“Culture is the backbone of any successful organisation. It’s what drives employee engagement, customer satisfaction, and ultimately, business success.” – Denise Lee Yohn
Introduction: Customer Experience – the Hidden Force Behind Business Success
Imagine walking into a store where every employee greets you with genuine enthusiasm. You ask a question, and the response is not only prompt but full of helpful insight. As you leave, you feel valued—not just as a customer but as someone who’s truly appreciated. You’re likely to return, and more importantly, to recommend this business to others. This isn’t just great customer service—it’s a reflection of a thriving company culture.
Now, contrast that with a business where the service is indifferent, where employees seem disinterested and disengaged. What’s your reaction? You probably leave feeling unnoticed, and the likelihood of returning drops significantly. In fact, as PwC found, 32% of customers would stop doing business with a brand they loved after just one bad experience.
This example illustrates a simple but powerful truth: company culture drives customer experience.
But why does culture matter so much? Because a strong, positive company culture doesn’t just create a pleasant work environment—it directly impacts the bottom line. Studies show that companies with a strong culture experience higher levels of employee engagement, customer satisfaction, and ultimately, profitability. According to McKinsey, organisations with a robust culture enjoy a 65% improvement in customer satisfaction and a 25% increase in profitability. The PWC study mentioned earlier further underscores this by revealing that culture is a key determinant in building exceptional customer experiences that drive long-term business success.
In this article, we’ll explore how a thriving company culture fuels exceptional customer experiences and why this, in turn, results in better business performance, customer retention, and a lasting competitive advantage. For a deeper dive into how company culture forms the foundation for business success, check out my previous article, “Defining Company Culture: Building a Foundation for Business Success”.
The Role of Employee Engagement in Shaping Customer Experience
The Foundation of Engagement:
One of the key drivers of customer experience is employee engagement. The simple truth is that happy, engaged employees are more likely to go above and beyond for customers. When employees feel valued, understood, and connected to the company’s purpose, they are naturally more motivated to deliver outstanding service.
Employee engagement goes far beyond compensation or perks. It’s about creating an environment where employees feel empowered to take ownership of their work and are aligned with the company’s values and goals. When employees buy into the company’s mission, their enthusiasm and passion are reflected in the way they interact with customers.
Consider companies like Zappos, where employees are not only encouraged but empowered to deliver excellent service. Zappos’ culture is centred around employee empowerment, making their workers feel as though they are integral to the company’s success. This employee-first approach leads to exceptional customer experiences and, as a result, greater customer loyalty and increased sales.
On the flip side, low employee engagement—which is prevalent in companies with poor culture—often leads to poor customer experiences. Employees who feel disengaged may lack the motivation to offer great service, leading to a decreased level of customer satisfaction. A disengaged workforce can contribute to customer complaints, high turnover rates, and a negative reputation. This impact is far-reaching and can undermine a business’s long-term success.
As Simon Sinek says, “Company culture matters. How management chooses to treat its people impacts everything for better or for worse“.
The Link Between Culture and Engagement:
A company’s culture is the foundation for employee engagement. Employees who feel aligned with the values of their organisation are far more likely to remain engaged, and this engagement naturally spills over into their interactions with customers. When culture drives engagement, it creates a virtuous circle where satisfied employees lead to satisfied customers, which in turn drives profitability.
Patagonia is another prime example. Their commitment to sustainability is woven into the fabric of their culture, and this cultural alignment helps create a passionate, highly engaged workforce. Employees at Patagonia genuinely care about their work because it aligns with their personal values, leading to better customer interactions and stronger brand loyalty.
Gallup’s State of the Global Workplace study highlights the staggering cost of disengaged employees, estimating that a staggering $8.9 trillion is lost in global GDP annually due to low engagement levels. Just 23% of employees worldwide are engaged, which indicates how much potential is untapped in businesses that haven’t invested in building a strong, positive culture. For businesses of all sizes, this represents a significant opportunity to drive growth simply by focusing on employee engagement.
The link between culture and engagement is well illustrated by Vaughn Aust in, “Happy employees lead to happy customers, which leads to more profits”.
And remember what the late Tony Hsieh, then CEO of Zappos, said, “Your company culture is the biggest differentiator you have. It’s the thing that will make you stand out from the competition.”
