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We can track, watch and measure the results of our marketing activity more than we have ever been able to before. (When I started in marketing – it was a big idea to put a coupon in a print adjust so we could track the responses.) Organisations can measure the lifetime value of a customer, (apparently, Disney knows that the average family of four who visit one if its parks will spend on average $50,000 with them during their lives.) If you know the value of a customer – you can then work out what you are prepared to spend on creating a purchasing experience for them. We can measure word of mouth and even lifetime employee value. Systems have made this possible.

Was it Jim Collins who said, “What gets measured gets done.”

Professor Alex Edmans from the Wharton school has just completed a study to establish a greater understanding of the ROI of building an engaged workforce. There are many fine case studies that anecdotally prove this. But he wanted to prove it statistically. So he has looked at the Fortune Magazine’s “Best Companies to Work for in America”* since 1998. His findings compare these organisations to those in the same industry and he found ‘They earned 14% per year better over 1998-2005, which was double the market return for similar organisations.’

Interestingly he did not measure profit – he looked at these companies market value. He said that if a business is profitable it would often lead to employee engagement. (People like working for winners). So he could not prove the cause. He did bemoan “markets often misvalue intangibles even when publicly and independently verified.”

People are often motivated when they feel that their efforts are towards something bigger than themselves.

He quotes John Bowen an investment manager as saying “Happy employees make for happy customers, which in the long run is ultimately reflected in the share price.”

Sounds pretty familiar to me.

• The ‘Best Companies to Work for in America” study is conducted by the Great Places to Work Institute. Two-thirds of the study is based a 57 question confidential survey and a third is based on the institute’s independent review of the firm’s policies. Companies were scored in four areas: credibility, respect, fairness, and pride/camaraderie.

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