Employee Engagement for Superior Customer ExperiencesContinued from Business Management magazine.
Emphasize the Customer's Well-Being in All Decision-MakingDecision-making can be complex, with multiple constituencies to consider: customers, shareholders, competition, executives, peers, personal career path, etc. Hence, it's all too easy to fall into the trap of compromising customer relationship strength by favoring another constituency in tactical and/or strategic decisions, at all levels of the company. Only 60% of companies regularly consider how a proposed action increases or decreases customer trust when making decisions, despite widespread agreement that customer trust is tied to the financial success of the business.4 The primary reason for consistently putting customers first is that they do indeed make payroll possible. Typically, when priorities are aligned with customers first, and other constituencies secondarily, the intended outcomes for other constituencies follow naturally, and more healthily for all involved.
Imagine Customer Presence. There's a common saying that applies to customer-centricity: out of sight, out of mind. What better way to transform your culture to truly customer-centric ways of thinking and doing, than to invite your customer to attend all your discussions? This has long been a practice at Amazon, since founder Jeff Bezos once started an executive meeting by announcing that an empty chair at the table represented "the customer". Throughout the meeting, the executives were compelled to include the customer in their thought process, and to consider their comments' implications on the customer, as if "he/she" were present.9
This practice became a habit at Amazon, part of their corporate culture. CTO Werner Vogels explains: "It's very important to have a culture where everybody understands what the core values of the company are. New starters are often surprised at how important focusing on the customer is to us and how good Amazon is at doing that. ... We often have meetings where we start off with a 'customer voice' — a success story, even sometimes a negative story, of a customer's experience of buying on Amazon - and use those stories to drive our services to become better. ... We want to be the most customer-centric company on the planet."10
Do customers confirm your customer-centricity? The elusiveness of true customer-focus is evident in several studies, such as Accenture's Delivering the Promise study, where 75% of surveyed executives viewed their customer service as above-average, while 59% of their customers reported their experience with these companies' service as somewhat to extremely dissatisfying. Another example is CMO Council's Customer Affinity study where half of companies said they're extremely customer-centric, but when customers of those companies were asked, only a tenth of them said those companies were extremely customer-centric, but when customers of those companies were asked, only a tenth of them said those companies were extremely customer-centric.
Weave customer-focused decisions into your culture. To what extent do you emphasize customer-focused decision-making in your processes for annual operating plans, operations reviews, staff meetings, performance reviews, and other rituals in your company? Make a concerted effort to incorporate customer-first thinking and discussions in all of these business processes, and you'll see a monumental increase in customer-focused employee engagement. Audit your customer programs to identify what's-in-it-for-me (WIIFM) from the customers' perspective. Create a ratio of WIIFM for your company versus WIIFM for customers, both short-term and long-term, and make adjustments that strengthen the customer relationship from the customer's perspective.
Leaders are on an ongoing customer-centricity journey. As Amazon exemplifies, building a customer-focused culture is an ongoing journey. This journey is called internal branding, where outside-in thinking is integrated into the job of everyone company-wide, managing their personal impact on customer experience. Top-performing companies in customer service, according to BusinessWeek's list of high-performers from JD Power & Associates' recent studies, are: Amazon, USAA, Jaguar, Ritz Carlton, Publix Super Markets, Zappos, Hewlett-Packard, T Rowe Price, and Ace Hardware. These companies are well-respected on several dimensions, demonstrating that it pays widespread dividends to put customers' well-being first.
Challenge your organization to follow their examples. Invite your "customer" (even in your imagination) to attend all your discussions company-wide, and see what a difference it makes in transitioning to outside-in thinking that results in actions your customers would agree are in their best interest. In the meantime you'll be building customer affinity that translates to sustainable market leadership.
Monitor the Quality of Customer InteractionsWhile surveys have long been in place for most companies, only 31% of marketing executives report that their company takes customer listening seriously, and just 38% of companies are gathering customer insight from customer engagement situations.11 This means that companies willing to adopt a disciplined approach to customer experience management may enjoy significant competitive advantages by being first and best at monitoring and improving the quality of customer interactions.
Monitor the customer's world. A customer satisfaction survey typically provides essential yet insufficient insight on the quality of customer interactions. Some surveys focus on the overall relationship, while others measure the effectiveness of transactions. User groups and advisory boards often focus on future offerings. There may be multiple influencers on purchase decisions, and the sentiment of each influencer should be monitored, to paint the whole picture of your status with customers. Social media monitoring provides a window to customer interaction quality among those who are vocal. Call center logs and complaint lines are also very important sources of customer experience feedback, yet not often used company-wide.
In nearly every case, these feedback mechanisms and forums are designed around the company's world, rather than the customer's world. "For any given job [i.e. purchase], customers collectively apply 50 to 150 metrics to measure how well the job is getting done", says Anthony Ulwick in his book, What Customers Want. Hence, the best way to monitor the quality of customer interactions is to use customers' inherent measurements of goodness rather than the company's measures of goodness.