Case Studies of Culture Driving Customer Experience (and the Consequences of Poor Culture)
Positive Case Studies:
Let’s look at some real-world examples to see how culture can directly influence customer experience.
- Zappos: Known for their commitment to customer service, Zappos has built a culture of empowerment. Employees are given the freedom to go to great lengths to solve customer problems, without needing to escalate every issue. This empowerment creates a culture where employees are invested in the company’s success, which in turn results in exceptional customer experiences. Zappos has built a loyal customer base—one that’s so passionate about the brand that they are willing to pay a premium for their products.
- JetBlue: A smaller airline that consistently ranks highly for customer satisfaction, JetBlue has built its brand around providing excellent customer service. The airline’s culture revolves around employee satisfaction and customer care. By ensuring that employees are engaged and happy, JetBlue has created an environment where its customers feel valued, resulting in a high level of customer retention and brand advocacy.
- Buffer: Buffer’s transparent and trust-based culture enhances their customer relationships. By openly sharing company metrics, decision-making processes, and even salaries, Buffer builds trust with its customers and creates a community that feels connected to the brand’s mission.
- BrewDog: This smaller brand has effectively linked culture to business growth. BrewDog’s culture of rebellion and innovation resonates with its customer base, creating a strong sense of community and loyalty. Employees who are passionate about the brand’s mission and values provide authentic, engaging service that keeps customers coming back.
Negative Case Studies:
On the other hand, when company culture is misaligned with customer expectations, the consequences can be severe.
- United Airlines: A prime example of poor culture affecting customer experience, United Airlines has faced multiple public relations crises due to poor customer service, often stemming from disengaged employees. The infamous 2017 incident, where a passenger was forcibly removed from a flight, highlighted the gap between the airline’s stated values and the actual behaviour of its employees. This incident, and others like it, significantly damaged the company’s reputation and caused a decline in customer trust and satisfaction.
- Wells Fargo: The financial giant’s cultural issues—particularly the focus on sales over ethical behaviour—resulted in the creation of fake accounts in customers’ names, which led to a massive scandal. This toxic culture, prioritising profits over people, ultimately damaged the company’s reputation and customer trust, resulting in lost business and a sharp decline in profitability.
- Uber: Uber’s early culture, which emphasised hyper-growth at all costs, resulted in multiple scandals and customer service issues. While the company did recover to some extent, their reputation was tarnished, and it took years to rebuild the lost trust. This example highlights how a culture that prioritises short-term gains over long-term values can backfire, damaging both the customer experience and overall profitability.
For some further detail on poor corporate culture and customer experience, see my articles, How to Ruin Your Reputation and Brand – Lessons from Turkish Airlines and Silicon Valley Bank – Did its Leadership Cause the Collapse? – Accountability in Corporate Failures.
The Tangible Business Benefits of Aligning Culture with Customer Experience
A strong company culture doesn’t just feel good—it leads to tangible business benefits that affect everything from customer retention to profitability. As more businesses realise the importance of culture, it’s become clear that investing in a positive workplace culture is an investment in your customers, your bottom line, and your long-term success.
Better Customer Retention and Lifetime Value:
Customer retention is crucial to business success, and a strong culture plays a huge role in keeping customers happy. A positive culture that focuses on customer-first thinking results in happier customers who are more likely to return again and again. The customer lifetime value (CLV) increases significantly when customers trust that the company they’re dealing with will consistently deliver great experiences. This trust is built by employees who are empowered, motivated, and aligned with the company’s mission.
According to research by Bain & Company, a 5% increase in customer retention can lead to a 25% to 95% increase in profits.
Consider Apple as an example. Apple’s exceptional customer service stems from a culture of innovation and employee empowerment. Employees are not just encouraged to solve problems; they are trained to go the extra mile, ensuring that customers feel valued. Apple’s ability to build long-lasting relationships with customers through its brand-driven culture leads to high retention rates and greater customer loyalty.
Additionally, lower churn rates save companies money. The cost of acquiring new customers is far higher than that of retaining existing ones, and when a company’s culture is aligned with customer experience, retention naturally improves. When employees are engaged and motivated, they’re more likely to create lasting relationships with customers, leading to a stronger revenue stream.
