Customer Satisfaction suffers a 41% decrease because the staff is one meager mood unit happier.

My recent experiences and subsequent customer satisfaction remind me of an article I wrote a few years ago. Now that I am confined to all-day-long work in the home office because of COVID-19, I spent more time talking to customer service staff. And I believe it is interesting to share the article again.

does employee happiness equal customer satisfaction?

 “Grumpy employees work harder” is the headline of an article by Dries De Smet in the Belgian newspaper De Standaard on Nov 19. 2017.  Mr. De Smet’s article addresses a recent research paper from Northwestern University in which the authors claim to be the first to provide evidence of causality between an employee’s mood and her productivity in the workplace. To be clear, we are talking about two groups of contact center employees here: 2,749 customer service representatives and sales representatives in the US.  The researchers also have mood data for 24,950 salespersons in 763 retail stores throughout the US (from September 2013 until August 2015).

What triggered my curiosity was that the newspaper article also claims that happy contact center employees have lower customer satisfaction scores

First, let’s look at how the researchers defined and measured mood: they encouraged respondents to fill out an online questionnaire daily.  The researchers identified five moods: unstoppable, good, so so, exhausted, and frustrated.

Sure enough, statistics reveal that one unit increase in mood score decreases customer satisfaction by 41%. As the mood improves, the number of calls per productive hour decreases while the number of minutes per call increases by 2 minutes on average, corresponding to a 27% rise relative to the average.

The longer call durations are a result of keeping customers on hold. The percentage of minutes on hold increases by 8.5 percentage points, representing an increase of 56% relative to the average.  Apparently and maybe shockingly, a better mood results in fewer calls, customers being kept on hold longer, possibly reporting lower customer satisfaction.

The researchers thus conclude that an increase in mood causes productivity to decline and customer satisfaction to drop.

And, the data on salespeople in a store paint a similar picture. A unit increase in the mood scores reduces average employee sales per hour by 8% and the store’s EBITDA by 20%.  These findings show that the negative correlation between mood and productivity among contact center employees generalizes to a more representative and more extensive group of workers.  

The simple explanation of it all is that, as employees are in a better mood, they let their guard down and chat more with colleagues. As we are happier, we are less focused, less conscious of our actions and behavior. And it happens at the expense of productivity and customer satisfaction.  

It’s interesting to see how the research results differ for sales reps and customer service representatives: the effect of mood on productivity is less intense for sales representatives.  The reason is that 41% of the sales representatives’ earnings are variable and based on performance, whereas 98% of a customer representative’s have a fixed income. If getting distracted from work has a high enough monetary cost, one is less likely to get distracted when in a good mood since one can’t afford to let one’s guard down.  Bills do not pay themselves.

The researchers do not suggest that employers should try to decrease the mood of employees. The results of their study only deal with short-term and individual mood shifts. However, they provide evidence that mood enhancement in the short-term only does not increase productivity [in contact centers]. 

The challenge seems clear to me: increase employees’ mood while remaining conscious about the job at hand. There’s nothing wrong with a good mood; the culprit is the distraction that comes with it. Making a large portion of someone’s earning variable and performance-based seems to help, but there are others means at our disposal as well. Infusing passion and belonging to a strong customer culture will do nicely. Which begs the question: where were the trainers and coaches in the contact centers that were studied? Maybe in an unstoppable mood, chatting away.

Perhaps the service agent, forced to work from home now because the situation demands it and technology perfectly allows it, witnesses a huge increase in customer satisfaction as she learns how to bond in new ways.

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