Employee Engagement vs. Employee Satisfaction

Searches on "employee satisfaction" have dropped by half since 2004, while "employee engagement" has come from nowhere to surpass "employee satisfaction" searches in 2009.

Whenever I talk about employee engagement, I hear very different reactions:

1. "Employee engagement is just the latest buzzword for HR staff to embrace. It offers nothing materially different from employee-satisfaction research. It's just a way for consultants to sell last year's fashions at marked-up prices."
2. "Employee engagement represents an important breakthrough that links employee satisfaction to business outcomes. All employee-satisfaction research should become employee-engagement research."

One of the techniques I was taught for moderating focus groups is to assume that what the speaker says is true, from their perspective, and therefore to try to understand that perspective. So let's assume for the sake of argument that both of the above statements are true.

How might they both be true?  Employee engagement makes explicit best practices for employee satisfaction that many researchers have followed implicitly.

• Professional satisfaction research projects always focused on engagement. Employee-satisfaction research has traditionally been a measure of employees' emotional and rational satisfaction with their job and employer. Thorough researchers have always analyzed employee satisfaction as a key driver of employee retention, customer loyalty and other positive business outcomes.
• Many satisfaction projects just measure satisfaction, rather than act on it. Far too many organizations do employee-satisfaction surveys simply because they feel they need to. They make tactical changes based on the feedback, but that's it. They aren't linking employee satisfaction to customer satisfaction; they aren't linking employee engagement to quality.

So, if you've done employee-satisfaction research strategically, employee engagement to you is just a new label for an old practice. But if you've done employee-satisfaction research tactically in the past, employee engagement represents a new best practice for you to aspire to in your research.

This evolution is analogous to how customer satisfaction research has evolved into customer loyalty research. Good customer satisfaction studies always looked at loyalty, but now that connection is explicit in the new label for the domain.

So for those of you with buzzword backlash, embrace the term employee engagement: point out the practices you've done in the past that differentiate such research from tactical employee-satisfaction studies, and help us all to do a better job conducting research that will help us satisfy and engage employees to create desired organizational outcomes.

SharePoint as Survey Software

We often have prospects looking to migrate to a survey software application from a home-grown system. Recently, we've been seeing more organizations looking to move from Microsoft SharePoint, an enterprise content management platform.

What clients liked about SharePoint when it comes to building online surveys:

• The WYSIWYG form editor makes it easy to build basic surveys.
• It offers complete flexibility for programmers to use HTML, JavaScript, AJAX techniques, Flash and other standard web development approaches.
• It stores data directly in the repository that the administrator selects (e.g., SQL Server or Oracle).
• Survey results are readily exported as CSV (Comma-Separated Value) or XLS files.

Here are the features that caused SharePoint users to move to a dedicated feedback platform:

• It is difficult for business users to create surveys of moderate or significant complexity with SharePoint.
• The lack of integrated email support meant that invitations, reminders and thank-you emails had to be created outside the system.
• The lack of panel management meant administrators couldn't target respondents and track past survey activity.
• It is difficult to personalize surveys based on known data.
• SharePoint lacks survey-specific web services, making integration more tedious.
• Some users reported security concerns.
• Until recently, there was no support for basic skip patterns (available with MOSS 2007) or advanced branching.
• It has no real-time reports or dashboards and can't export results to SAV or PPT files.

SharePoint is a great interim solution for organizations first adopting web surveys. It excels at short, uncomplicated and static surveys, but organizations outgrow it when they need advanced questionnaires, intermediate MR functionality, integrated email invitations, panel management or enterprise feedback management.

Panel Management Explained

A panel is a group of people with relevant backgrounds who agree to participate in surveys. Businesses can organize a panel for each group of key stakeholders: customers, employees, resellers, partners, prospects, etc.

Because panelists agree in advance to participate in surveys and feedback efforts, they become almost a guaranteed source of information for the sponsoring organization. Customers typically participate in the panel because they value their relationship with the sponsor, and they appreciate the additional information, influence and early access that comes from participating in the panel.  For general market panels, panelists instead often look to merchandise and cash rewards, though even for many general panels people participate because they want to make their views heard.

