Examining the Happiness of Mothers on their Day

First of all, Happy Mother’s Day to all of the mothers that read my blog. Given the day, I decided to examine our consumer research to find out if mothers are, in fact, happy. My previous analysis already shows that females are happier than males. But what about if they are mothers or not? I examined happiness levels of more than 5,000 U.S. females based on their family situation.

As you can see in the chart below, married moms are by far the happiest females.

The bottom line: Happy Mother’s Day!!!

Examining the Demographics of Happiness

I read an interesting article this week by Adam Davidson in the New York Times called Money Changes Everything. It’s one of the growing number of articles raising the discussion about happiness. I’ve blogged a bit about happiness and decided to dive into our latest dataset of responses from 10,000 U.S. consumers and examine the demographics of happiness. Here’s what that analysis uncovered:

• 74.4% of U.S. consumers agree that they are typically happy
• Females are happier than males
• African-Americans are the most happy and Caucasians are the least
• People who live in the South are the most happy and those who live in the Northeast are the least
• Happiness increases with annual income, up to about $100,000. Additionally, consumers who make less than $25,000 are considerably less happy than other consumers.
• Consumers older than 65 are the most happy and those between 45 and 54 are the least

The bottom line: What can we do to raise all of these numbers?

Happiness Is Key Ingredient To Productivity

I want to leave you with a happy thought for the weekend. As you can see in the chart below, happy people tend to be more productive in work.

My take: First of all, it’s important to have happy employees. So make sure that you are screening out unhappy people during the recruiting and hiring process. Also, design your company environment and operations to encourage employees to be happy. It might make sense for the executive team to discuss employee happiness on a regular basis.

Psychologist Shawn Achor, in his TED Talk: The Happy Secret to Better Work, describes that happiness is what leads to success at work, although we often think about it working in the other direction. So it might make sense to follow his advice for creating your own personal happiness:

• For 21 days, write down thee things you are grateful for
• Journaling one positive experience per day
• Exercise
• Meditation
• Random acts of kindness, write one positive email praising or thanking somebody in their social support network.

The bottom line: I hope that you have a happy weekend, you deserve it!

Female Sports Enthusiasts are the Happiest

In recent posts I explored the demographics of sports enthusiasts and the demographics of happiness. So why not  look at those two topics together? I dug into our U.S. consumer benchmark and examined the happiness of males and females who enjoy watching sports. As we know from the previous analysis, females are happier than males. But this analysis also shows that:

• Females who enjoy golf are the happiest consumers.
• The happiest males are those who enjoy golf, soccer, or tennis.
• Consumers who enjoy sports are much happier than those who don’t.
• The largest female-male happiness gap occurs with consumers who don’t enjoy sports. When it comes to sports enthusiasts, the largest gap is with golf, basketball, and football.

The bottom line: Sports enthusiasts are happier people

Interesting CX Data Tidbits From 2012

As you’ve probably noticed, our research is full of rich data from companies and consumers. So I looked through my posts from this year and extracted a number of datapoints that you might find interesting…

Value/ROI of Customer Experience:

Consumers are almost 7x more likely to follow advice from a health plan after having satisfactory interactions.

Compared with NPS detractors, promoters are more than 2x as likely to recommend retailers airlines, more than 3x as likely to recommend insurers and health pans, and 4x as likely to recommend banks

Consumers that are satisfied with customer service interactions are more than 4x as likely to repurchase than those who are dissatisfied.

The correlation between CX and NPS for tech vendors is 0.77, which is higher than the correlation between product satisfaction and NPS.

A modest increase in customer experience can result in a gain over three years of up to $382 million for US companies and up to £263 million for UK firms.

When companies responded very poorly after a bad experience, 47% of consumers stopped spending completely with the company. When they had a very good response, only 6% stopped spending and 37% increased their spending.

