by Brenda Pohlman
I’m really fortunate to work with smart customers. In fact, that’s among the best aspects of my job. As a consultant, it’s my responsibility to encourage customers to think big about what’s possible with recognition, to stretch the boundaries of their ideas and get creative about how to achieve lofty goals. But as is often the case, it was my own thinking that got stretched by a customer during a recent conversation about the business case for recognition.
This clever customer suggested that there is likely a connection between recognition and engagement and employee sales. By “employee sales” he meant actual purchases of your company’s products or services by employees as consumers themselves. The question was posed this way: “What if…” (Let me pause and point out the use of this classic problem-solving tactic. Any question beginning with “What if” is one worth asking!). “What if we could show that our recognition-oriented culture increased employee engagement and this in turn made employees feel great about our company’s brand as a consumer and they actually bought more of our products as a result? What if a percentage of our employees were inspired to spend $100 more a year on our products because they felt appreciated at work?”
I’d never heard that specific question asked before and didn’t have an answer, only a reaction. Yes, of course! This instinctively makes perfect sense – this connection must exist – but I didn’t have any proof.
There’s a robust body of research today on the connection between recognition and constructs like employee retention and engagement. Our regular blog readers will know that we’re often citing these powerful proof points. These are the go-to arguments that create the foundation for a strong business case for recognition.
The first part of the customer’s idea – the correlation between recognition-centered cultures and improved employee engagement – is well established. Likewise, the connection between employee engagement and increased company sales is well documented. There’s also lots of supporting research showing that if your employees are good consumers of your brand themselves, they are likely to be good brand advocates with others, which yields increases in customer satisfaction and sales.
But it seems these arguments may have overlooked a piece of low-hanging fruit in the midst of the correlations: the top-line revenue directly represented by employee purchases of your goods and services. Admittedly, this idea is only relevant if you work for a company with consumer-facing product lines, like the customer who posed the original question. His company has hundreds of thousands of employees and hundreds of consumer brands to sell to those employees. Undoubtedly, most of his employees are already customers. So ubiquitous are this company’s brands that you and I are likely already customers too. But if you are, say, a manufacturer of jet engines, this concept isn’t going to be part of your recognition business case strategy.
My instinctively positive support of this idea is born in part from personal experience. Personal experience in amassing a footwear collection that peaked at 65 pairs of shoes. I had a job in my mid-twenties that I adored. I was a Store Manager with a specialty footwear retailer and damn, was I engaged. The effort I made to succeed in that role is almost shocking to me when I look back on it. How is it that these were some of the toughest days of my working career but also some of my fondest worklife memories? What was it that inspired my willingness to commit to a relentless schedule of double shifts, back-to-back-to-back workweeks without a day off in sight, and foregoing family time at the holidays, among the other challenges a retail life brings?
Recognition of course. I had a District Manager who was great at it. He offered near daily feedback on what I was doing well. He congratulated me and my team on district-wide calls for significant store accomplishments, and took moments to follow-up with a quick ‘thank you’ for lesser contributions. It was constant, timely, genuine and motivational.
One particular recognition moment is still fresh today – the day the inventory audit numbers were released. I’d prepped my little heart out for that audit and kept my staff in the store til 3:00 am on inventory night to be sure we got it right. My District Manager called me at home one evening with the results. He said he couldn’t wait to share the news. My store had achieved an amazingly low loss ratio, meaning I’d managed to not lose too much stuff through bad stock room practices and theft. He said he’d never seen anything like it. It was the lowest loss rate in the company. I could hear in his voice how thrilled he was, not just as a leader who needed his stores to perform well, but as someone who was genuinely excited for me about my accomplishment.
All that recognition fueled my engine. And so I exuded the classic behaviors of a highly engaged employee, chief among them perhaps – immense brand loyalty. Sure, I worked hard during my tenure and put forth lots of discretionary effort, but I also bought 65 pairs of this company’s shoes while I was there. 65 pairs of shoes purchased by a poorly paid employee because she had a love for the brand inspired by feelings of being valued and appreciated! Whoa.
My personal revenue-contributing experience is a mere drop in the bucket compared to what’s possible. For my clever customer who inspired the idea, we speculated that this “employee as consumer” concept could mean millions to his company’s revenue numbers.
Along with your lofty goals around improved retention and engagement, don’t overlook the low-hanging fruit when creating a cost-benefit analysis for recognition. Do you know how much revenue is represented by employee purchases at your company? What if your recognition practices had a hand in boosting this because your employees feel valued and feel good about your culture and your brand? How much would this mean to your top line sales numbers – another $100,000 a year, a million, more? Now imagine if your recognition investment paid for itself as a result. There’s your business case.
(For the record, I’ve since embraced the notion of downsizing in my wiser years and my current shoe inventory is a mere fraction of its former self.)
About Brenda Pohlman
A senior recognition strategist and consultant for Globoforce, Brenda Pohlman might better be called a Recognition Detective. Brenda spends her days helping customers uncover and assess recognition practices and set new directions to achieve strategic goals. She has spent the majority of her career consulting with companies on a wide range of HR practices including employee engagement, performance management, rewards & recognition, talent assessment, and training. Brenda holds a B.A. in Psychology from Boston University.