How does a panel work? You invite an individual to participate in a panel and communicate the ground rules:

• What they will be surveyed about
• How you'll use the information
• How frequently they'll be asked to participate in surveys
• Why it's important that they participate
• How they can opt-out if they change their mind
• What's in it for them

Once you gain their permission, you invite the panelist to complete a registration survey, which will gather detailed demographic or firmographic information. This information can be used to target individual surveys to panel subsegments and also provides for rich opportunities in cross-tabulating survey results.

In contrast to online communities, in a panel, members communicate only with the sponsoring researcher, through the medium of the surveys they are sent. In online communities, members can engage in discussions with one another through an online portal.

Want to learn how to set up your own customer panel? Download a complimentary copy of my white paper, Customers as Confidants: Customer Panel Management Made Easy.

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Customer Experience Management Now a Core Differentiator

Interest in Customer Experience rose dramatically across organizations we surveyed as part of our Vovici CE IQ study, increasing from 47% of respondents stating that Customer Experience Management (CEM) was very important to them in 2008 to 63% in 2009. Clearly the global economic contraction focused many organizations more tightly on understanding how customers are interacting with them, and this has put a dramatic new emphasis on CEM.

In fact, much to our surprise, more than half, or 55%, of respondents say that customer experience is a core differentiator that distinguishes their business from others in their market.  Customer experience has arrived, and is now as important as traditional differentiators such as quality, service and staff capabilities. Despite the global economic contraction, price was not frequently cited as a core differentiator (18%).

When asked to assess the current benefits of CEM, customer satisfaction and loyalty were the most important, cited by 52% of respondents. Next was providing greater positive word of mouth (50%) and excellence in customer service (42%).

Leading the areas where organizations could do better, providing greater consistency of experience at every customer touch point was mentioned by only 36% of respondents. This is an area for improvement, as excellence in Customer Experience Management should drive such behavior. Top-line and bottom-line benefits from CEM are currently experienced by only about a third of respondents (35% and 29% respectively).

With organizations acknowledging how important CEM is to distinguish themselves from competitors, it is more important than ever to focus on those CEM best practices that build customer loyalty.

Note: The survey of over 200 organizations around the world is based on a convenience sample designed to identify the impact of CE best practices on loyalty, in order to prioritize those best practices. These results are illustrative and are not representative of any wider population of organizations. For more on the methodology, see Customer Experience Study Findings.

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Customer Loyalty Questions

When asked to measure loyalty, what questions should you ask? 

For instance, in The Value Profit Chain, Earl Sasser Jr. and his co-authors provide this list:

• How likely are you to repurchase?
• How likely are you to tell someone else about your experience?
• How many times have you purchased (all products or services of this type) in the past 6 months (or some other period of time reflecting purchase frequency for product or service category)?
• How many times have you purchased (this product or service) from (our company) in the past 6 months?
• How many others have you told about your experience (with this product or service) in the past 6 months?
• How many of those that you have told in the past 6 months have, to your knowledge, also purchased (the product or service)?
• How many times have you offered constructive criticism or suggestions for product or service improvements over the past 6 months?

To this list can be added:

• How likely are you to repurchase if the price increases 10%?
• How likely are you to repurchase if a like competitor has a price that is 10% lower?
• How vital is the competitive advantage this product provides?
• What percentage of your spending on this product category is spent with us?
• When shopping for this product category, how often do you purchase from us instead of from other brands?
• How likely are you to continue purchasing the same products/services from us?
• How likely are you to purchase different products/services from us?
• How likely are you to increase the frequency of purchasing from us?
• How likely are you to switch to a different provider?
• How reluctant are you to switch your business to a competitor?

You should measure the questions that you can link to business outcomes. This takes time and experimentation to find out what works best for your organization. Settling on one question prematurely because it works for others in a few industries is the wrong approach. For you, one set of questions might work better for one product line than another, which might need a completely different set of loyalty questions.

Here are some sets of loyalty questions you should test:

• Forrester Loyalty Metrics
• Advocacy Loyalty Index & Purchasing Loyalty Index
• TNS Customer Loyalty Index
• Affective Commitment Index & Calculative Commitment Index

Survey Compensation for Employees Gone Awry

I'm adamantly against financial compensation for staff based on customer-service survey results. Invariably, it leads to customer-service agents gaming the system; this happens far more than executives are willing to acknowledge. For instance, a K-mart cashier posted a sign at the register saying, "For a chance to win a $2,500 gift card, log onto KmartFeedback.com and rate our customer service 9 or 10. Thanks for shopping at your 1 Penn Plaza Kmart!" Of course, people have a chance to win no matter what rating they give.