Elements of CX Leadership:

Companies with strong CX metrics programs are 5x as likely to be CX leaders compared with those who have weaker CX metrics programs

Customer-centric culture is a key goal for 77% of CX leaders and only 34% of other firms

46% of VoC programs are in the two earliest stages of VoC maturity

HR professionals are more than 2.5x as likely as CX pros to say that HR provides considerable help for CX efforts.

75% of HR professionals view employee engagement as very important and 61% believe they are doing a good job in this area.

72% of companies think predictive analytics and open-ended verbatims will become more important sources of customer insight, compared with only 30% who view that way about multiple choice survey questions.

Only 28% pf VoC programs have reached the top two stages of VoC maturity.

Making the company’s culture more customer-centric is more than 2x as important for CX leaders than for CX laggards.

35% of large companies are in the lowest stage of CX maturity.

74% of companies think that customer experience design is important, but only 35% believe that they are good at it.

CX leaders have more than a 16 percentage point advantage over CX laggards in consumers’ willingness to buy more, their reluctance to switch business away, and their likelihood to recommend.

The companies that are good or excellent at customer experience has increased from 16% in 2011 to 19% in 2012.

46% of companies plan to increase spending on CX in 2012 compared with only 8% that expect to decrease spending, and text analytics is the area with the most spending momentum

40% of U.S. employees at companies with 1,000+ employees are moderately or highly engaged compared with 59% at companies with 10 or fewer employees.

Highly engaged employees are 5.8x more committed to helping their companies succeed and 4.7x more likely to recommend that someone apply for a job at their company.

Companies with good customer experience have 2.5x more engaged employees than companies with poor customer experience.

The CX Profession:

28% of large companies have 20+ employees focused on CX

There are 87,000 CX professionals in the U.S. and almost 14,000 in Canada.

99% of CX professionals think that customer experience is a great profession to be in and 89% are satisfied with their current position, but only 63% are happy with their opportunities for advancement

Social Media Adoption:

Consumers are more than 50% more likely to use social media like Facebook and Twitter when purchasing cell phones than they are for selecting health plans

A quarter of consumers read or update Facebook several times per day and more than half of consumers younger than 45 use Facebook daily.

77% of U.S. consumers use Facebook daily, 13% use Twitter daily, and 5% use LinkedIn daily.

Consumers who earn $100K or more are 2.5X as likely to tweet about a bad experience, compared with those who earn less than $50K.

General Consumer Behavior:

52% of U.S. consumers prefer good service over low prices for banks and computers, but only 25% prefer good service for rental cars and groceries.

Healthy people are more than twice as likely to be happy than unhealthy people.

89% of healthy people are happy, Happy people but only 41% of unhealthy people

Apple Mac users are wealthier, younger, and enjoy watching soccer more than Dell and HP users

Happy people are 50% more likely than unhappy people to do something that’s good for their company, but unexpected of them

31% of U.S. consumers use mobile apps daily.

U.S. consumers go on the Internet 5.9 hours per day and watch TV 3.9 hours per day.

African-Americans are the most avid fans of football (67%), Hispanics are the most avid fans of baseball (38%), Caucasians are the most avid fans of NASCAR (20%), and Asians are the most avid fans of golf (18%).

Web self service is the preferred channel for checking a balance (60%) and updating an address (51%), while talking on the phone is the favorite for investigating a mistaken bill (58%) and resolving a technical issue (46%).

The bottom line: The numbers show a lot of CX work ahead of us

Healthy + Wealthy = Happy

In my final (at least for now) post about happiness, I am examining the link between healthiness, financial security and happiness. We asked 10,000 U.S. consumers if they agreed with these statements:

• I am typically happy
• I am financially secure
• I am healthy

I then examined which groups of consumers are the happiest.

Here’s what we found:

• Financially secure people are the happiest (92% are happy)
• Healthiness has a larger impact on happiness than financial security; happy people are more than twice as likely as unhealthy people to be happy .
• People that are neutral on financial security and healthiness are only a little happier than unhealthy and financially insecure people.

