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Five Trends We Can See From Examining the 2010 1to1 Customer Champions – Part 4

This is the fourth part of a multi-part series on the trends we are observing among the 1to1 Customer Champions with respect to their efforts to build a customer-focused culture.

In my last entry, I discussed how a company’s inclination to gather customer feedback interacts with its proclivity to act on that information to form how customers will view the company (in customer-orientation terms). The key constraining factor that any company will have in its efforts to act on customer feedback will be the orientation of employees. The 1to1 Customer Champions have a keen understanding of this, and it brings us to the fourth trend we have observed among this prestigious group:

Trend #4: Employees At All Levels Are Critical

This should not come as a surprise – we at Walker have been advocates of integrating customer and employee feedback for roughly twenty years. Over that timeframe, we have seen that the following best practices contribute to building a customer action framework that has long-term “stickiness:”

1)      You cannot communicate enough – I have never seen the results of an employee loyalty survey in which communication is not a driver of employee loyalty; several of the 1to1 winners clearly had a plan for how to frame the firm’s customer program, how to communicate its anticipated impact on both the company and its employees, and how to articulate what was expected from employees. However, this was not a one-time event – the best programs have an ongoing plan for employee communication, including not only status updates (similar to what are provided to customers), but also opportunities to publicly recognize and celebrate short-term wins and role model behavior.

 

2)      Do not assume that customer centricity comes naturally – The best companies are the ones that understand  most people have good intentions but may need help in converting intention to behavior. Many of the 1to1 Customer Champions talked about how they trained their employees to use the information to make customer relationships better. This includes providing tools and frameworks for taking action on the data.

 

This is a gap that we sometimes see with companies – they are willing to invest in designing, gathering and analyzing the feedback, but they fall short on training their employees on the use of the information.  As customer loyalty advocates, we are, to some extent, hardwired to think about how customer loyalty impacts customer behavior in an almost subconscious fashion. Not all employees share this intuition, which is not bad – they simply have a different focus. It is our job as customer advocates to help our fellow associates “connect the dots” between their day-to-day activities and the corresponding level of loyalty that customer exhibit.

 

One case comes to mind on this – our team worked with one of our clients to show the connection between software failure and customer sentiment. We are able to show that high levels of a specific type of product failure in one quarter was followed by lower overall customer sentiment in the next quarter. Making this connection not only helped the operational group understand how it impacts customer loyalty, but also provided a means to set performance targets in a manner that aligned with their day-to-day work.

 

3)      Make customer focus a part of everyone’s job, not just “one more thing to do” – I’ve written about this previously, but it warrants another mention – if we try to pile a customer-focus initiative on top of an employee’s existing work, the probability of failure is high. Here’s why – most employees are extraordinarily busy (particularly as firms have cut back on the number of employees in light of the recession); adding to an already heavy workload means that something will fall through the cracks.

 

A better approach is to audit workflows in each employee group and determine how the customer feedback can assist in the workflow (which is what we did in the software failure example cited in point #2 above). For example, leveraging customer feedback in the account planning process helps a sales associate achieve his/her key goal – to sell more.

 

4)      Linking customer feedback to compensation – Another theme is the notion of linking some portion of bonus compensation to customer feedback. This is not a step that should be entered into lightly – before implementing an incentive compensation plan, we advise clients to use the following questions as a litmus test on their proposed plan:

 

a.       Are the metrics we have selected valid? In other words, are we measuring what we really mean to measure? For a metric to be valid, it should have a clear connection between the metric and the firm’s financial success.

b.      Are the metrics we have select reliable and stable?  Reliable means that results are consistent – that is, they do not vary based simply on statistical whims. Stable means that the metric is not prone to wide fluctuations – this level of volatility is, by definition, difficult to predict and therefore will be less impactful in shaping behavior.

c.       Are the results achievable? Any incentive that is driven by an unrealistic or unreachable goal will lose impact and will be considered worthless by employees.

d.      Is our approach to gathering the customer feedback free of bias? This generally relates to the methods employed in sampling and gathering the feedback. How many times have you had a customer service interaction which culminates with a statement similar to this:

 

“…you may get a survey related to this experience; if there’s any reason you won’t give us a ‘5,’ please let me know.”

 

I had one experience in which an auto dealer, as a “convenience” to me, offered to pay me $25 if I would bring my survey to them – they claimed they wanted to make it easy for me to return my feedback. Do you think my skepticism was warranted?

 

The fear is, of course, that we will compromise the integrity of the metrics (i.e., their validity), which will result in artificially high scores that have no relevance to true customer sentiment. This not only will result in the payout of undeserved incentives, but it severely compromises our ability to use the customer feedback to predict future business performance – which is a serious problem.

Ultimately, we encourage clients to link customer feedback to incentives, but it has to make sense and be a part of an ironclad, defensible system of measurement.

Engaging and leveraging associates in the customer action process yields a more sustainable process, which in turn will reinforce the customer-focused nature of the firm’s culture. From a business perspective, this is the gold standard – building and maintaining a customer-focused culture will create a long-term sustainable competitive advantage that your competitors will not be able to easily replicate.

In my next blog, I will discuss some of the tools we can employ to help employees leverage the power of customer feedback in their ongoing efforts to take action in an efficient manner.

Mark A. Ratekin
Sr. Vice President, Consulting Services

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