I wrote a while back on this blog about the bottom line benefits of improving customer experience – some useful comments on this too, notably from Don Peppers. But interestingly, more Bruce Temkin’s more recent posts have actually posed the question of whether improving Customer Experience really does bring financial benefit, and if so, how on earth do you start to measure the ROI of customer experience.. There is some very intresting, subtle thinking at play here, and very well worth a read. As Temkin suggests,
“think of it this way, what would happen to the financial health of your company if you just stopped interacting with your customers?”
He goes into a lot more depth than this though. And it got me thinking – how can you motivate a team, or a company, to home in on improving customer experience. Thinking back through my own experience of being involved in such programmes, what I have seen a lot of is people focusing on a distinct number, almost at the expense of all else.
All good human psychology – if you set a target, then you see certain behaviours. It’s been around as a motivational tool for as long as modern ways of doing business. But is it effective? That’s a whole different question. Take for example a leadership team who are targetted, and who have financial incentives, based on a certain customer experience target, like 10% improvement in NPS, or achieving 99% levels of first time resolution of customer-reported faults. What happens?
- Unintended consequences. Teams start to home in on fixing a problem to get to the magic 99% number. They tend to have a short time frame to see improvements, maybe 3-6 months. They start fixing processes with field engineers. Let’s take an example – engineers now have to ring ahead to let the customer know that they’re on their way to resolve the fault, so that they can be sure the customer is actually at home. A perfectly good idea, and one that immediately improves engineer effectiveness at resolving issues correctly the first time –because they just reschedule jobs where the customer doesn’t pick up the phone. Rescheduled jobs don’t ‘count’ as far as the engineers are concerned. So far so good, the numbers improve, the leadership team is happy. Until they see a spike in complaints (“the engineer didn’t show up and now you tell me the appointment is changed until tomorrow! What’s going on??”). Complaints are not counted in the measure – it’s another department. You tell me if you think this is a good customer experience…
- Manipulation. The more the leadership team looks into the 99% target measure, the more they realise that, well, actually, the measure shouldn’t include issues where it’s perfectly obvious that the end customer is at fault. If they phone in and haven’t actually tested the problem themselves, then we shouldn’t be held responsible, should we? So the team gets permission to change the measure. Immediate improvements result, because now about 15-20% of the reported issues now go away. The team looks like it’s delivering results. But do end customers really feel that way..? What if they just don’t know how to test the problem themselves…?
- Setting a target has a double meaning. You’ve set a target of 99%. That’s fantastic. You’re implicitly now saying that it’s ok to really annoy one out of every hundred customers because it’s just part of the measure. Of course no-one will actually ever admit to this, which is why it’s implicit. But it’s important – no manufacturing company would ever get away with this nowadays. Often I feel that customer experience improvement should start with looking at the really bad exceptions rather than the trends, because you’ll probably see much more that has gone wrong that way. I once had to look into a customer’s issue that had been escalated all the way to the CEO of one of my clients. Even a quick glance threw up all sorts of amazing miscommunications, loops and misunderstandings across all sorts of departments. But the fact that we were looking into this individual exception was seen as a distraction from the ‘true’ task of understanding the high level failure points and potential resolutions. Maybe it wasn’t… And maybe such exceptions are the real way to get proper customer, outside-in, insights
- Numbers just aren’t that motivational. I saw this brilliant video, The Surprising Truth About What Motivates Us, recently, which illustrated just what does and doesn’t motivate about financial gain. As soon as anything cognitive was involved, then financial or numerical gain had the exact opposite effect to what you’d have imagined… Food for thought.
So, maybe focusing on numbers isn’t quite the way to improve customer experience? Not exactly. There are lots of pitfalls to watch out for, which I’ve tried to expand upon, but there are also ways of doing it well, as long as you are focusing on the right number, everyone understands the measure, there is leeway (i.e. a band of performance rather than a precise number) and not too much in the way of negative consequences. As ever, Bruce Temkin has provided a really good summary of this here in terms of linkages to executive compensation.
All thoughts and insights / war stories welcome in your comments!