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Americans’ confidence in the U.S. economy remains alarmingly low. The highly charged discussions in Washington about the debt ceiling sent Americans’ confidence in the U.S. economy on a steep decline during July, according to Gallup’s Economic Confidence Index. In the week ending October 9, 75% of Americans said the U.S. economy is getting worse while 21% said it is getting better. These numbers are roughly the same as in recent weeks. Will the U.S. economy pick up steam or lose momentum as conditions deteriorate?
The sharp drop in economic confidence is consistent with the recent dip in the jobs situation, poor results for investors, and fears of a global economic slowdown. Even a recent decline in gas prices has not been enough to offset the drop in consumer optimism — possibly because overall gas prices remain more than $.64 per gallon higher than they were a year ago.
The key question is whether the U.S. economy will eventually pick up steam or lose momentum as conditions deteriorate into something more significant. Three out of four Americans saying the U.S. economy is “getting worse” suggests that many consumers may be wary of a double-dip recession.
This puts businesses in a tough spot. Many companies are scrambling to reposition themselves in the “new normal,” capture the interest of pessimistic shoppers, and create strategies to differentiate themselves and expand their market base.
The smartest companies, while welcoming any new customer, are actively courting patrons who are engaged or could become engaged. Gallup research has shown that fully engaged customers provide a 23% premium over average customers. And they buy more, stay with a company longer, and are more profitable — all of which are measures of security during an economic downturn. There are numerous ways to create engagement, and many of them are based on meeting customers’ emotional needs. It’s a smart strategy, and it works.
But leading-edge companies are doing something even more innovative — they’re finding ways to improve their customers’ wellbeing to ensure their own. “A lot of companies we work with are studying wellbeing very closely,” says Tom Rath, coauthor of Wellbeing: The Five Essential Elements and leader of Gallup’s workplace research and leadership consulting worldwide. “If you can show your customers that they’ll have better health if they purchase from you, that they’ll have better Financial Wellbeing because of you — those are unique and emotionally compelling value propositions.”
Wellbeing, according to Gallup research, is no simple thing. Having a good salary isn’t enough to guarantee wellbeing, nor is being healthy — and “wellness” is not the same thing as wellbeing. Rather, wellbeing is a construct based on five distinct elements. (See sidebar “The Five Essential Elements of Wellbeing.”)
The Five Essential Elements of Wellbeing
For more than 50 years, Gallup scientists have been exploring the demands of a life well-lived. More recently, in partnership with leading economists, psychologists, and other acclaimed scientists, Gallup has uncovered the common elements of wellbeing that transcend countries and cultures. This research revealed the universal elements of wellbeing that differentiate a thriving life from one spent suffering. They represent five broad categories that are essential to most people:
- Career Wellbeing: how you occupy your time — or simply liking what you do every day
- Social Wellbeing: having strong relationships and love in your life
- Financial Wellbeing: effectively managing your economic life
- Physical Wellbeing: having good health and enough energy to get things done on a daily basis
- Community Wellbeing: the sense of engagement you have with the area where you live
Gallup sorts respondents into three categories of wellbeing: thriving, or those with strong, consistent, and progressing wellbeing; struggling, or those with moderate or inconsistent wellbeing; and suffering, or those at high risk for low wellbeing. Gallup’s analysis, which included a review of decades of scientific research and a comprehensive study of wellbeing in many countries around the world, indicates that 76% of people are doing well in at least one of the five elements, but only 12% are thriving in all five.
Gallup also found that overall, about one in five customers are fully engaged while two in five are thriving. But only 1 in 10 are both fully engaged and thriving. Customers who are thriving are 1.7 times more likely to be fully engaged than those who are struggling or suffering.
In today’s economic climate, companies shouldn’t see those numbers as dry statistics; they should view them as an opportunity. If 79% of customers are not fully engaged and 61% are not thriving, organisations are not serving a significant number of customers as well as they could be.
Engagement and wellbeing
Though any company in any industry can engage customers, some industries do a better job than others. Gallup scientists have found, for example, that the automotive industry is most likely to engage its customers, and the airline industry is the least likely.
Wellbeing is personal, and employees and customers may not feel comfortable discussing it in a business setting.
Engaged customers aren’t necessarily thriving customers, and vice versa. “Engagement and wellbeing are clearly related, but they’re different overall constructs,” says Rath. “They help each other — in some areas more than others.”
So what would happen if companies focused on engagement and wellbeing deliberately and simultaneously? The research clearly shows that across the industries Gallup analysed, thriving customers are more likely to be engaged customers. It’s equally clear that engaged customers represent more value to an organisation. Therefore, because customer engagement is emotional and personal, caring about a customer’s wellbeing might be the best way to increase that customer’s engagement.
The question is, how can organisations accomplish this? “When you hear the word wellbeing, you probably don’t know what it means or what it consists of,” Rath says. “But knowing the dimensions of wellbeing is what helps companies take action.”
The language of wellbeing
Wellbeing is personal, and employees and customers may not feel comfortable discussing it in a business setting. Moreover, Gallup’s definition of wellbeing and its dimensions may be new to many consumers. For those reasons, businesses may not know how to begin discussions about wellbeing with their customers.
Rath suggests starting simply — with words. “Understanding and improving wellbeing starts with creating a language for your employees and customers so they know how they can influence it,” Rath says. “If your organisation wants to broadly improve the wellbeing of the people it serves, help your staff members understand what drives wellbeing.”
Start by explaining what wellbeing is and how it works. For employees, make the concept and language of wellbeing part of the workplace language in a way that makes it memorable. Next, incorporate that knowledge into the work itself. For instance, an HR manager’s job naturally lends itself to considerations of Career Wellbeing.
Using wellbeing to frame what an employee does and why and how he does it can make a difference. “If a great manager in a retail clothing store knows that little interactions improve wellbeing and knows that a sale is coming up that could save the customer money,” Rath says, “mentioning it to 10 customers a day could have a very positive effect on the brand.”
One of the benefits of thinking about wellbeing when working with customers is that keeping wellbeing in mind keeps wellbeing in mind: When employees think about customers’ wellbeing, they’re more likely to think about their own wellbeing. Engaged employees are more profitable, productive, and loyal. They’re sick less often and have fewer accidents. And public companies with high overall employee engagement enjoy higher earnings per share — and engaged employees tend to have higher wellbeing too.
That virtuous cycle is good for business. But if wellbeing can have an impact on customer engagement, it may well help companies reach the pinnacle of a customer relationship — when customers can say, “I can’t imagine a world without you” and mean it. When customers can strongly agree to that statement, your products and services have become irreplaceable to them.
For that reason, working with your customers to improve their overall wellbeing may be a unique way to generate an emotional connection and create that level of irreplaceability. And success can give you and your customers something to feel confident about.