Embrace constructive feedback. Many firms that measure customer satisfaction emphasize the positive and de-emphasize the negative responses. Lack of processes and comfort levels for digesting and acting on constructive feedback can leave a company vulnerable to severe consequences. One out of two companies (44%) acknowledge that high-profile negative customer experiences have at some time compromised their brand, yet only 29% have high ability to handle and resolve customer complaints.4 Make it safe for executives and employees to receive less than stellar results - as long as they diligently improve. A motto such as this one may be useful in establishing curiosity rather than fear: Good news is no news; no news is bad news; bad news is good news.12 Make it part of your culture to look at negative feedback from customers as early warning signals, and, as the old saying goes, turn lemons into lemonade.
Virgin Mobile measures call center customer satisfaction on a five-point scale and looks at the top-two box (4-5) and bottom-two box (1-2) scores, with emphasis on the latter. Dennis Weikle, Vice President of Customer Care, explains: "When customers are satisfied, that's great, and we certainly work to continue doing what we're doing well. We've found the bottom box is indicative of churn and negative word-of-mouth, so we built a customer advisory group to look at survey results on a real-time basis, hour by hour, to identify what went wrong, and turn the wrong into a right. We also categorize feedback by call center skill issues and by business operations issues, and drive improvements accordingly. We call customers to acknowledge the issue when a poor rating is given, and find that people are surprised and pleased with the personal attention and commitment to resolution. We're fortunate to have good customer experience commitment across the business groups to take action immediately. We are consumer champions, and that's how we hire and orient employees, with tops-down and bottoms-up walk-the-talk. We try in everything we do to anticipate impact on the customer, and over the past year we've seen the bottom-box volume shrink in half."13
Transparency spurs employee engagement. It's common for survey results to be shared with a select set of executives and employees. Remember, out of sight, out of mind. Let every employee see their impact on customer experience. Only 42% of companies use a dashboard of commonly-agreed-to metrics that define success. And just 24% have created a multi-year set of agreed-to-metrics to assist executives in measuring & monitoring customer satisfaction, retention and profitability.14 These low statistics indicate differentiation opportunities for companies that decide to stand out from the crowd by implementing holistic, highly visible, and readily accessible measures of customer interaction quality.
Focus on leading indicators. Survey results measure what the customer already experienced, so they are lagging indicators. Teams can improve the quality of customer interactions only by focusing on metrics tracking the progress of their survey results action plans. These action plan metrics are leading indicators of customer sentiment and business results because they can be observed and constructively managed by teams before customers have a chance to evaluate the results of the action plans. Well-aligned leading indicators can be predictive of future customer sentiment and market performance.
Recognize Employees for Improving the ExperienceHumans, as well as all living things, align their behaviors with the rewards in their environment. For example, only 42% of companies agree that they can do what is right for customers despite the pressure to make current-period financial numbers. Interestingly, the same number of companies are actually using customer metrics to evaluate organizational performance.15 To engage executives and employees in customer experience management, walk the talk, and put your money where your mouth is.
Most rewards we respond to are invisible. There is a wide spectrum of influencers on human behavior, spanning a simple smile of approval, to a sixth sense of what gets you ahead or penalizes you, to fabulous attention and monetary increases. All of these influencers should be included in a change management strategy for employee engagement for superior customer experiences. Intrinsic rewards (e.g. meaningfulness, choice, competence, progress) are much more powerful than extrinsic rewards (e.g. prizes, money) in our contemporary society. As Colin Shaw points out in his book, The DNA of Customer Experience, emotions account for over 50% of an experience.
You get what you reward. Only 30% of companies are using customer metrics (e.g. profitability, campaign response) to evaluate individual performance. The same number of companies align incentive compensation to customer metrics.14 Among those companies that do tie compensation to customer experience, employee behavior often does not match what was intended. For example, using customer satisfaction surveys as a basis for the employee bonus program often leads employees to coach customers to help them get their bonus by giving them a highly satisfied rating. When the survey results are reported, how much confidence can the company have that the survey is valid? Coaching negates the value of the survey, and of the bonus program as well, making them largely a waste of effort, time and money for all parties involved. Instead of tying compensation heavily to survey results, tie it primarily to leading indicators: action plan progress metrics.
Let employees toot their own horn. At Applied Materials I managed a self-reporting team recognition program, which guided employees in expressing their achievements according to established categories and criteria designed to strengthen customer focus in the company culture. Both formal and grass-roots teams get constructive feedback from a panel of executives, which enriches their projects and team satisfaction, and has resulted in thousands of hours and millions of dollars in savings for the company and customers alike. An online user interface gives employees worldwide easy access and visibility to lessons learned for synergy and knowledge management. The program is evaluated by company-wide participation and participants' satisfaction, with continual improvement over the years, evolving from a variety of problem resolution categories to exclusive focus on problem prevention for superior customer experience.
Recognize desired behaviors and outcomes incessantly. To weave employee engagement for superior customer experiences into the fabric of your culture, don't wait for end-of-quarter opportunities to express gratitude for stellar performance. Help your employees make CEM a habit by reinforcing what you like when you see it. Be sincere. Be creative in expressing your appreciation. Involve employees in recognizing their peers. Recognition can be contagious and buoyant.