The bottom line: I hope that you are healthy and financial secure!

Hilton, Westin, and Lexus Have the Happiest Customers

In my previous two posts, I examined the link between happiness and loyalty and exposed happiness levels by consumer segments. Now I want to look at which companies have the most (and least) happy people as customers. We did not ask if the people were happy with the company, just if they were happy in general. The companies probably have little influence on the overall happiness of their customers, but there is still a gap across companies.

I examined 249 companies that had at least 100 consumer responses and identified the average “net happiness” ratings for their customers. The “net happiness” is the percentage of people who agree that they are typically happy minus the percentage that disagee with that assessment. The overall “net happiness” for the U.S. is 66% (74% are happy and 8% are unhappy).

Here’s what we found:

• Hilton, Westin, Lexus, Alamo, Hertz, and Courtyard By Marriott have the happiest customers
• Medicaid, TracFone, Virgin Mobile, 21st Century and EarthLink have the least happy customers
• The “net happiness” scores range from 56% to 82%

My take: Since our previous analysis shows that wealthier people are more happy, we’d expect companies that serve wealthier consumers to have higher happiness ratings. So it’s no surprise that there are a number of upscale brands at the top and Medicaid at the bottom. But what does this mean for a company?

Since happy people are more loyal, the companies that attract happier customers will have a disproportionate advantage in building loyalty. Also, I would imagine that it will tend to be more pleasant to work as a front-line employee at companies that serve happier customers.

The bottom line: I’d rather work in the front-lines for Hilton and Westin than for Medicaid

Women And Wealthy Are Happiest

In the previous post, I showed the link between happiness and loyalty. Now it’s time to look at which consumers are the happiest. So let’s start by examining happiness across the entire U.S. population, where we find that 74% of people are typically happy.

But the level of happiness is quite different across consumer groups. To begin with, I examined the differences across age and gender. The data shows that women are happier than men in every age group except for the oldest Americans and that people 65 and older are the happiest.

Do you know the old saying that money can’t buy happiness? Well, it might be wrong. We examined the level of happiness based on age and income levels. It turns out that consumers with higher incomes are happier across all age groups. The largest income-happiness gap is with 55 to 64 year-olds. The oldest and youngest consumers have the smallest gap.

In my next post, I’ll examine which companies have the most (and least) happy people as customers.

The bottom line: Women, wealthy, and elderly are happiest people.

Happy People Are More Loyal Customers

I’ve been following the research on happiness for several years, because I think it has a strong link to customer experience. The theory is that happy people tend to be more loyal customers and more engaged employees.

So I took a look at our consumer data to see if there’s a quantifiable link to loyalty (look for the same type of analysis around employee engagement later this year). My analysis looked at the likelihood of consumers to recommend companies across 18 industries based on whether or not they agreed with the statement “I am typically happy.” Please note that we were not asking consumers if they were happy or unhappy with a company.

It turns out that happy people are more likely to recommend companies across all 18 industries. The largest gap between happy and unhappy recommenders is in rental cars, where happy people are more than twice as likely to recommend. Even the smallest gap, 11 percentage points for retailers and parcel delivery services, is still substantial.

In my next post, I’ll examine which consumers are happy.

The bottom line: Happy people are more loyal customers

Examining Apple Stores And Employee Engagement

In our Employee Engagement Benchmark Study, we found a high correlation between good customer experience and high levels of engaged employees. But many companies don’t understand this connection, which is why we’ve identified “Ignoring Employees” as one of the 10 CX mistakes to avoid.

Apple, however, seems to be avoiding this mistake. Customers tend to love their experiences with engaged employees in Apple stores. That’s why I thoroughly enjoyed this article in the New York Times a few weeks ago: Apple’s Retail Army, Long on Loyalty but Short on Pay. It provides great insight into Apple’s retail model.

