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The Business Impact of Employee Experience on Customer Experience

I am working on a new trend report covering this topic in part and this is based on the work I do (disclosure) – more on the report here: Employee Customer Experience Connection. One of the primary assumptions I’m exploring for the report is that effectively driving a positive employee experience has interrelated benefits on the customer experience too. And as we all know, the customer is king so this seeming interrelationship would seem a slam dunk and of great interest.

There is a lot of anecdotal evidence of the interrelationship, but I am not finding a huge amount of concrete evidence of this based on research. Still I am convinced and persist in my efforts. This post is in part an exploration of this and I am also trying to get others’ views so please take part in the poll at the end 🙏

This Forrester report on the The Total Economic Impact™ Of Microsoft Viva was commissioned by Microsoft. These kinds of reports are pretty standard for many technology vendors to try and justify, as the title suggests, the economic impact of using the technology. I thought this would be an excellent start since Microsoft Viva is an employee experience platform launched by Microsoft not too long ago – more on it here: Employee Experience and Engagement | Microsoft Viva.

I have pasted a relevant piece from out of the report below (the diagram and section after it in yellow). This piece covers the benefits that derive from improved business outcomes. It seems natural to have expected that of the many benefits covered in the report (see full list below), this one would contain something to do with impact on customer related outcomes, like revenue growth, increased satisfaction and loyalty, reduced churn or improved retention, etc. Not so much. Although you could assume some indirect impact, like getting to market faster means customers can buy the product sooner and therefore incremental revenue is realised sooner, it’s still not what I am after.

Most of the benefits, like the many others (which are notable), are very much focused on internal metrics. I discuss this at the end of the post.

All benefits covered in the report:

  • Faster Onboarding Process
  • Improved Productivity from Content and Expert Discovery
  • Improved Employee Retention
  • Time Savings for Operations Teams
  • Improved Business Outcomes – see detail below
  • Unquantified Benefits
  • Flexibility

Improved Business Outcomes

Evidence and data

Enriching employee experiences resulted in better business outcomes, including better product development, greater innovation, and increased revenues. The Viva suite influenced key performance indicators such as time-to-market, product market fit, and utilization rates by tying actions to outcomes. Each app additionally improved employee competency, engagement, and motivation. This benefit increased with extended deployment, higher adoption, and tighter integration with Viva Goals to focus people. Achieving these benefits required business process redesign, leadership development, and change management.

The head of program management in software shared that Viva Goals enabled the launch of a product in eight new regions in fewer than four months, which would have taken nearly two years otherwise. Not executing this launch would have left millions of dollars in deals on the table.

The IT executive for workplace IT experience in professional services said that Viva improved time-to-deliver by enabling employees to quickly surface exemplars and best practices. The IT executive also said that Viva Insights creates focus time, which “has been a game changer and gives people time to concentrate on delivering more value to the company.”

The COO in electronics said that Viva Learning helped drive employee retention through increased engagement and motivation. This avoided hundreds of thousands to millions of dollars in annual lost revenue because product engineering attrition delayed new product launches.

The product owner in CPG said that Viva Topics helped with cross-team collaboration and learning. This directly increased shared knowledge and knocked down silos, which ultimately improved R&D potential.

Modelling and assumptions

For the composite organization, Forrester assumes that:
It realizes $6 million in incremental revenue annually due to faster time-to-market.
Thirty percent of faster time-to-market is directly attributable to Viva.
There is a 45% gross margin applied.

Risks

The following factors may impact other organizations’ realization of this benefit category:
The value of faster time-to-market for the organization.
The extent to which Viva is leveraged to drive innovation and development velocity.
The organization’s average gross margin.

Results

To account for these risks, Forrester adjusted this benefit downward by 20%, yielding a
three-year risk-adjusted total PV of $1.6 million

Why are employee and customer experience outcomes not better aligned?

Read some of the articles I have curated or written on about the interrelationship of these two fields, either on the landing page at the bottom, or at the beginning on the landing page itself, where I crunch some numbers about the potential value of the market combined. You will see that there is a lot being said about this.

What is a struggle is to find verifiable, quantified, research backed evidence. I’m not sure why but let me hazard a guess or 2:

  1. This is not a thing and it is not a trend, i.e. employee experience has no bearing on customer experience and outcomes related to the latter. I struggle to believe this but must accept it’s a possibility.
  2. We are not there yet and the scientists and researchers have not cottoned onto this yet so have not done work on it yet. This is more likely the case.

I’m not giving up. I believe in this. At this stage, short of the type of evidence mentioned above, I’d love to just get some validation. Please let me know what you think and answer the poll below. If nothing else, it will ensure me I’m not going mad and others agree 🤪 Also, if you have come across any evidence, please share it in a comment.

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