McDonald's not-so-secret sauce that grows revenue by nearly 10%

A recent article in BusinessWeek described how store managers at McDonald's who engage both employees and customers can improve annual store revenues by nearly 10%.  In 2005, Gallup released a study conducted over a broad range of industries which found businesses that engaged both customers and employees increased their gross margins by an average of 26% over comparable organizations. Clearly, there are some very real dollars attached to the concept of "engagement".

So what is engagement?  A 2005 Harvard Business Review article titled "Manage Your Human Sigma" describes engagement as "emotionally satisfied" as opposed to simply being rationally satisfied.  Your employees are "engaged" when they are excited about working for their company and come to work each day purposefully trying to help the company succeed.  Your customers are "engaged" when they become evangelists for your company and proactively attempt to steer other customers your way. 

Two very different stories.The BusinessWeek article on McDonald's profiled a successful approach to engagement.  It also focused on McDonald's efforts to retain their talented store managers who are particularly adept at engaging employees and customers.  You can read the full article here.

An example at the other end of the spectrum is Kinko's, now FedEx Office.  If you've been a Kinko's customer for any length of time, you may have noticed gradually eroding service levels.  According to another recent BusinessWeek article, their profitability has been eroding too, with profits declining from $100 million in 2004 to just $45 million in 2007.  You can read that article here.

The Kinko's article references a 2003 Dave Chapelle skit that parodied poor customer service at Kinko's.  A video of the skit can be seen below.  (Warning -- while partially censored, some viewers may find the content to be very offensive.)

What can you do about it in your organization?  A good place to start might be using our free Customer Service and Employee Engagement Assessments to get a snapshot of your organization's capabilities.  We also offer a more in-depth Customer Service Alignment Assessment as well as an Employee Engagement Alignment Assessment.