(photo: bcurrie)

A post on this example at The Consumerist led to a rash of comments giving examples for other major brands:

• CVS - "Yesterday I went to CVS for a prescription. When I checked out, the cashier looked at my receipt and stated that I had been selected to participate in a survey. Yeah, yeah, yeah, I know - this happens all the time, but she then showed me a mini candy bar and said, ‘you get a free Take5 candy bar so that will remind you to give us all 5's on the survey!' I thought it was pretty smart but I still didn't do the survey..."
• Enterprise - "I was asked to rate an Enterprise rental by the customer rep, on a scale of 1-10 (or whatever it was). I said 9 because I figure one should save 10 for over-the-top service; this particular rental went smoothly, but was nothing special. He kept after me, wanting to know what was wrong, why I didn't give them a 10, until I got the point that to them ‘10' means ‘normal service'."
• Home Depot - "The Home Depots around me [hand you a flyer] telling you the almost exact same thing."
• Nissan - "This reminds me of whenever I buy a car. The Nissan salesperson reminds me that I will receive a survey in the mail, and that I'm supposed to return that survey with all 5's (the best possible mark), or else their dealership will be dinged or knocked down some points or whatever. I don't generally return surveys anyway, and I certainly don't when someone tells me what my answers should be anyway."
• Old Navy - "An Old Navy store stapled a piece of paper to my receipt with a similar suggestion - something like ‘rate us a 10 and get 10% off'. Of course you get 10% off for filling out the survey no matter what, so I filled out the survey honestly, with perhaps a slight negative influence from the suggestion."
• Sears - "Did the same thing when I worked at Sears but it said all 10s and we were told to tell them all 10s or we'd fail. It would be nice if they used the surveys to better themselves."
• Target - "I have had plenty of cashiers at Target say that sort of thing too."
• Toyota - "A Toyota dealer actually told me to bring in the survey so we could 'fill it out together'. In exchange - he would fill my gas tank."

My recommendations:

• Don't financially incentivize any staff based on survey results. Doing so will change the results, no matter how strong your corporate culture is (for instance, Enterprise would discipline the representative mentioned above). Compensating only managers will lead to managers asking representatives to ask for higher scores. The most important thing is to gather authentic feedback about current satisfaction.
• Don't use survey results as a crutch for measuring employees. It's vital that you share rich, relevant feedback with agents so that they can serve customers better in the future. Their managers need to mentor them not overmeasure them. (See Employee-Customer Engagement Best Practices.)
• Don't use the Net Promoter Score as a transactional measure. From these and other anecdotes, it is clear that the NPS in customer-service settings leads to a collapse in the range and validity of the scale and an obsession with the top score, even for organizations like Enterprise that try to counterbalance this.
• Don't use numbers. They are arbitrary; in some pure mathematical realm they are better for averaging than the results of fully labeled scales but the lower interrater reliability of numeric scales negates that. What an 8 means on a 10-point scale varies from respondent to respondent. Use labels, as in these common rating scales, and make the highest labeled point hard to achieve: Not at all satisfied, Slightly satisfied, Moderately satisfied, Very satisfied, Completely satisfied.

Do you have any examples of being asked to provide artificially high ratings to surveys?

Vovici Forms Foundation of Oracle Voice of the Customer Program

Jeremy Whyte, director of customer feedback and reporting with Oracle Corporation, presented details of Oracle's extensive Voice of the Customer research program to the American Marketing Association in a research webinar on October 20.  Surveys form the foundation of Oracle's Voice of the Customer program: listening to customer input through Vovici surveys provides "comprehensive feedback across the Oracle ecosystem and customer ownership lifecycle". Oracle conducts hundreds of surveys, grouped into relationship surveys, transactional surveys and targeted surveys.