So I decided to dissect the article and reconfigure parts of it into some key lessons…

Apple stores are sales machines. There’s no questioning the success of Apple’s retail efforts.

Last year, the company’s 327 global stores took in more money per square foot than any other United States retailer — wireless or otherwise — and almost double that of Tiffany, which was No. 2 on the list, according to the research firm RetailSails. Worldwide, its stores sold $16 billion in merchandise. Divide revenue by total number of employees and you find that last year, each Apple store employee — that includes non-sales staff like technicians and people stocking shelves — brought in $473,000. Electronics and appliance stores typically post $206,000 in revenue per employee, according to the latest figures from the National Retail Federation.

The brand is built on an army of hourly workers. Apple’s brand may be drawn-up and envisioned in Cupertino, but it comes to life through 10′s of thousands of relatively low-paid 20-year-olds. This phenomena is true for many companies. (see CX Law #4: Unengaged employees don’t create engaged customers.)

About 30,000 of the 43,000 Apple employees in this country work in Apple Stores, as members of the service economy, and many of them earn about $25,000 a year.  By the standards of retailing, Apple offers above average pay — well above the minimum wage of $7.25 and better than the Gap, though slightly less than Lululemon, the yoga and athletic apparel chain, where sales staff earn about $12 an hour. The company also offers very good benefits for a retailer, including health care, 401(k)contributions and the chance to buy company stock, as well as Apple products, at a discount. But Cory Moll, a salesman in the San Francisco flagship store and a vocal labor activist, said that on Tuesday he was given a raise of $2.82 an hour, to $17.31, an increase of 19.5 percent and a big jump compared with the 49-cent raise he was given last year.

People seek out a higher purpose. Apple recruits people who love the Apple brand and provides them with a vision for their work that goes beyond selling products to “enriching people’s lives.” Companies need to identify this purpose and communicate it to employees.

But Apple’s success, it turns out, rests on a set of intangibles; foremost among them is a built-in fan base that ensures a steady supply of eager applicants and an employee culture that tries to turn every job into an exalted mission.“When you’re working for Apple you feel like you’re working for this greater good,” says a former salesman who asked for anonymity because he didn’t want to draw attention to himself. “That’s why they don’t have a revolution on their hands.”One manager said it was common for people offered jobs to burst into tears. But if the newly hired arrive as devotees, Apple’s training course, which can range from a few days to a few weeks, depending on the job and locale, turns them into disciples. The phrase that trainees hear time and again, which echoes once they arrive at the stores, is “enriching people’s lives.” The idea is to instill in employees the notion that they are doing something far grander than just selling or fixing products. If there is a secret to Apple’s sauce, this is it: the company ennobles employees.

Train for key customer moments. Apple examines the experience of customers and trains employees how to deal with these critical interactions. Companies need to understand interactions from the customer’s perspective. (see CX Law #1: Every interaction creates a personal reaction.)

Training commences with what is known as a “warm welcome.” As new employees enter the room, Apple managers and trainers give them a standing ovation. The clapping often bewilders the trainees, at least at first, but when the applause goes on for several lengthy minutes they eventually join in. There is more role-playing at Core training, as it’s known, this time with pointers on the elaborate etiquette of interacting with customers. One rule: ask for permission before touching anyone’s iPhone. “And we told trainees that the first thing they needed to do was acknowledge the problem, though don’t promise you can fix the problem,” said Shane Garcia, the one-time Chicago manager. “If you can, let them know that you have felt some of the emotions they are feeling. But you have to be careful because you don’t want to lie about that.”

Apple established an environment for good customer experience. You can’t just push people to deliver good customer experience, you need to  create an environment that encourages them to do so; people typically conform to their environment.  (see CX Law #5: Employees do what is measured, incented, and celebrated.)

