There’s no need to remind anyone of the cost of living crisis, inflation woes and fear of looming recession – it is all too real with more than 50 per cent of Australians struggling financially and not making enough each month to make ends meet.

Price and value are at the forefront of everyone’s minds. But in a race to the bottom are we creating a battlefield that will only encourage consumers to shop around and switch?

With people tightening their belts, retaining and building loyal relationships is more important than ever. And the way to do this is by creating experiences for customers over and above discounts and sales.

Building loyalty with existing customers is an easier and more valuable win than attracting new ones with a Semrush report identifying a 60-70 per cent probability of selling to a previous customer but only 5-20 per cent with a new one. Existing customers tend to spend nearly a third more too.

Alongside pricing strategy and value-adds, there is another, vital way for retailers to provide more for their customers. And it starts with your people.

Customer experience is driven by your people’s experience.

 It’s not a surprise that the happier your employees are, the better the experience they deliver to your customers.

Recent Glassdoor research tells us that a 1-star improvement in a company’s employee experience rating corresponds to a marked improvement in customer satisfaction ratings.

So how can retailers help their employees be happier and deliver experiences for customers that keep them coming back, even in challenging economic times?

Firstly, close the gap between CX and PX

Your customer experience (CX) is what makes you stand out; it’s why your customers choose you. Therefore, people are one of your key assets in delivering it.

Too often CX is viewed in a vacuum, created by the marketing and customer teams to reflect the unique ways your brand delivers. Translation to those at the coalface can be lacking.

As the old stat goes, between 60-90 per cent of strategies fail in their execution.

How do you currently communicate your CX to your employees? And how well is it being understood and more importantly, actioned and measured? How do you champion and embed CX throughout every part of your organisation?

Secondly, make it matter to your people

While many organisations have embraced a customer-first philosophy, for people within the business the question still comes down to – how does this relate to me?

How are you linking your customer experience to the things that matter to your people?

Linking reward and recognition programs to customer experience can be one simple way – from recognising and calling out those that deliver. However, embedding it deeper has better results.

Take the example of Cisco. The business has infused its purpose of, “committing to powering an inclusive future for all’, in its learning and development programs. This helps employees connect and engage with the vision of the organisation. Investing in a comprehensive, self-led learning and development program empowers employees to drive their own career development and learn in ways that will benefit the organisation and their customers while playing to their own strengths and desired career goals. In 2022, Cisco was recognised as the third World’s Best Workplace 2022, according to Great Place to Work.

Think about how you are connecting your customer experience to reward and recognition, learning and development and performance management.

Thirdly, happier people = happier customers

Engaged employees are happier, more productive and more effective at their jobs. Culture Amp’s survey on Retail Australia shows the sector scores below the global average on employee engagement at 70 versus 73 per cent, ranking in the bottom half of all markets.

How are your engagement scores?

We know that when humans feel a certain way, they communicate this both consciously and subconsciously to their teammates and customers.

How engaged is your workforce? Do they feel part of a team that is supporting and caring for their needs? Because in the cost-of-living crisis, your customers aren’t the only ones being impacted.

So what should you be paying attention to? Look through the lens of three core areas of focus – intellectual commitment, emotional commitment and capability commitment.

We call this Heads, Hearts and Hands.

Heads

Work to implement better communication and better understanding. Words on a page won’t cut it. Rethink how you currently communicate with your teams, particularly with disparate workforces on the frontline.

Hearts

How can you make it worth their while? Focus has been on attraction but now organisations need to consider what is most important to retention strategies and understanding what matters to your people and why.

Hands

How can you make it happen? Invest in L&D, training and demonstrating a commitment to your people’s growth. Doing so will only contribute to yours.

Price and discounts will only go so far. In the service industry, your secret weapon is your people. And now’s the time to invest in them.

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This article first appeared in Inside Retail

Ashling Withers is a Senior Consultant – Employer Brand at Principals.

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