• Relationship surveys with customers, partners and employees are the most strategic surveys, highlighting customer experience and loyalty drivers across cumulative contacts. Why survey employees in a Voice of the Customer program? Because Oracle has identified a correlation between employee satisfaction and customer satisfaction and prioritizes investments to improve employee satisfaction based on how that will drive increased customer loyalty.
• Transactional surveys measure the quality of each service response by organization. Short term these surveys trigger immediate action on a customer-by-customer basis, and long term these drive operational improvements to improve service quality. Transactional surveys are conducted for technical support, customer service, consulting services, education services, sales win/losses, implementations and even M&A impact on customers.
• Targeted surveys are used primarily for qualitative research to supplement relationship and transactional surveys. Sample applications include competitive intelligence, product and service planning, marketing, referencing, user group satisfaction and general market research.

All of these survey results are combined with operational measures and financial outcomes in a customer satisfaction linkage analysis.  As a foundational platform, taken together these surveys empower Oracle's wider Voice of the Customer program, which reaches beyond surveys for other additional types of feedback.

How effective has this been? Oracle has improved customer satisfaction each fiscal year for five years running and its customers now demonstrate the greatest propensity to recommend that they ever have. If you talk to a large Oracle client, you will hear firsthand how they have seen Oracle adapt and improve to serve them better. To achieve similar results for your own organization, make surveys the foundation of your efforts.

Insights from the Gartner CRM Summit

This year's North American Gartner CRM Summit highlighted important changes in technology and innovation, many driven by the rise of social media and social networks.

If you divide the CRM market into Operational CRM, Analytical CRM and Social CRM, as Gartner does, then Social CRM has the smallest share of current spending (10%) but the highest share of growth in spending (60%). In fact, Gartner analyst Michael Maoz said that "Networks matter more to your success than any other initiative."

When Jim Davies gave his "State of EFM" address, he too emphasized the rise in social technologies, emphasizing the integration of social feedback within enterprise feedback management, noting that market-research online communities are now a part of many EFM platforms, including Vovici. For Jim, the leaders of the EFM market remain Vovici and Confirmit, and he expects continued consolidation in the industry (Vovici has purchased three companies: Perseus, WebSurveyor and Surveyo, as well as Raosoft web-survey assets).

Not all social technologies encourage innovation, though: research director Gareth Herschel reported that Gartner clients had seen marginal-to-no ROI from investments in blog content analysis, and Gartner instead advocates that its customers learn the language of the Voice of the Customer by asking more open-ended questions in surveys and then text mining the responses. As you innovate, you need to monitor your progress, and Herschel emphasized the need to select 5-9 key performance indicators from the hundreds of performance indicators your organization follows. In a separate presentation, Herschel said that organizations need to engage in meta-analysis, analyzing their analysis process, to make sure that they improve the quality of decisions that they make in the future.

Kathy Harris, a Gartner distinguished analyst, provided a good summary of the conference. She asserted that "CRM is the most fruitful innovation opportunity for your company and your customers"; make sure to use EFM (which Gartner sees as a subset of CRM) as you "embrace your customers in co-creation."

Social Media Market Research: A Study of the Tropicana Repackaging

At the 2009 MRA First Outlook Conference, Owen Shapiro of LJS Associates and Tom Malkin of GeeYee, Inc. presented "The Impact of Social Media on Market Research". In order to better understand the strengths and weaknesses of social media research, LJS conducted phone and social media research into the Tropicana unrepackaging incident.

Earlier this year, Tropicana rolled out repackaging that many shoppers complained looked like a generic brand and made the product much harder to find on store shelves. The resulting pushback led to Tropicana to revert to its earlier packaging.

To study this, LJS surveyed 1,000 U.S. consumers by phone and online and then weighted the results to be demographically representative. Fully 20% of consumers surveyed had noticed the new Tropicana packaging; of these, 32% liked the packaging, 32% were neutral and 27% were negative. Only 1% of consumers had posted online about the packaging.