At Apple, the decision not to offer commissions was made, Ms. Bruno said, before a store had opened. The idea was that such incentives would work against the company’s primary goals — finding customers the right products, rather than the most expensive ones, and establishing long-term rapport with the brand. Commissions, it was also thought, would foster employee competition, which would undermine camaraderie.

Sales and productivity goals are creeping in. Over time, every system tends to sway away from its initial design. While this may be appropriate, it often leads to competing metrics or to environments that encourage behavior that is inconsistent with the original brand goals.

He had already begun to sour on the job when in 2007, he said, his store began an attendance system whereby employees accumulated a point for every day they did not come to work; anyone with four points in a 90-day period was at risk of termination. “It was a perfectly good idea, but the thing that was terrible is that it didn’t matter why you couldn’t come to work,” Mr. Zarate said. “Even if you had a doctor document some medical condition, if you didn’t come to work, you got a point.”

To meet the growing demand for the technicians, several former employees said their stores imposed new rules limiting on-the-spot repairs to 15 minutes for a computer-related problem, and 10 minutes for Apple’s assortment of devices. If a solution took longer to find, which it frequently did, a pileup ensued and a scrum of customers would hover. It wasn’t unusual for a genius to help three customers at once. Because of the constant backlog, technicians often worked nonstop through their shift, instead of taking two allotted 15-minute breaks. In 2009, Matthew Bainer, a lawyer, filed a class action alleging that Apple was breaking California labor laws. Sales employees, Mr. Garcia and others noted, deal with stresses all their own. Though commissions are not offered, many managers keep close tabs on sales of warranties, known as Apple Care, and One to One, which is personal tutoring for a fee. Employees often had goals for “attachments” as these add-ons are called — 40 percent of certain products should include One to One, and 65 percent should include Apple Care.

Employee engagement requires an ongoing focus. Even companies that have string levels of employee engagement, like Apple, can’t rest on their laurels. It’s critical to track employee engagement and to respond immediately whenever it starts to deteriorate.

Like many who spoke for this article, Shane Garcia, the former Chicago manager, talked about Apple with a bittersweet mix of admiration and sadness. When he joined the company in 2007, he considered it a place, as he said, that “wanted you to be the best you could be in life, not just in sales.” Three years later, his work life seemed tense and thankless. He had little expectation that upper management would praise or even notice his efforts. In recent years, the level of unhappiness at some stores was captured by an employee satisfaction survey known in the company as NetPromoter for Our People. It’s a variation of a questionnaire that Apple has long given to customers, and the key question asks employees to rate, on a scale of one to 10, “How likely are you to recommend working at your Apple Retail Store to an interested friend or family member?” Anyone who offers a nine or 10 is considered a “promoter.” Anyone who offers a seven or below is considered a “detractor.” Kevin Timmer said the internal survey results last year at the Grand Rapids store were loaded with fives and sixes.

The bottom line: Don’t ignore employee engagement.

Insights About The Zappos Experience

When it comes to customer-centric culture, Zappos is one of the first companies that comes to mind. I still remember my interview with CEO Tony Hsieh from a few years ago, it’s an amazing story. So I am always interested in hearing what’s going on at Zappos, especially since it was acquired by Amazon.com.

I was recently approached to join the blog tour for Joseph Michelli’s new book, The Zappos Experience. Since Joseph has done some nice work in the past, including writing about The Starbucks Experience, I decided to participate.

Actually, that’s only part of the reason. I also did it because Joseph is a good guy and he agreed to answer some questions for my blog readers. So, here’s my Q&A with Joseph:

What are the most effective things that Zappos does to…

…keep employees engaged with the company’s mission?
Michelli: ”From the onset, Zappos socializes applicants so they understand they will be responsible for “defending and growing the Zappos culture.” Leadership at Zappos has culled 10 core values that are the foundation for all decisions made by the company. From orientation forward, employees are involved in projects to make the core values at Zappos more prominent. In the book, I offer an example of one of the new hire group projects called “you got faced.” In order to deliver the value “build a positive team and family spirit”, one group of new employees developed a mechanism for Zapponians to get to more easily get to know one another. Beyond initial onboarding projects, leaders demonstrate, talk about, and structure activities that enliven values like “be humble”, “create fun and a little weirdness,” and “do more with less.” Inexpensive, quick re-energizing, mini-play vacations in the middle of a work day (like Zappos parades, spontaneous karaoke, etc) are examples of living and stewarding a values based culture.”

