"Satisfying no longer" Quirk’s Marketing Research Review, August 2009, p. 55
Of all the problems with traditional customer listening programs, there is only one thing the authors claim will thoroughly corrupt a program – tying feedback scores to corporate incentive plans or compensation. This may seem counter-intuitive. Including customer scores in an incentive program helps focus the organization on customers, right? Ideally, yes. Practically, not so much. It focuses the organization on the score, but not usually on the customer.
The authors provide three key reasons why tying incentives to customer feedback scores is dangerous:
- The goal of the survey shifts from pleasing the customer to pleasing the organization. If you currently use survey scores in your incentive plan, consider how much time you spend setting, explaining and defending the goals. And this time increases exponentially if you miss a target, which is exactly when you should be talking to customers to see why scores are down instead of defending the numbers internally.
- Those responsible for the survey become the "police" instead of the "partners." The time you spend with internal stakeholders is more often focused on defending the metrics and methodology than on helping the organization internalize and act upon the customer feedback.
- You actually give executives an incentive to question the research and results. Making it part of the compensation plan brings high-level attention to the customer survey, but actually encourages executives to question and nit-pick the details instead of focusing on the big picture.
One key way to motivate an organization around customer feedback is to illustrate the impact of taking action on customer feedback. We often think of this as a statistical linkage such as "improving loyalty by 5%, will increase revenue by 2%." That type of business impact analysis is definitely important and useful. But it’s equally useful to have a customer service department that listens to their customers’ complaints, fixes a process, and realizes a 10% decrease in cost. Until we can illustrate the real business impact of using, acting upon, and improving customer perceptions, we will always have a problem motivating people to take it seriously.
I don’t have many other solutions to share here, but I will post follow-ups with any ideas that are generated by this topic. Until then, think carefully about what you can do with your customer feedback program to motivate your organization to listen. Part 3 of Murphy and Goodwin’s series provides some helpful answers.
Troy Powell, Ph.D.
VP, Statistical Solutions