No company’s customer base is entirely happy. No matter how good you may be, there are always going to be detractors—and there are often more of them than you may think. This possibility is threatening to executives down to the front line delivery people. After all their salaries, status, even their careers, can hang in the balance when customers are unhappy.
On the other hand, not knowing a customer is unhappy could result in even worse consequences when it takes its business elsewhere. Not knowing means there is no possibility of service recovery.
In the case of a professional services company (an ITSMA client), senior executives did not believe the feedback they received from the customer satisfaction interviews. As far as they were concerned, all of their customers were happy. We later discovered that the only reason they were doing the research was to validate their assumptions, not to find ways to improve. The research did in fact show that their customers were very satisfied with the services they were receiving—but not completely. In a few cases the research revealed pockets of unrest. But, rather than respond to the valuable information, this company chose to ignore it. Worse, they accused ITSMA of fabricating the results!
Why do some companies ignore feedback?
- A culture of fear and punishment motivates employees to keep their skeletons in the closet
- A bureaucratic quagmire prevents the results from making it to the middle managers and front line employees who can take action
- A lack of understanding of the power of an apology, even if the problem can’t be solved
Create a Customer-Centric Culture
What these companies lack is a customer-centric culture—a culture that puts creating an exceptional customer experience above all else. Here are some ways to foster a customer-centric culture:
Embrace feedback. Reframe customer feedback—whether positive or negative—as an opportunity to get better by making meaningful changes to improve the customer experience. Knowing is power; not knowing is hazardous.
Build visibility. Senior leadership, starting with the CEO, need to publicly declare that the customer experience is central to the company’s strategy. These declarations need to be made both internally and externally in newsletters, webinars, communications with Wall Street, customer conferences, blogs, online communities, and so forth.
Connect the dots. Link customer satisfaction and loyalty to strategic business metrics. For example, demonstrate how increases in customer satisfaction correlate with increased renewal rates or follow-on business.
Walk the walk. When evaluating the merits of business initiatives, senior leadership should analyze the impact on customer satisfaction and loyalty. Senior management objectives and bonus plans should be driven by customer satisfaction and loyalty performance.
Set goals. Incorporate a Customer Loyalty Index as one of the key metrics for managing the business. Report results regularly. Establish near-term and stretch goals. Keep the goals realistic and challenge the organization to achieve them.
Train. Many times people do not know what to do with the customer feedback. They need to learn how to talk to dissatisfied customers and do root cause interviews. They need to understand how they personally impact the customer experience as part of the end-to-end process in which they participate. They need coaching and one-on-one mentoring to reinforce desired behaviors.
Be proactive. While it is important to identify and fix problems, a singular focus on remediation can be detrimental. In addition to neutralizing detractors, companies also need to focus on how they can create advocates. Successful account management and service teams need to share their practices.
Encourage friendly competition. Tread carefully here. This can backfire if not handled well. The idea is to publish customer satisfaction and employee performance metrics to identify and recognize the standouts. Caution is warranted because the metrics are not always comparable. For example, geographic cultural difference will affect the magnitude of ratings more than the actual differences in the customer experience. Furthermore, too much competition with high stakes (real or perceived) can lead to backstabbing. Competition will only work if it encourages best practice sharing and collaboration.
Focus on the positives, not just the negatives. Celebrate the successes in addition to learning from failures. There is a lot to be learned from what is being done well. You need to expand your pockets of excellence. This is a very important role of the customer experience center of expertise.
Incent and inspire employees. While processes are important, there should also be incentives and measures in place to inspire employees to perform the processes well. This is a very important component of instilling a customer-centric culture. Underpinning this culture is a series of incentives based on customer satisfaction/ loyalty results. There many ways to do these; here are some examples from our research:
- Phase in incentives gradually to give the customer center of expertise time to work out the program kinks and for employees to absorb the changes
- Link financial incentives at all levels, but weight incentives differently for senior executives and front-line, customer-facing staff because senior executives have more direct control over loyalty and satisfaction
- Celebrate individuals who drive exceptional satisfaction ratings—e.g., a customer service hall of fame, special events, and prizes
Connect Feedback to Action
Almost all companies today ask for feedback from their customers. But many are not using the information to take action. Gathering customer feedback should not be an empty exercise—a check box activity to see which customers need their hands held for awhile. It should be a continuous, integrated process that enables companies to improve not just their satisfaction and loyalty scores but also improve the way they do business.