For social media research, GeeYee scraped 1,900 posts from over one million web pages analyzed; each post typically covered three or four topics. Here is the categorization of the most frequently mentioned topics:

• Price - Primarily discussions of coupons and sales
• Premium OJ - Discussions of comparatively higher cost
• Ingredients - For instance, the shift to Brazilian rather than Florida oranges
• Confusion in store - Fully 34% of posters discussed not being able to find the product in stores
• New package design - Discussions of this accelerated once the packaging was withdrawn
• Reversion to "classic" packaging - Posters commented about Tropicana's announcement or upon seeing the old packaging restored

Comparing surveys to social media is like comparing apples to orange juice (sorry):

• Social media's impact is disproportionate to the level of activity. The multiplier effect for each posting produces an impact often missed by traditional marketing metrics. Lost in a typical survey is how vocal those who disagree might end up becoming.
• The data is dirty. When it comes to social media, you can't distinguish between grassroots and "Astroturf" (sponsored marketing campaigns design to mimic grassroots efforts), between legitimate blogs and "splogs" (spam blogs), between memes being relayed because they resonate or because they reciprocate (blog-post exchanges).
• Brands with unique names are easier to research. It is easier to extract quotes about the iPhone than Coach. Researching Tropicana required removing references to the Tropicana casinos in Las Vegas and Atlantic City, a level of cleaning not needed in coding verbatim survey responses.
• Topics are not always organized to answer our questions. Since posters can discuss anything, you need to develop a much broader coding sheet than for open-ended survey questions, which are tightly focused. Sometimes social media may not be talking about your question at all.
• Social media is not representative, only directional. You can try to quantify it to better understand the direction but it will still be qualitative.

Owen concluded that social media is best used early in the market research process: to develop hypotheses to test with surveys or to use up front as a qualitative tool to more fully understand issues and to see what you might have overlooked.

General Mills Moving Qualitative Research Online

Ned Winsborough, manager of consumer networks at General Mills, presented "Accelerating Innovation with Social Networks" at the MRA First Outlook Conference. "We have a mandate at General Mills to move as much of our qualitative research online as possible in the coming months and years. We have been experimenting with this for a year, but we created our consumer networks team this summer and are now scaling it." (Consumer networks is the term that General Mills uses for MROCs.)

General Mills has done 22 community projects since last spring. Why online communities? "Online consumer communities meet the needs of consumers, brand teams and agencies with busy lives. They allow you to innovate with consumers better, faster, and cheaper." With communities, General Mills is able to engage in iterative building of concepts: "We listen, we build; we listen, we tweak. This can be done very quickly, with a lot of flexibility to the method." Community research allows for faster speed to market. For one project, General Mills did six months of work in six weeks. Compared to other qualitative methods, communities are less expensive. "There is a fixed cost for setting up the communities, which can be very significant, but the incremental cost of doing extra weeks, extra moderation, is very low."

As a result of General Mills' 22 projects, they have made changes to their approach to community research:

• Focus on Discovery - The General Mills innovation model uses three steps: Discover, Build, Launch. The communities are great for Discovery but less suited for the Build phase. In the Discovery phase, community research always works, according to Ned, whether the project is big or small, whether the tolerance for risk is high or low. In the Build phase, small projects can be supported with community research but larger projects require traditional quantitative research. For future community research, "we are focusing on Discovery."
• Smaller Communities - Early communities were larger (for example, 225 participants), but that produced too much information to quickly and easily analyze. "Now we work with communities of 30 to 50 people (more if we have subgroups we want to investigate). With fewer members, we really get to know them as individuals, and we can probe better."
• Shorter Duration Communities - General Mills has moved from a permanent online community to project-based communities that last for six to eight weeks. "This is a different model than creating one ongoing community. We have some experience with that type of community: we had done that in the past but found it wasn't cost effective." The ongoing moderation activities can be significant, yet "it is rare that we have things that we need to do every week."
• Larger Incentives - Members to an early community were offered $50 for six weeks participation and a chance to win some modest prizes. Current incentives tend to run $40-50 per week.
• Geographically Centered - For one of its first project communities, General Mills invited seven local participants to come to their facility for shelf tests and project packaging tests. Now, General Mills "uses focus group facilities to recruit members, so that we can do selective face to face research."

Ned has heard everything from "traditional research is dead" to skepticism about the value of online community research. "The truth is in the middle," he said. "It has a place, and we need to approach it like any other new technology. What questions can it answer? What objectives can it meet? What objectives can't it meet? Where can it fit in an array of methods? It certainly doesn't obsolete core quantitative methods but it has powerful potential to transform qualitative research as we know it."