Premium Pricing and Reduced Price Sensitivity:
When customers trust a brand and feel aligned with its values, they are less sensitive to price fluctuations. A strong culture allows businesses to differentiate themselves by offering value beyond just their products or services—what they offer is an experience.
Starbucks is a prime example of this. The coffee giant commands a premium price for its products, not because they’re the cheapest, but because they provide a consistent, high-quality customer experience. Starbucks has built a culture of inclusivity, community, and excellent service, which makes customers feel like they’re getting more than just a cup of coffee—they’re getting an experience. This culture-driven customer experience justifies the higher price point, and customers are willing to pay for it.
Increased Brand Advocacy and Word-of-Mouth Marketing:
One of the most valuable assets a business can have is brand advocacy. Customers who have had a great experience with a company’s culture are more likely to become advocates for the brand, spreading the word to friends, family, and social media followers.
A strong company culture creates customers who don’t just purchase products—they advocate for the company. This word-of-mouth marketing can lead to new customers and more revenue, all at a lower cost than traditional advertising.
Chick-fil-A is another great example. Known for their customer service, the brand has created a culture that focuses on going above and beyond for customers. As a result, Chick-fil-A has an incredibly loyal following, and customers often spread the word about their positive experiences, bringing in new customers. This brand advocacy is invaluable and translates into higher revenue and lower marketing costs.
As discussed in my article, “Transform Your Business: The Power of Exceptional Customer Service”, exceptional customer service, driven by a strong culture, is a key differentiator in today’s competitive marketplace. It’s what sets you apart, attracts loyal customers, and fuels sustainable growth.
How to Align Your Company Culture with Customer Expectations
Having established that a thriving culture directly impacts customer experience, the next step is to ensure that company culture is aligned with customer expectations. This alignment is critical to creating an experience that customers love—and that drives business growth.
Start from the Inside Out:
The first step in aligning culture with customer experience is to define core values that resonate with both your employees and your customers. These values should reflect the essence of what your business stands for, guiding how employees interact with customers, make decisions, and approach challenges. When employees understand and embody these values, they can offer better, more consistent service to customers.
It’s important that leaders play a central role in this alignment. They must not only communicate the company’s values but model them in every interaction. Leadership by example is crucial for ensuring that the company’s culture is consistently reflected in the customer experience.
For more in-depth information on values, see my article on Establishing Your Values.
Communicate, Communicate, Communicate:
As a CEO, one of your most important roles is to consistently communicate openly and transparently. Use storytelling to paint a vivid picture of what a successful customer-centric culture looks and feels like, and how important it is, sharing examples of how your company’s values translate into positive customer experiences.
My article, Leading with Confidence: Mastering Communication to Inspire and Unleash Peak Performance, looks at this crucial leadership skill in more detail.
Invest in Training and Development:
One of the most effective ways to align culture with customer experience is through training. Regular training ensures that employees are not only knowledgeable about the company’s products or services but also aligned with its values. Investing in customer service training that emphasises the company’s culture can improve customer interactions and satisfaction.
As Sir Richard Banson puts it, “Train people well enough so they can leave. Treat them well enough so they don’t have to”.
Integrate Culture into Hiring and Onboarding:
Hiring for cultural fit is essential. When employees align with your company’s values, they are better positioned to provide excellent customer service. Make sure that hiring decisions reflect not just skills but also how well candidates will fit into your culture.
The onboarding process should be structured to introduce new hires to the company’s culture from day one. A well-defined onboarding process that communicates company values and expectations helps new employees feel part of the team and aligned with your customer service vision.
For a detailed look at hiring and onboarding, see my articles, Building Your Dream ‘A-Team’ – Hiring A+ Talent and Onboarding Excellence: Unlocking the Full Potential of Your New A-Team Hires.
Empower Staff:
Employees should be given the autonomy to make decisions that benefit customers. Empowering staff to solve problems without always needing approval can lead to faster resolution times and increased customer satisfaction. Encourage feedback from frontline employees, as they are often the first to know how customers are reacting to your service and products.
A great example of empowerment is Ritz-Carlton, where employees are given up to $2,000 to resolve customer issues without needing management approval. This level of empowerment is rooted in the company’s culture of delivering exceptional service and has led to stellar customer experiences and brand loyalty.