…identify and respond to the needs of customers?
Michelli: “Zappos asks about, watches, infers, and tracks customer behavior and input. They are restlessly looking for scalable ways to make the customer experience quicker, easier, and more emotionally engaging. They are not content with satisfaction and as such strive to find “personal emotional connections” with customer that produce a “wow” reaction and that form the basis for customer loyalty and advocacy. At the individual level, staff are charged with and empowered to do what it takes (even if it means sending a customer to a competitor) to secure engagement as opposed to just a sale.”

…make sure that every interaction lives up to its brand promise?
Michelli: “Zappos leaders audit all their touch points with customers looking at them from the perspective of operational excellence and whether they deliver wowful happiness. Take a call to the Zappos call center for example. These calls answered by “customer loyalty team members” are reviewed by supervisors and evaluated for accuracy, rapport, and whether they connect and wow customers. In addition, customers are sent a post-call email that asks questions that get at whether customers were merely satisfied or truly “wow’d”"

How does the management team operate differently from management teams at other companies?
Michelli: “The management team is hard to distinguish from the non-management staff at Zappos. Tony Hsieh the CEO and multi-millionaire sits in a cubicle easily accessible to all employees and that spirit of humility and availability is pervasive. Leaders are required to spend time with their people outside of work, to foster a family spirit beyond the walls of the office. This type of leadership approach is not for everyone but it works for the environment Zappos is seeking to create. Leaders at Zappos also work with staff to develop a true “pipeline” plan that helps employees grow at Zappos and acquire the skills needed for viable succession planning and the creation of a sustainable culture of service excellence.”

What limitations are there, if any, for a large established company to adopt some of Zappos practices?
Michelli: “I think there are several major hurdles to overcome. The first of which is the “that will never work here” mindset. While the exact values that drive Zappos should not be imposed everywhere, the passion for values-driven culture is directly applicable across all settings. Moreover, many large established companies have so much hubris and legacy that they are unwilling to drive change. They have lost the entrepreneurial hunger of companies like Zappos or Apple. A visionary leader at an established company can accomplish the crisp break from competitors that Zappos enjoys if he/she creates a compelling vision, anchors to defining values, selects for culture fit, inspires people to grow and change, and challenges people for significance beyond success.”

What’s the weirdest thing you found while doing the research that is NOT IN THE BOOK?
Michelli: “I saw customers and business people coming for a free tour of Zappos in Las Vegas and being oddly giddy. It was almost like they realized a spiritual quest or they were having dinner with their favorite celebrity. The strength of Zappos customer bond built through online videos, twitter, live chat, phone support, and lightening fast delivery has almost created a cult following. I’ve often said their is a fine line between cult and culture and some of the tour goers demonstrate that the Zappos internal culture is forging a powerful connection externally.”

The bottom line: Zappos service is an extension of its culture

Some Interesting Blog Posts

I’ve decided to periodically highlight blog posts that I find interesting. Here are 10 from the past week:

