How Marketers Can Increase Customer Spend by 22.7%

December 22, 2016

by Michelle Smith

Marketers are universally dedicated to looking for ways to deliver compelling value to empowered customers, foster lasting connections with those customers, and measuring the value of their marketing efforts.

However, for many customers and prospects, the unending stream of marketing content on and off-line often leaves them confused and overwhelmed.

But there are ways marketers can consistently deliver on their brand promise and also improve customer spend. As technology-assisted marketing tools continue to evolve, it’s important for marketing professionals to recall and leverage one of their most powerful assets – their organization’s employees.

Employees Don’t Just Represent Your Brand – They Become Your Brand

The FORUM for People Performance at Northwestern University found an undeniable connection between employee attitudes and customer spending in their study, Testing the Internal Marketing Model: An Empirical Analysis of the Relationship between Employee Attitudes, Customer Attitudes and Customer Spending.

The research combined results from extensive surveys of employees and customers at an international hotel chain with the actual spending patterns of customers. However, these findings can be applied to any industry.

  • Customer perceptions that aligned with employee behavior had a direct and positive impact on customer spending – engaged employees created customers that purchased more
  • A 10 percent increase in the extent to which employees ‘tried to satisfy customers’ translated into a 22.7 percent increase in total customer spending and 20.3 percent greater spend per visit
  • A link between employee engagement and customer satisfaction and financial performance was found – even when employees didn’t have direct customer contact
  • Employees’ perceptions of brand value were similar to those of customers but lacked uniformity across hotel locations. That inconsistency translated into vastly different customer experiences and spending patterns.

The compelling link between employee engagement and customer spend offers marketing leaders a powerful means for strategically impacting growth and brand integrity. To achieve this, a consistent, integrated internal marketing campaign incorporating employee engagement strategies is needed.

6 Ways to Maximize Return on Your Marketing Efforts

  1. Involve employees in the design of internal and external marketing initiatives. Just as important as the Voice of Customer, leverage the Voice of Employee. It’s critical to gather employees’ feedback and creative ideas, especially in service industries where front line staff have direct customer contact.
  2. Look for opportunities to enhance internal communications. Clear, consistent messaging provides the foundation for aligned customer expectations and was also found to be a key antecedent of employee engagement.
  3. Recognize and reward employee behaviors that directly and positively impact the customer experience. As evidenced in the study, customers respond favorably when their expectations of employee behavior is aligned with the brand promise.
  4. Partner with your Human Resource leaders to understand and influence the design of company-wide employee recognition and incentive programs. Consider devoting a portion of your marketing budget to specific employee-facing initiatives that link internal and external brand advocacy actions.
  5. Because the research found even employees who aren’t customer-facing can drive customer profitability (or not), leaders should focus on improving employee engagement levels all across the company, or risk squandering additional corporate growth opportunities.
  6. Marketers would be well-served to work on enhancing employees’ efforts to try to satisfy customers to take advantage of the revenue upside of that effort.

This research reminds us that our employees are our best source of competitive advantage – now more than ever. When you align employees behind your brand strategy, employees become partners and assets. Your customers and your company will benefit from the connection between employee engagement, customer loyalty and profitability.

Photo credit: Flickr user 401(k) 2012

About Michelle Smith

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A world-renowned speaker, writer, and consultant, Michelle M. Smith is a trusted advisor to Fortune 500 companies and governments. A highly accomplished industry leader, she is a respected authority on leadership, internal branding, and engagement. As O.C. Tanner's Vice President of Business Development, she intuitively understands the importance of unlocking an employee’s hidden potential, and how to leverage performance development initiatives for a maximum return on investment. A recognition and engagement thought leader, Michelle has been named as one of the “Ten Best and Brightest Women in the Incentive Industry.” She is President Emeritus of the Incentive Marketing Association, past president of the FORUM for People Performance at Northwestern University, among other prestigious board positions past and present.