You might find my article, Leading a Fearless Business: Boosting Growth and Profits interesting in this regard.
Lead by Example:
It should go without saying that leadership must embody the values that drive customer service excellence. They should communicate these values clearly and consistently, model them in every interaction, and hold themselves accountable to the same standards as their employees.
If you would like to read further on this, see Leadership Alignment: The Key to Turning Vision into Reality.
Recognise and Reward:
Employee recognition plays a key role in aligning culture with customer expectations. Employees who are recognised for their hard work and for delivering exceptional customer service feel more valued and motivated. Regular recognition also encourages others to follow suit, creating a positive feedback loop that continually improves the customer experience.
For example, Southwest Airlines is known for its customer-first approach, and much of that stems from continuous training and development that empowers employees to make decisions that benefit customers. Their SWAG programme (Southwest Gratitude) encourages employees to go the extra mile for customers, which is a direct reflection of the company’s culture.
For greater detail on recognition and reward programmes, see From Good to Great: How Employee Recognition Can Transform Company Culture.
Measure and Improve:
As with everything in business and life, you shouldn’t stand still but evaluate performance and how to continue to improve. Measure both employee engagement and customer satisfaction using surveys, feedback loops, and key metrics such as Net Promoter Score (NPS) and Customer Satisfaction (CSAT) scores and use the data from these to make continuous improvements and ensure the culture remains aligned with customer expectations.
My article, Mastering Continuous Improvement: The Imperative of Effective Leadership in Driving Success, discusses the topic of continuous improvement in more depth.
Challenges in Aligning Culture and Customer Experience
While aligning culture with customer experience is essential, it’s not without challenges. Many organisations face hurdles when trying to change or maintain a culture that aligns with customer expectations. Recognising these challenges—and addressing them head-on—is critical to creating a lasting impact.
Resistance to Change:
In many organisations, especially larger ones, resistance to change can hinder the alignment of culture with customer experience. Employees may be used to working in a certain way, and shifting the company’s mindset to one that prioritises culture over all else can be difficult.
To overcome resistance, leadership commitment is essential. Leaders must demonstrate a commitment to culture, clearly communicating why it’s important for the company and for customer experience. This message must be reinforced at every level of the organisation.
Lack of Accountability:
If leaders don’t hold themselves and others accountable for embodying the company’s culture, employees will struggle to follow suit. Accountability ensures that everyone is working towards the same goal—creating a customer experience that aligns with the company’s values.
You can link this to my article on accountable leadership, which discusses how leaders need to hold themselves and their teams accountable for their actions, especially when it comes to delivering on company culture.
Ensuring Consistency Across the Organisation:
As your company grows, maintaining a consistent culture can be challenging, especially when new locations, teams, or products are introduced. This requires strong leadership and clear communication, or the culture will start to break down as layers are added..
One example of consistency is HubSpot, whose culture is deeply embedded in everything from hiring to onboarding to product development. By continually reinforcing the company’s culture at all levels, HubSpot has maintained its customer-first mindset even as it scaled rapidly.
Misalignment Between Strategy and Culture:
Finally, it’s crucial that business strategy aligns with company culture. A strategy that prioritises growth at all costs, for instance, may conflict with a culture that values sustainability and long-term relationships. A mismatch can lead to confusion, disengagement, and ultimately poor customer experiences.
As discussed in my previous article, Does Your Business Strategy Match Your Company Culture?, businesses that fail to align strategy with culture risk undermining their customer experience and hurting their profitability.
The Long-Term View: Culture as a Competitive Advantage
In today’s competitive marketplace, businesses are constantly looking for ways to differentiate themselves. While many companies focus on product innovation or cutting-edge marketing strategies, there’s one factor that can give you a sustainable edge: company culture.
Culture is the backbone of every successful organisation, and in a world of easily replicable business models, it has become the ultimate competitive advantage. While products and services can be copied or improved upon, a company’s culture is uniquely its own. When a business invests in creating a strong, positive culture, it becomes something that competitors can’t replicate. It is this authenticity and consistency that attracts and retains customers over the long term.
