to be delivered by the employee,” he points out.
Anderson says taking board members on field trips to hotels, restaurants and retailers that have successfully married employee and customer engagement helps bring PowerPoint slides to life. “Take them on an immersion visit to a really great place like the Dorchester, or somewhere that is similar to their organisation, and let them see what’s going on with the service,” he suggests. “Then you can compare your experience versus someone else’s. It provokes a much more visceral reaction than just looking at a load of data.”
Blend process with intuition
In seeking the ultimate customer experience, the temptation can be to introduce staff handbooks the size of the Yellow Pages. But a successful employee and customer engagement programme needs the lightest of touches, says Pirri. “You can’t ask for entrepreneurial people and then put a load of barriers in front of them, so we try to keep those to a minimum. There are certain things you have to have standards on, such as health and safety, but when it comes to naturally engaging with a guest you can’t be scripted,” he explains.
Ceri Gott, HR director at restaurant group Hawksmoor, says it’s important to empower employees to come up with their own solutions. “We support people to have autonomy wherever possible,” she says. “As long as they know what they’re trying to achieve, we are happy for them to find their own way to achieve it.”
It’s also crucial that the interaction between employees and customers is natural, she adds. “Authenticity is so important. We want people to be themselves.”
Rome wasn’t built in a day and neither is a successful employee and customer engagement programme. At Dorchester Collection, Pirri and his team have enjoyed some notable successes since he joined three years ago. “We’ve managed to put millions on the bottom line because we’ve actively reduced our disengaged guests by more than 10 points, and we’ve improved our loyal and fully engaged guests by more than 13 points. That’s huge because it means more people are happy.”
But Pirri isn’t ready to rest on his laurels. “Patience is a virtue. Understand that this is not a quick win. This is a continuous journey. Things can change in an instant so you can never afford to take your eye off the ball.”