Employees Are More Important Than Customers

Topics: Customer relationship management, Customer service, Marketing Pages: 16 (4475 words) Published: October 17, 2008

Regardless of one’s background, it is difficult to prioritise between employees and customers in the services arena. Both parties prove vitally important in the business operations of a service provider; however this document strives to explore both ends of the debate, that is, the overarching importance of employees and customers. Significant research has been conducted regarding the nature of the two groups, which has aided this critical analysis of the notion that employees are more important than customers as well as the counter-argument that employees are indeed more important.

Employees are more important than customers

The importance of employees extends far beyond the mere ability to meet the needs of a customer. As such, the view that employees are more important than customers is highly viable and supported. This importance can be firstly measured through the correlation between valauble employees and company profits. Furthermore, employees have an extensive influence on customers and their subsequent actions through their impact on word-of-mouth, service quality, loyalty and moments of truth; as well as the huge reductions in turnover associated with retention of superior employees.
Relationship between employees and profits

According to Frank, Finnegan and Taylor (2004) employees increase productivity, develop customer loyalty and ultimately enchance profitability. Although the actual revenue streams stem from customers, it is the actions of the employees that drive the continual and anticipated incremental rise of a company’s fiscal position. In a best case scenario, the extensive interaction between employees and customers will result in customer satisfaction, defined as a measure of how a firm’s service performance compares with a customer’s expectation (Zondiros, Konstantopolous, Tomaras; 2007). This satisfaction will lead to various other positive impacts for a firm and ultimately result in increased profitability.

European organisations are conceptualising the critical importance of employees and recognise that loyal, efficient employees have “an incredible and tangible impact on profitability” (Higgison. 2006). Former Scandinavian Airlines System CEO Jan Carlzon describes front-line employees as one of the most critical elements of a service experience. Not only did Carlzon explain that these boundary spanners impact customer satisfaction and retention, but also stressed the importance of employees towards company profits (Emery, Barker. 2007).

While frontline employees directly affect the financial performance of a company, a study by Northwestern University in the United States affirms that employees that do not have direct contact with customers still contribute to a firm’s profitability (Terzo. 2005).

Employees contribute to a wide range of service experience elements; including word of mouth, quality, satisfaction, loyalty, and critical incidents and moment of truth. Through the fulfilment of these areas, company’s can perform at reduced costs and display increased interaction both internally and with customers. This efficient disposition develops strong relational bonds and creates opportunities to cross-sell (Berry, 1995). It is therefore evident that the role employees play in any successful service encounter positively contributes to a company’s ability to generate a profit, reaffirming the notion that employees are more important than customers.

Employees influence on customers

Employees have a hugely significant influence on customers and will ultimately determine the scope of business operations. They provide crucial contributions both directly and indirectly through word-of-mouth, service quality, customer loyalty and critical incidents, which, when effective, generate organisational profits (Yingzi, X., van der Heijden, B., 2005).

Word of Mouth

Word-of-Mouth communication between existing customers and potential customers can be...

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