A customer-centric culture doesn’t just benefit employees; it directly enhances the customer experience. When your company is united by a common set of values and a shared sense of purpose, this is felt by your customers, who are more likely to develop trust, loyalty, and a sense of connection with your brand. This deep-rooted loyalty, built through consistent values and behaviours, is far more powerful than any short-term competitive advantage.
Companies like Patagonia, Southwest Airlines and others have demonstrated that a strong culture is not just an internal business asset—it’s the driving force behind their success in the marketplace. Their customers feel the authenticity of their brands and are rewarded with exceptional service, ensuring long-term relationships that lead to sustained revenue growth.
Conclusion: The ROI of a Positive Culture – How it Powers Customer Satisfaction and Business Growth
At the heart of every thriving business lies a strong company culture. A positive culture leads to engaged employees, which in turn drives exceptional customer service. The result? Increased customer satisfaction, higher retention rates, brand loyalty, and a substantial ROI in the form of greater profitability and business growth.
As Jerry Fritz once said, “A product or price advantage can be easily duplicated, but a strong customer service culture can’t be copied.” This is why companies like Apple, Patagonia, and Zappos continue to lead their industries. Their culture is their competitive advantage—and it’s one that can’t be easily replicated by competitors.
Investing in a positive culture is not just a nice-to-have; it’s a must-have for any business that wants to create long-lasting relationships with customers and build a sustainable brand. When your company’s values align with customer expectations, it creates an unbeatable synergy that drives business growth.
As business leaders, it’s crucial that we reflect on our own company cultures. Is your culture aligned with the customer experience you want to offer? Are you empowering employees to be brand advocates and ensuring that your values are consistently reflected in every customer interaction?
Bear in mind that for every £1 invested in culture-building, there’s a £4.30 return via reduced turnover and heightened innovation, according to a 2024 Gallup study.
I encourage you to reflect on these questions and share your thoughts. How well is your culture connected to the experience your customers have? What challenges have you faced in aligning culture with customer satisfaction? Let’s continue the conversation in the comments below.
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This month we’re focussing on Cultivating Company Culture, with this being the second article in the series. The first, should you wish to review it, is:
“Defining Company Culture: Building a Foundation for Business Success”
Stay tuned for further insights in our series of business tips or, better still, subscribe to my blog and receive the latest articles automatically, simply by clicking here.
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Related Posts
If you’d like to learn more about sales effectiveness, leadership and the areas we’ve covered here, the following articles and posts might also be of interest:
- “Company culture matters. How management chooses to treat its people impacts everything for better or for worse.” – Simon Sinek
- “Happy employees lead to happy customers, which leads to more profits.” – Vaughn Aust
- Transform Your Business: The Power of Exceptional Customer Service
- Establishing Your Values – “Values are like fingerprints. Nobody’s are the same, but you leave them all over everything you do.” – Elvis Presley
- Leading with Confidence: Mastering Communication to Inspire and Unleash Peak Performance
- “Train people well enough so they can leave. Treat them well enough so they don’t have to.” – Sir Richard Branson
- Building Your Dream ‘A-Team’ – Hiring A+ Talent
- Onboarding Excellence: Unlocking the Full Potential of Your New A-Team Hires
- Leading a Fearless Business: Boosting Growth and Profits
- Leadership Alignment: The Key to Turning Vision into Reality
- From Good to Great: How Employee Recognition Can Transform Company Culture
- Mastering Continuous Improvement: The Imperative of Effective Leadership in Driving Success
- The Power of Accountable Leadership
- The Power of Accountability in Business Success
- Does Your Business Strategy Match Your Company Culture? The Risks of a Mismatch
- 10 Principles for a Sustainably Excellent Culture – Beginning With “We”
- How to Ruin Your Reputation and Brand – Lessons from Turkish Airlines
- Silicon Valley Bank – Did its Leadership Cause the Collapse? – Accountability in Corporate Failures
Backgrounders
HBR – Engaged Employees Create Better Customer Experiences
Fast Company – Why an employee-centric company culture is key to success
PwC – Future of Customer Experience
McKinsey – The human touch at the center of customer-experience excellence
Gallup – State of the Global Workplace
Flatworld Solutions – 6 Ways in Which Culture and Brand Affect Client Experience
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