Willemijn van Dolen, Jos Lemmink, Ko de Ruyter and Ad de Jong

Marketing managers at many retail organizations know that satisfying customers depends to a great extent on the performance of the customer contact employee, especially in case the encounter between employees and customers is extensive. In this study, we examine the intricate effects of employee performance in such encounters in three innovative ways.

First, we focus on both the customer's and the employee's perspective of the individual encounter. Secondly, we investigate to what extent customer satisfaction is influenced by the employee's experience of the encounter and vice versa. Finally, we study whether customers' and employees' perceptions are based on their own unique experience during the encounter or that they are based on stable characteristics of the employee.

We conducted a survey in which employees and (multiple) customers evaluated their specific interaction in two retail furniture outlets. Both employees and customers evaluated the employee's performance during their interaction as well as their satisfaction with the encounter. Participants assessed employee performance on two key aspects: social competence and task competence. Task competence reflects issues such as product knowledge, fulfilling customer service needs and helping customers to achieve their goals, while social competence refers to those employee behaviors that foster interpersonal relationships and satisfy customers' emotional needs.

We found that both social and task competences of the employee are relatively enduring and consistent characteristics that are brought to every encounter. In other words, customers agree in their perceptions of the employee's performance and each employee is consistent in his or her perceptions of performance across several customers. Consequently, hiring and training policies for employees focusing on these competence profiles could be valuable strategies to enhance customer and employee satisfaction, contributing thereby to sales and employee success.

At the same time, we found that customers and employees are influenced by their unique perceptions of the encounter. As a result, management strategies focusing on the unique fit between the employee and customer might also be worthwhile. Matching customer and employee profiles might be a possibility to employ this. For new customers, matching may take place via on-line pre-registration. Returning customers may want to make an appointment with their preferred employee.

The study also found that customers and employees are influenced by the way the other thinks about the encounter. The customer is influenced by the employee's experience of social connection. This implies that the customer is interested in and cares about the employee; 'if s/he feels the interaction is sociable, I am happy'. Therefore, management of employee perceptions in addition to customer perceptions is important for firms.

The employee is influenced by the customers' perceptions of task and social competence. In other words, if the customer likes the performance of the employee, this increases the satisfaction felt by the employee. This indicates that salespersons are sensitive to cues of customers and are concerned about the customer's experience of both aspects of their performance.

To summarize, the influence of employee performance on customer and employee satisfaction is unique to specific encounter, but at the same time it reflects a stable form of employee behavior. Furthermore, whether the customer and employee are satisfied is determined not only by what they see of themselves, but also by the perceptions of those with whom they are interacting.