Investing is all about caring

Studies are evidencing that companies with high levels of customer satisfaction and employee engagement are generally outperforming their peers in the long run.

The most important question – and perhaps the only one – that CEOs should be asking themselves on a daily basis is whether their customers and employees are happy. It’s a critical question for investors to ask, too, when selecting which companies to include in their portfolios.

According to a PwC study, one in three consumers say they’d walk away from a brand they love after just one bad experience.[1] This is one reason why companies shouldn’t be complacent about their brand reputation – and why they should bear in mind that consumers have little patience for brand relationships that feel strictly transactional.

Indeed, a positive customer experience – in addition to good quality and a competitive price – is crucial in building loyalty and driving sales. It takes up to 12 positive experiences to make up for a single negative one,[2] and 68% of consumers are willing to pay more for a brand that’s known for great customer service.[3]

When it comes to employees, high engagement is a determining factor in a company's ability to attract and retain experienced, trained, skilled, and dynamic workers. People generally spend a third of their life at work, hence the growing amount of attention companies are paying to creating a pleasant working environment.

Tech companies, for example, have well understood this. It’s not so much a love of leisure activities that's led them to set up video games and ping-pong tables in their offices, but rather a continual effort to attract and retain the most talented employees.

According to Gallup, disengaged employees – which make up around two-thirds of the global workforce – have 37% higher absenteeism[4] and cost the equivalent of 18% of their annual salary.[5] In addition, companies with engaged employees outperform those with disengaged employees by up to 202%.[6]

Of course, achieving perfect customer satisfaction or employee engagement is a never-ending quest. But striving for that goal makes good business sense and can boost a company’s top and bottom lines.

Delivering benefits to society, too

At Carmignac, we believe in leading by example. We consider our employees to be our most important asset. We want them to be proud to work for our entrepreneurial, family-owned business and to live up to their full potential.

We also want to serve our clients to the best of our ability. That means aligning our interests with those of the people who have entrusted us with their savings. As a result, we invest most of our own company’s money alongside that of our clients in our investment funds. In other words, we have skin in the game. If our clients win, so do we. This is a cornerstone of our approach here at Carmignac and has been one of our values from the beginning.

A positive customer experience comes hand-in-hand with this approach, since we take care to accompany our clients in their investment journey and to steward their assets as if they were our own.

We recently set up a division devoted specifically to the client experience. Our marketing department works within this division. The goal is to identify ways we can continuously improve our clients’ experience at every stage of their relationship with us. For our employees, we have stepped up our efforts on occupational health and safety, engagement, and corporate culture, in order to make our firm a more gratifying place to work.

But we don’t stop there. The next step is for us to turn these beliefs into investment convictions. We are launching a new investment fund aimed specifically at the “social” part of environmental, social and governance?(ESG) investing. This fund is one of the few available that seeks to invest in companies with both superior employee and customer satisfaction levels in order to generate positive outcomes for investors and society.

Historical data show that companies able to maintain high levels of customer satisfaction and employee engagement generally achieve superior long-term outcomes. We are convinced this will become even more true going forward. Financial performance is important, but it’s not the only metric that matters. Our investment decisions should also strive to have a positive impact on society.

[1] Experience is everything: Here’s how to get it right, PwC, 2018

[2] “Customer Experience is the Future of Marketing,” Forbes, 2015

[3] Customer Service Expectations Survey, Gladly, 2018

[4] How Employee Engagement Drives Growth, Gallup, 2013

[5] Increase Productivity at the Lowest Possible Cost, Gallup, 2020

[6] Are Your Employees Motivated?, Dale Carnegie Training, 2019