Engaging Employees in Superior Customer ExperienceCoca Cola Enterprises' Director of Global Employee Engagement, Ashley Jensen, says "Enagement is an employees connection and commitmentto a company. Engaged employees bring more to work each day, and are better able to build customer relationships. A study by Powers Watson shows that companies with engaged employees financially outperform lower engagement workplaces, with 5.75% difference in operating margin, and 3.44% in net profit margin. We see engaged employees driving business performance. And as levels of engagement rise, so do levels of customer satisfaction. Among our 72,000 employees worldwide we have 600 engagement champions to connect employees to the company's four strategic initiatives, one of which is Customer Focus, in our quest to be considered a high-performing benchmark company."16
Use these best practices to establish your customer experience management strategy:
- Consistent and vivid image of customers company-wide.
- Customer-focused decision-making.
- Monitoring of customer interaction quality.
- Recognition for customer experience improvements.
Lynn Hunsaker is head of ClearAction, and has developed and managed customer experience programs for more than half of her career, in executive roles such as Head of Corporate Quality, Director of Marketing and Business Development, and Customer Experience Improvement Manager at Fortune 250 companies. ClearAction seamlessly augments existing programs and identifies opportunities to boost your return on investment in customer experience management, specializing in customer experience innovation and customer-centric employee engagement.
1State of Customer Experience, Forrester Research, 2010.
2Creating an Army of Brand Ambassadors, Marcus Evans Internal Branding Conference, 2010.
3Obstacles to Customer Experience Success, Forrester Research, 2008.
4Giving Customer Voice More Volume, CMO Council, 2009.
5Operationalizing Customer Intelligence in the Contact Center, Business Communications Review, 2007.
6Invisible Innovation: Process Improvement for Customer Experience, ClearAction, 2010.
7Employment Branding & Employee Engagement in a Downturn & Connected World, Marcus Evans Internal Branding Conference, 2010.
8Customer Experience Management Benchmark Study, Strativity Group, 2009.
9The Best Service is No Service - Updates & New Evidence, IIR USA Customer Uninterrupted Conference, 2009.
10King of the Jungle, Business Management, Issue 16, 2009.
11Turning Customer Pain into Competitive Gain, CMO Council, 2009.
12James C. Morgan, Chairman, Applied Materials Inc.
13Improve Customer Experience Results by Enhancing Operations, BlogTalkRadio Customer Experience Optimization, 2009.
14Customer Experience Management, Aberdeen Group, 2008.
15Customer Experience Maturity Monitor, Peppers & Rogers Group, 2009.
16Employee Engagement & Customer Focus, BlogTalkRadio Customer Experience Optimization, 2010.
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Customer Retention Payback
- 20% of customers typically generate 150-300% of a company's total profits; 60-70% of customers break-even; 10-20% of customers lose 50-200% of total profits.
- Retention of customers with highest profit stream potential can grow company profit significantly.
- Increasing customer share-of-wallet (rather than loyalty) is a better measure of success than attempting to be sole supplier to variety-seeking customers.
- Employee morale and engagement can improve customer experience only when the company enables it through "policies, practices and procedures, and ways of rewarding, supporting, and expecting the kinds of behavior that yield quality and customer satisfaction." (Loyalty Myths, p. 212)
- Twice as many people are told about a bad experience than they are about a good experience.
- 50% of consumers will complain about a problem; in B2B, 75% of customers will complain to a front line person.
- The ratio of cost to win a new customer versus retaining a current customer varies from 2 to 1 to 20 to 1.
- 20% of dissatisfaction is caused by employee actions, 40% by corporate products and processes which have an inherent unpleasant surprise for the customer, and up to 40% are caused by customer mistakes or incorrect expectations.
- More info on the above statistics
Learn how to calculate customer retention business results for your company.
Customer Experience Persona
To build common language and vision for innovating toward desired end-results, development of customer experience personas is essential. A persona describes the customer's perspective of total value and total costs, representing the circumstances of their experience life cycle. "Personas foster empathy among the development team that empowers them to understand requirements with less detail and specification, make reasonable implementation decisions independently, raise valid concerns and opportunities, stay focused on the real requirements, and talk among themselves and with the rest of the company using a common language." (Rind, Pragmatic Marketing)
Learn how to develop customer experience personas for your company.
Learn how to use systems thinking in your company.
Self-Reporting Team Recognition
- Allow self-reporting by teams or individuals in a common database?
- Provide upward and horizontal visibility of teams' progress?
- Emphasize standard scoring criteria across a panel of trained judges?
- Enable learning via visibility to scores and constructive comments?
Learn how to use self-reporting team recognition in your company.
- D. Wright, VP-Service Excellence, Washington Mutual
"The cross-functional collaboration necessary to successfully manage the customer experience requires big picture, systems thinking. ClearAction brings very practical, well-thought out approaches to get the internal cooperation needed. ClearAction's real-world experience in process improvement is obvious."
- L. Sharp, CEO Religence and author of Customer Relationship Intelligence: A Breakthrough Way to Measure and Manage Sales and Marketing