• Flooring The Consumer: Brand & Customer Experience Blogs That Make Customers Sing highlights different brand and customer experience blogs that you should read every day between June 1st and July 4th. It’s a great listing of blogs for you to read. My blog is listed for June 15th; I’ll plan to have a good post that day.
• Customers Are Always: Deepak Chopra on Business, Success, and Happiness centers around a video with Deepak Chopra talking about leadership. He starts by saying that employee loyalty leads to customer loyalty which leads to investor loyalty. I totally agree. 
• Logic + Emotion: The One Video All Marketers Should Watch  showcases a video of a presentation by Adaptive Path that’s worth watching. It synthesizes thoughts contained in the book “Subject To Change.”
• Seth Godin’s Blog: Competition discusses why Seth doesn’t think that blogs compete with each other, so he’s happy to mention other blogs. Seems like a good message to highlight in this blog roundup. Seth, feel free to highlight my blog.  
• Forrester’s Interactive Marketing Blog: Brands Punk’d By Social Media provides more than 20 examples of companies that were blindsided by the Internet. The list starts with Apple in 2001 and ends with Louis Vuitton in 2008. 
• HubSpot Marketing Blog: Top 10 Ways NOT to Spend $12 Million on Marketing is a tongue in cheek look at how HubSpot could use the funding that it recently raised.
• Zenhabits: 25 Ways to Help a Fellow Human Being Today takes its inspiration from the Dalai Lama and provides what it calls ”an extremely incomplete list” of how you can start helping other people. We should all do a few items on the list.
• Freakonomics: Introducing: The Happiness Index discusses a new daily poll of Americans about their health and happiness. I can see using this data to decide which neighborhood to move into. Forget about the school system, how happy are the neighbors?
• GoogleBlog: Introduction to Google Search Quality discuses how Google ranks search results. It’s a fascinating post by Udi Manber who is the VP Engineering, Search Quality at Google.
• Brand New Day: An Expert’s Analysis of Dove’s Campaign for “Real” Beauty examines one of the photos that was used in Dove’s campaign. This BusinessWeek blog post contains a fascinating analysis of natural body imperfections that have disappeared from the photo.

The bottom line: Enjoy the reading! 

Joie de Vivre Engages Employees And Everyone Wins

I just read an interesting article in Monday’s Wall Street Journal called Hotelier Finds Happiness; Keeps Staff Checked In. It’s a story about how Joie de Vivre Hospitality improved the performance of its hotels by focusing on employees. Here’s the opening story…

Former management at the Hotel Carlton in San Francisco didn’t like to replace aging vacuums, despite staff complaints. After Joie de Vivre Hospitality Inc. took over operations in 2003, the new manager bought a vacuum for each of the 15 housekeepers — and replaces them every year.

This was just one example of how Hervé Blondel, the Hotel Carlton general manager, said he tried to treat workers as partners rather than employees. In addition, he did things like sitting in for front-desk workers on their lunch breaks and heeding staff suggestions to eliminate minibars, which generated little revenue at the midprice hotel.

My take: The founder and CEO of the firm, Chip Conley, definitely seems to understand the strong link between employee satisfaction and good customer experience. The article talks about a number of things that he does to engage employees like sponsoring parties and awards, arranging paid annual retreats for employees, hosting regular dinners with those who want to chat, and offering free classes on subjects from Microsoft Excel to English as a second language.

It looks like Joie de Vivre Hospitality is a great example of a key principle of Experience-Based Differentiation: “Treat customer experience as a competence, not a function.”

But that wasn’t what caught my eye the most in this article. What I really found amazing were the numbers that were quoted. Here’s what it said:

• Joie de Vivre’s turnover is 25% to 30% annually, about half of the industry average.
• Market Metrix estimates that each departure costs a midrange hotel about $5,000 in lost productivity, and recruiting and training a replacement
• Joie de Vivre has 2,500 employees. About 90% are hourly workers who take reservations, clean toilets and perform other low-status jobs.

So lets do some math with those numbers. Reducing the turnover from 50% to 25% for its 2,250 hourly workers means that the hotel chain has 562 fewer employees leaving each year. That saves the company more than $2.8 million each year. And that doesn’t even include any revenue from the likely uptick in loyalty and positive word-of-mouth. Wow! 

The bottom line: Engaging employees makes sense for customers and the bottom line!