“Happy employees are productive employees.” Sounds like a phrase from a cheesy motivational poster, right? And yes, studies have shown this to be true in a general sense. But how about the hard numbers? Can employee engagement really translate to higher sales figures?
Well, the research is in. A study from Yale researchers Nathan Yang and Ahmed Khwaja has revealed that more engaged salespeople do drive more sales. Specifically, Yang and Khwaja found that highly engaged sales reps are more likely to successfully upsell their customers—and leave their customers more satisfied.
“We were inspired by the attention companies place towards making their themselves desirable places to work,” Yang told CloserIQ. Google, with its famous free snacks, transportation, and generous parental leave, came to mind, he said. “Even at the Yale School of Management, something as simple as a ping-pong table has a positive impact on faculty.”
So the researchers looked for a link between engaged employees and higher sales by examining data from the car rental industry. (Yes, tech sales and car rentals aren’t the same, but keep reading—the lessons are universal.)
First, the researchers looked at employee engagement at car rental companies through questionnaires that asked workers things like whether “management is focused on the long-term success of the company,” if “our customers will benefit from the changes the company is making,” and whether “the company is doing a good job supporting employees through change.”
These employee engagement ratings were then compared to 150,000+ car rental transactions made by 100,000+ customers, including information about whether each customer was upsold—if he ended up with a higher-class car than the one he originally booked.
Upselling was a smart way to gauge sales because higher class cars have wider profit margins for the car rental companies, Yang pointed out. He added that upselling is “a fairly rare occurrence in the data,” so when it happens, it’s really meaningful.
The findings? Yup, employee engagement was, indeed, connected with improved upselling. The data showed that highly engaged employees were more successful at getting customers to accept higher class cars than their less-happy counterparts.
Yang and Khwaja also found a positive relationship between engagement and customer satisfaction, as well as a correlation between customer satisfaction, retention, and how soon the customer would return for another transaction (measured through the companies’ NPS, or net promoter score). In other words, engaged employees lead to happy customers who upgraded their purchases, stayed with the company, and came back sooner to buy again.