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Linking employee opinions, customer reactions, and financial performance: Actions increase profits by $4M
A retail organization employing more than 16,000 employees and operating over 800 stores was challenged to boost profit delivered to its international parent company. To support this objective, Gantz Wiley Research developed a statistically-based economic model that linked the performance climate as reported by employees, how customers reacted, and the dollar implications of that customer reaction.
Through survey research, Gantz Wiley Research built a database covering three years of the retailer’s sales, customer survey, and employee survey data. Using the principles of the High Performance Model (1.2), we determined the customer measures most critical to increasing store sales and profit: the customers’ evaluation of the sales associates’ abilities to communicate and serve. Then, we developed a specialized Performance Excellence Index built upon the employee opinions most related to those customer reactions. In other words, we had determined the facets of customer satisfaction most pivotal for driving financial performance, and in turn, the specific facets of the work climate that tended to promote those facets of customer satisfaction.
Using the power of longitudinal analyses and leveraging the rich database, Gantz Wiley Research further quantified these relationships within an economic model. In fact, a six percentage point increase in the employee survey-based Performance Excellence Index drove a one percentage point improvement in the customers’ ratings sales associate service and communication abilities. This one point increase in customer rating drove half a percent increase in store profits. Multiplied over the size of the retail chain, this translated into an increase of over $4 million.
This research project pinpointed the elements of the sales associate and customer relationships most important for driving in profit. Not only did this help to structure the retailer’s human resources and marketing agendas, but it created and validated corresponding metrics to track within a balanced scorecard framework.
This client has since grown at a phenomenal rate, acquiring several more national and international retail brands, and implementing similar strategic tracking systems within each organization.
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Our clients
Gantz Wiley Research has worked with leading organizations across the globe. View our select client list.
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