Customer loyalty, employee engagement – and everything in between

Although the business landscape is constantly shifting and changing, the core needs and goals of organisations in any sector remain the same.

Employee engagement, for instance, is always a hot topic among HR and management circles, with endless research being conducted in this area. From a customer relationship point of view, consumer engagement and loyalty are issues that can keep many a marketing executive up at night.

Until now, companies have tended to rely on separate areas of their business to tackle these and similar issues – for instance, customer loyalty was strictly in the domain of the marketing team. But is there value in seeking intersects and overlaps between these areas, and taking a collaborative approach to addressing them?

Dr Tomas Chamorro-Premuzic, a distinguished professor and vice president of research and innovation at Hogan, says that the lines are getting blurred and it’s important to understand the implications.

The customer and employee are now one

Dr Chamorro-Premuzic, who has led extensive research in the area of consumer behaviour, believes that customer loyalty and employee engagement can no longer be considered separate issues. In fact, they are interlinked concepts that can radically change the way businesses are run.

“Over the past 10 years or so, we have seen a growing overlap between marketing and human resources,” he explains.

“I think this is very positive and can be summarised by saying that most companies will do very well if they try to hire the most faithful customers.”

He says that the more a company understands who its customers really are, and the more it can identify the people who love the brand, the more potential it opens up to hire great employees.

“If your customers love your brand, they will also love working for you. The companies that are really successful – like Facebook, Google and Apple – have managed a really high level of alignment between the culture and the reputation of the brand,” he says.

“The same consumers who love their products and services would probably also love to work for them.”

According to Dr Chamorro-Premuzic, this insight could pave the way for new recruitment and selection strategies in the future. As the marketing departments in big companies have a range of social media strategies and platforms to play with, this opens up opportunities to apply some of the methods that have traditionally been used in HR to consumer segmentation.

“You can use them social platforms to not only post job vacancies, but also to hire from them – by observing customer behaviours such as who is spreading positive word of mouth. And with millions of users, this is not a bad place to start looking.”

Personality and motivation

It’s true that the research areas of customer loyalty and employee engagement have developed somewhat independently. HR and employee segmentation, for instance, is a lot more established and mature, while marketing and consumer segmentation only really gained attention in the 60s and 70s thanks to the rise of psychographic tools.

However, Dr Chamorro-Premuzic explains that one of the fundamental building blocks of human psychology – motivation – is the glue that binds these two ostensibly disparate notions.

“There is point of interface between these two fields which has to do with people’s values – what is it that makes them happy, what is it that they chase and what motivates them?” he says.

For example, some people are more driven by commercial or financial reward, while others are more geared towards status. These differences affect not only what their preferred brands, products and services are, but also how they are motivated at work.

Those spurred on by money will respond more favourably to a salary raise, for instance, while those driven by the promise status and recognition will respond to being awarded a fancy job title.

Consequently, it can be safe to assume that the latter group is also more likely to have a penchant for luxury brands and items when shopping. This suggests that the same models and methods can be used for employee and customer segmentation, although they may seem like radically different fields.

“The big opportunity here is to get marketing people to pay attention to HR, which traditionally they wouldn’t have, and also get HR people to pay attention to branding and marketing,” explains Dr Chamorro-Premuzic.

Personality and recruitment

In light of the increasing confluence between customer and employee engagement, which is driven by intrinsic motivations, it’s essential to consider the importance of measuring candidates’ personalities when recruiting for your organisation. According to Dr Chamorro-Premuzic, the numbers speak for themselves.

“Measuring personality is very important, and the ROI has been demonstrated – weighing up how much they cost versus how much better will your choice of candidates be,” he says.

“What people need to understand is that this might not be rocket science and you won’t get it right 100 per cent of the time, but as a methodology, it’s much better than the alternatives, which people tend to trust a lot more.”

He explained that personality assessments are a much better gauge of candidate potential than other measures such as interviews and recommendations, and the only reason they haven’t really taken off yet is because of underlying distrust among the public.

“The alternatives tend to be worse and there’s so much scientific evidence that compellingly shows that these tests should be used. The key question is why we choose to disregard this evidence, and one of the main answers is that there are so many unreliable or unscientific tests that give these a bad reputation.”

With more and more organisations recognising the value these assessments bring, however, it surely won’t be long before they become a mainstream, recruitment and selection tool.