Dr. John L. Avella, President of EQ International Perspectives, generously contributed the following article in which he details his work on the relationship between Emotional Intelligence and customer and staff loyalty.
How a customer service provider deals with emotions (theirs and the customers’) in a customer interaction can influence the outcome of that experience. That outcome can be positive, negative or neutral. (Price, Arnould and Deibler, 1995), and positive outcomes encourage customers to return continuously and provide a lifetime income stream for the organization. Additionally, positive customer-staff interactions encourage customers to publicly praise the organization, and this word-of-mouth advertising is the most effective and cost efficient form of advertising (Reichheld, 2006). These positive experiences are the foundation of customer loyalty and can increase the value of each customer by 25-50% while saving millions in advertising costs.
The literature is rich with research about the role of emotions in the customer experience and the role of positive emotions in customer and staff loyalty. Some examples would be Rosenberg (1998), who points out that emotions reveal what is important for customers, as well as Yu and Dean (2001), who detail the importance of positive and negative emotions in predicting customer loyalty.
I have focused my own research on a training process that enhances emotional competence. For my research, I actually implemented this training process in four companies and at Columbia University.
This training process utilizes the following: an Emotional Intelligence assessment—the Emotional Quotient Inventory (EQ-i®)—confidential assessment feedback, behavior change planning, workshops, one-on-one goal coaching, and organizational strategies for effective learning transfer. This process has produced statistically significant increases in the participant’s emotional competence and customer and staff loyalty. The training also benefits managers and non-customer-facing supervisory staff. When managers are involved in the loyalty training, there is a substantial reduction in staff turnover. This powerful competitive advantage helps these loyalty leaders grow at twice the rate of their competition.
In a study I conducted at Columbia university, the participants as a group had statistically significant changes in six emotional skills measured by the EQ-i. In one of the implementations, the group that experienced the training had a 20% decrease in turnover. Lastly, in implementations where customer loyalty was measured, there was an increase in loyalty from 22-33%. Participants immediately recognized the competitive edge of using an EI-based program.