In addition, Brooks (2000) found that according to the sector analyzed, between 40% and 80% of customer satisfaction and loyalty was due to a customer’s relationship with a company’s employees. Vilares and Cohelo (2000) also found that perceived employee satisfaction has an important impact on the perceived value of the products which is directly linked to customer satisfaction.
The relationship between employee and customer satisfaction is directly reflected in Alva’s reputation analysis. As analysed for the three-month period ending January 2011, a change in employee sentiment towards utilities (Alva: Corporate Culture reputation driver) is positively correlated with customer satisfaction (Alva: Products and Services Execution reputation driver) and also shareholder value (Alva: Financial Performance reputation driver).
Specifically, a 0.29% improvement in the average Corporate Culture score for December was accompanied by a 1.92% and 1.62% increase in Products and Services Execution and Financial Performance score respectively. The positivity of the relationship was further confirmed in January by a -0.59% decrease in average Corporate Culture score accompanied by a -1.30% decrease in average Products and Services Execution score and -0.58% decrease in Financial Performance score.
A recent customer satisfaction survey by Which.co.uk revealed that smaller providers (defined as having approximately 2% market share) perform much better than the UK’s ‘Big Six’ when it comes to customer service. Ovo and Utility Warehouse topped the Which? ranking with a 77% overall customer satisfaction score followed by Ebico 72%, SSE 56%, E.ON 49%, ScottishPower 46%, British Gas 45%, First Utility 43%, EDF 40% and npower with a score of 34%.
It would be interesting to understand to what extent these customer satisfaction scores mirror employee satisfaction scores and indeed whether the rankings are similar. Our own findings indicate that there will be a strong correlation between the two.
Ensuring a strong corporate culture in the workplace will lead to motivated employees that engage positively with existing and potential customers, leading to strong client retention, improved reputation and financial performance.
Alva’s methodology
Alva calculates its reputation scores on a 1 to 10 fractional value basis, which represents the perception of various stakeholders and market segments at any given point in time. The scores are based on the daily analysis of over half a million news and financial announcements, trading and analyst reports and social media comments.
— By Nicholas Chrysanthou, Energy Consultant Analyst at Alva
