How Leaders Influence the Customer Experience

April 13, 2023

Have you ever been on the phone for an hour with customer service, and once you finally get to talk to a human to resolve your issue, they only say: “I’m sorry, I can’t help you.” And it’s true; they can’t. They don’t have the power or authority to resolve the problem. It’s frustrating to both the employee and the customer. What you may not realize is how much leaders influence the customer experience

What impact does a leader have on customer experience?

Well, not a lot if you don’t establish a strong leadership mentality among direct reports and trust that they are smart enough to make good decisions.

Customers are not stupid; they see the difference when they interact with an employee who is empowered to solve problems and treated as a leader versus one who reads the script and does what they are told.  Customer expectations go up every year, and the challenge of getting and satisfying customers is a primary focus in most organizations.

How many times are managers told to make the customer the center of all they do and be committed to the customer experience?

But how can they make it sink in?

Typically, those in the sales or customer service function are primarily responsible for keeping customers satisfied and engaged. But managers’ skills and approaches are often reflected in employees’ day-to-day actions.

We wanted to see if the skills and actions of leaders were apparent and impacted customer satisfaction scores. We had customer satisfaction data from 81 customers, along with 360-degree assessments of managers. We merged the customer satisfaction data with the 360-degree assessments of managers with feedback from their managers, peers, direct reports, and others. On average, each manager was rated by 14 different raters.

The graph below the horizontal shows the customer satisfaction scores divided into five groups ranging from customers with satisfaction at the “Bottom 10%” to those at the “Top 10%”. The vertical axis bars show the managers’ overall leadership effectiveness rating. It is clear that the most satisfied customers were matched up with sales leaders who were significantly more effective at providing a great customer experience.

Leaders Influence Customer ExperienceRegister now for the WEBINAR—External and Customer-Focused Leadership: How Strengthening Connections Can Promote Loyalty and Prevent Disruption.

The Seven Most Valued Capabilities for Leaders to Influence Customer Experience

By taking the customer satisfaction ratings and dividing them into two groups (Below Average and Above Average,) 54 unique leadership behaviors were examined across the 81 leaders in the study. The top 20 behaviors showing the largest statistical differences between the most and least satisfied customers were then factor-analyzed. Seven clusters of items emerged that significantly impacted customer satisfaction. These clusters were the capabilities managers exhibited that stood out and differentiated them from the below-average leaders. When managers excel in these seven critical behaviors, customer satisfaction increases significantly.

Ability to Inspire and Motivate. If managers want employees to care about their customers, they need to help them understand how their job provides meaning and purpose to the organization. For example, a former colleague of mine shared her experience having groceries delivered to her house by Kroger. She said the delivery person made sure she was home, had a genuine conversation, and thanked her for her business, and when she went to look at her groceries, she found a handwritten card with a Tootsie Pop attached. This positive customer experience made her even more dedicated to the delivery service, and happy that the individual who served her today was proud of her job and glad to be doing it. She was willing to go the extra mile. After hearing this story on LinkedIn, the manager awarded this employee the Every Customer Every Time certificate of recognition. This is one example of an organization that inspires every employee to provide a positive customer experience.

Collaboration and Cooperation. What customers want is an organization where people work well together and cooperate. Organizations with internal conflicts and disagreements often frustrate customers and create difficulties. Having a well-functioning team where people coordinate and interact positively with each other will make a big difference in the quality and effectiveness of the products and services delivered.

Quickly Delivering Results. While customers want to be inspired, they also want results quickly delivered. Speed is critical here. Most of us, as customers, have examples of delayed delivery and the frustration and problems that can create. Leaders who manage their teams to deliver the right results at the right time will generate high customer satisfaction.

Clear Vision and Direction. Leaders with a clear vision and strategy are always better at delivering a quality product on time. Leaders who do this well keep their teams focused on critical priorities and avoid getting caught up in low-priority issues.

Honesty and Integrity. Customers know quickly if they are dealing with a salesperson who will carefully honor their commitments or someone who is likely to promise one thing but fail to deliver. Sales personnel take their ques on honesty and integrity from their managers. Customers want an honest person who will give them accurate information, not someone who will say anything to get a deal but fail to deliver. Leaders who set an example and demand honesty create a culture where everyone is motivated to do the right thing.

Takes Initiative. Leaders who are excited to take on challenging goals and delivery deadlines are valued by customers. Leaders who settle for the easy sale that works but is not a perfect fit leave a lot of customer satisfaction on the table. Customers want someone willing to go the extra mile and do more than the minimum.

Creating an organization that values and prioritizes the customer experience requires coordinated action at every level. A Harvard management update described how this happens effectively:

“Leaders need to communicate the importance. Managers need to show employees how their actions affect the customer–for good or for ill. Employees need to know they can and should take proactive steps to address customer issues. Processes need to be in place to reward customer-focused behavior. And communication channels need to be open and clear so that valuable customer intelligence is disseminated to all those with the power to act on it.”

Leaders who utilize these behaviors to inspire, collaborate, and communicate the vision and direction of customer experience will see the difference in customer loyalty and employee satisfaction. In today’s crowded markets with competing products, it is often difficult for a product or service to stand out. However, having a good product delivered with excellent leadership support will take a good product or service and turn it into a remarkable customer experience.

-Joe Folkman

*This article originally appeared in Joe Folkman’s LinkedIn Newsletter Leadership Psychometrics. 

Register now for the WEBINAR—External and Customer-Focused Leadership: How Strengthening Connections Can Promote Loyalty and Prevent Disruption.