Your first reaction when Wal-Mart CEO Doug McMillon announced pay raises was probably the belief that negative publicity forced Wal-Mart’s hands to make the changes. No one would argue that bad press could be a contributing factor. The wage increase would also better position them to compete with other retailers such as Target, TJ Maxx and Marshalls for qualified workers in a tightening labor market.
A closer look suggests their primary mission is to overcome disappointing sales results by growing sales through improved customer engagement and the overall customer experience. Changing compensation was one tactic within what McMillon called a “package of changes” that included training, onboarding of new employees, and work schedules. Training will include people leadership skills, teamwork, merchandising, retail fundamentals and communications. The plan can reduce turnover costs through improved employee retention.
Does customer engagement matter? Gallup’s John Fleming and Jim Asplund say yes in their book Human Sigma. They provide extensive research documenting the relationship of employee and customer engagement in benefitting an organization’s financial outcomes. They state that “companies whose products, processes and people deliver excellence at every customer touchpoint are less vulnerable in the marketplace” and “more resilient” during difficult economic times.
What’s the takeaway? I recommend the following business practices:
- Live customer engagement: make it a core value for your organization – not a program – but a way of behaving involving personal choice and ownership.
- When developing social media and digital channels, don’t overlook the continued importance of your employee’s customer service, sales and interpersonal skills in successfully engaging the customer.
- Ensure employees possess a depth of product knowledge. Your customers may have already done research online about your products and services. Don’t put yourself in a position jeopardizing customer confidence by knowing less than them.
- Measure customer quality assurance and satisfaction by providing customers with the opportunity to rate their experience with your products, interactions with your people, and when accessing customer service and support.
- Reinforce a culture where employees are neither territorial nor work in a silo- they know the organization’s structure, total picture and product processes to ensure knowledgeable referrals or to expedite problem resolution.
- Hire the right people and reward employees that value teamwork and demonstrate positive customer-centered relationships with each other.