Linking Employee Satisfaction to Customer Loyalty: Happy Employees Can Help Drive Profitability

On a recent Southwest flight to Las Vegas (yes, it was a business trip), I removed Spirit Magazine from the seatback pocket and started flipping.  One of the first articles, by the Chairman and CEO of Southwest, discussed the company’s focus on customer service.  The central point of the article was that service excellence is a “way of life” at Southwest and it starts with the employees.  Now, if I didn’t know any better, the article could be yet another business leader talking about the importance of customer service, while doing little to back it up.

However, as anyone who has flown Southwest knows, the company definitely “walks the walk.”  It was only about 48 hours later that we experienced clear evidence of this.  While waiting by the gate for our return flight to board, my colleague lamented how she wasn’t feeling well and would love some Ginger Ale.  Unfortunately, after visiting several stores in the concourse, no Ginger Ale was located. When we boarded the plane, the flight attended, having overheard our conversation, handed her a can of Ginger Ale. If that doesn’t demonstrate the Southwest service culture, I don’t know what does.

Achieving service excellence in any company requires participation from every employee.  A well-known Harvard Business Review article entitled “Putting the Service Profit Chain to Work” described the relationship (or “links in the chain”) between employee loyalty and customer loyalty. A simplified version of what the researchers found is – employee satisfaction rises when you equip employees with the skills and power to serve customers. Employee satisfaction in turn raises employee productivity, and higher productivity means greater service value for customers. This increases customer satisfaction and loyalty, which stimulates profitability.

It stands to reason that a happy employee is more likely to go the extra mile to service a customer, as evidenced on my Southwest Airlines flight. If your employees feel appreciated and empowered, they will probably be more pleasant to deal with and show a greater willingness to ensure every customer interaction is handled in accordance with the high standards you expect.  It has also been well documented that dissatisfied employees are less productive and contribute to higher employee turnover in a company (check out a recent Twitter post on creating “happy worker bees”).

Fast-forward to today and there are a number of companies that live and breathe these concepts, including Southwest Airlines. What can leaders and managers of smaller organizations do to promote employee loyalty?

  • Show a willingness and ability to listen to employees. Engage with them often, ask for feedback and suggestions on how to improve both the work environment and the customer experience. Make it safe for employees to talk about workplace dissatisfiers.
  • Set clear expectations and hold employees accountable to a high standard of service. Reinforce to all employees how they contribute to satisfying customers, and thus generating profits.
  • Recognize success, both on a company and individual employee level.  When an employee does something extraordinary, use it as an opportunity to celebrate achievement.
  • Understand factors that contribute to employee turnover.  Uncover the root cause of employee frustrations so they can be quickly addressed.
  • Provide ongoing coaching, training and education so employees have the tools to make decisions that are beneficial for the company and each individual customer.
  • Use metrics to measure and track employee satisfaction and retention, including employee surveys and exit interviews.
  • Finally, communicate effectively and keep your employees ‘in the loop’ when you implement any changes that stem from their feedback.

The linkage between employee loyalty and financial performance is proven and strong. Investing in employees provides companies with another opportunity to gain competitive advantage.

Evan Klein, Guest Blogger, Satrix Solutions Founder & President   

Evan Klein is the founder and President of Satrix Solutions.  For nearly 20 years, he has been responsible for maximizing customer satisfaction, retention and profitability in high touch point, customer-centric organizations.  As an enthusiastic champion for voice-of-customer driven change, Evan has designed and executed customer feedback programs for dozens of business-to-business firms.  He has experience with all phases in the life cycle of these programs, including design, construction, execution, analysis and, most important, ensuring they are driving positive change.

About Satrix Solutions – Satrix Solutions was founded with a singular goal – help businesses maximize potential and opportunity by engaging in active dialogue with their customers. Companies rely on our formal customer feedback programs to gather valuable insights from existing, former and potential customers. The analysis and recommendations we deliver serve as a blueprint for driving operational improvements to enhance the customer experience. By leveraging our proven approach to capturing and responding to the needs of the market, our clients are able to improve customer retention, maximize share-of-wallet and increase sale close rates. Satrix Solutions serves small to mid-size businesses in a variety of industries, each focused on realizing the financial benefits of creating a differentiated service experience. To learn more visit


11 responses to “Linking Employee Satisfaction to Customer Loyalty: Happy Employees Can Help Drive Profitability

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