Ken McLoughlin · 760-802-5426 · LinkedIn · Book a Call
The Flywheel Effect
ePSNPSEBITDAValuations
Engaged employees drive customer loyalty. Loyalty drives profitability. Profits reinvest in people.

Employee Engagement (ePS)

Gallup. "The Benefits of Employee Engagement." Top-quartile engaged teams show 21% higher profitability, 17% higher productivity, 24-59% lower turnover.

gallup.com/workplace/236927/employee-engagement-drives-growth.aspx

Gallup. "The Relationship Between Engagement at Work and Organizational Outcomes." Meta-analysis of 276 organizations. Business units in the top half on engagement nearly double their odds of success.

workcompprofessionals.com/.../MetaAnalysis_Q12_ResearchPaper.pdf

Gallup. "Well-Being in the Workplace and Its Relationship to Business Outcomes." Top-quartile engaged units produce 1-4 percentage points higher profitability.

media.gallup.com/.../whitepaper--well-beingintheworkplace.pdf

Gallup. "Employee Engagement on the Rise in the U.S." Organizations with highly engaged employees achieve earnings-per-share growth 4x that of competitors.

news.gallup.com/poll/241649/employee-engagement-rise.aspx

Customer Loyalty (NPS)

Bain & Company. "How Net Promoter Score Relates to Growth." NPS leaders outgrow competitors by 2x or more. NPS explains 20-60% of variation in organic growth rates.

netpromotersystem.com/.../how-net-promoter-score-relates-to-growth

Bain & Company. "Net Promoter 3.0." Harvard Business Review. NPS leader firms delivered median total shareholder return 5x the US median over a decade.

bain.com/insights/net-promoter-3-0

McKinsey & Company. "Experience-Led Growth: A New Way to Create Value." CX leaders achieved 2x+ revenue growth vs. CX laggards (2016-2021). CX improvements increase sales 2-7% and profitability 1-2%.

mckinsey.com/.../experience-led-growth-a-new-way-to-create-value

Forrester Research. "2024 US Customer Experience Index." Customer-obsessed organizations report 41% faster revenue growth, 49% faster profit growth, 51% better retention.

forrester.com/.../forrester-2024-us-customer-experience-index

McKinsey & Company. "Customer Experience: Creating Value Through Transforming Customer Journeys." CX optimization delivers 5-10% revenue growth and 15-25% cost reduction within 2-3 years.

mckinsey.com/.../customer-experience-creating-value-through-transforming-customer-journeys

EBITDA & Financial Performance

Bain & Company. "The Economics of Loyalty." Increasing customer retention by 5% increases profits by 25-95%. Referenced across Bain publications and Harvard Business Review.

Harvard Business Review. Markey, Rob. "Are You Undervaluing Your Customers?" January 2020. Short-term profit tactics erode loyalty and reduce customer lifetime value.

hbr.org/2020/01/are-you-undervaluing-your-customers

McKinsey & Company. "Best of Both Worlds: Customer Experience for More Revenues and Lower Costs." Improving customer journeys increases revenues 10-15% while lowering cost to serve 15-20%.

mckinsey.com/.../best-of-both-worlds-customer-experience

Forrester Research. "How Customer Experience Impacts Company Stock Performance." March 2021. Top 20% of CX Index brands had higher stock price growth and total returns than bottom 20%.

forrester.com/.../how-customer-experience-impacts-company-stock-performance

Harvard Business School. Hallowell, Roger. "The Relationships of Customer Satisfaction, Customer Loyalty, and Profitability." International Journal of Service Industry Management, 1996.

hbs.edu/faculty/Pages/item.aspx?num=4428

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