Marketers are rediscovering that strong customer relationships are essential if companies want to avoid the downward spiral into commodity status that comes from competing on price alone. Throughout the halls of corporate America, banners proclaim programs such as "Putting Customers First," being more "Customer-Centric," or "Becoming a Customer-Focused Organization." These initiatives may be part of a culture change or a back-to-the-basics effort. However, according to the American Customer Satisfaction Index, published by the Institute of Social Research, only a handful of such programs succeed on a sustained basis.
Why? On the surface, these programs may appear well-designed. Companies measure their customers' perceptions and satisfaction levels, compensate employees on improving satisfaction scores, and then teach employees the best approach to interact with customers.
But even if these steps are well-executed, "customer-centered" efforts often encounter serious obstacles. For a company to truly put customers first, it must focus all its processes, systems, infrastructure, policies, and practices on that goal. The problem is, too many organizations are structured in ways that hinder achieving world-class levels of customer engagement.
Indeed, several organizational roadblocks serve as "engagement killers." This three-part series of articles identifies different types of roadblocks, assesses the damage they cause, and outlines practices that help organizations become truly customer-focused. The first article addresses typical people-management challenges, and ensuing articles will focus on performance measurement roadblocks and review how aligning strategies and practices can help institutionalize optimum behaviors and outcomes.
Roadblock 1: Ignoring the importance of talent in delivering services
All of us, as customers, have listened to an apathetic employee blandly reading canned notes while ignoring what we're saying. An unfriendly salesperson or customer service representative can't be given a personality upgrade simply by being required to read from a script or by attending a half-day seminar on listening skills. A service rep won't become a caring consultant by reciting a list of suggested questions and responses; the exact same dialogue or behavior that thrills one customer may simply annoy another. Traits as fundamental as warmth and friendliness cannot be trained.
Sure, employees can learn a company's product lines or services, but employees' talents are innate and enduring. Given this, a company can avoid the futility of trying to train someone to be empathetic or assertive or to use a "natural smile" by hiring the right type of person in the first place. If engagement levels are strengthened when customers interact with employees who possess certain talents, why not hire people who have those talents?
But hiring people with the right talents isn't enough. As former 3M CEO William McKnight said, "If you put fences around people, you get sheep." Companies must also trust their front-line employees to react to situations and use their talents to meet customer needs. Companies that trust their employees to do the right thing must have the right outcome-based measurements and incentives in place. They also need to have enlightened supervisors and faith in the individual.
Putting in talent-based hiring and development programs will net companies nothing if their employees aren't allowed to use their talents to create customer engagement. Companies that trust employees to use their talents have benefited from higher sales, lower turnover, and greater efficiencies; businesses that don't trust employees to use their talents often see their best employees walk out the door.
Roadblock 2: Rewarding steps, not outcomes
Employees at a California car dealership were told by top management that buyers who established a personal relationship with the service department manager were more likely to return for service. This was so important, in fact, that the question "Were you introduced to the service department manager?" was added to the after-sales survey. As a result, the dealership's salespeople were instructed to make sure the car buyer met the service manager. So customers who picked up their cars on Sunday, when the service department was closed, were introduced to a life-sized cardboard cutout of the service manager, wearing a hard hat and a smile, with his cardboard hand outstretched.
The reason for this absurd behavior is simple: The salespeople received a large bonus if their customers answered yes to all the questions on the survey. Consequently, salespeople focused on meeting the survey requirements instead of providing outstanding service or encouraging return service visits from their customers.
Other examples -- less absurd, yet clearly misguided -- abound. For example, in one call center, the customer "service level" was defined as ending the customer interaction within 20 seconds. This encouraged service representatives to transfer or wrap up calls as quickly as possible, regardless of whether they had met the customers' needs. The end result was that what the company defined and rewarded as excellent performance generated negative reactions from customers.
In spite of their good intentions, miscues like these perpetuate poor service. The way to avoid these traps is to remain focused on customer service, but from the customer's point of view. If the goal is a return service visit, companies should reward employees only if the buyer returns for service. If the goal is increased product use after a customer service contact, then employees should be rewarded if customers continue using the product. Companies that take the right approach to managing performance encourage customer-facing employees to use their talents to serve customers by resolving their problems.
One forward-looking financial services company is eliminating a complicated internal monitoring system with hundreds of pages of reports. They're replacing it with a performance management system that rewards employees who provide superior customer service. The new system not only saves the company money, it also aligns employee behavior with desired business outcomes.
Roadblock 3: Rewarding the right behavior the wrong way
In many sales organizations, salespeople who demonstrate world-class performance and build the strongest customer relationships are often "rewarded" by being promoted out of the jobs they do best. All too often, great sales reps become managers or corporate marketers, regardless of whether they have the right talents for those roles. Similarly, outstanding customer service reps become supervisors, then department managers, because that's the only way to earn more money or prestige. One call center we know of had 11 layers of management -- a system that evolved in part as a way to reward outstanding performance. Ironically, reps who were the best at working with customers were literally 10 times removed from ever speaking with a customer again.
Many companies operate in a feudalistic system in which "serfs" are those with non-exempt roles, "knights" are the salaried class, and managers become "lords" -- while all of them kowtow to the "kings and queens" of the executive staff. In these systems, the lower classes are always paid less and have less prestige than those above them, regardless of their contributions toward achieving the organization's goals. In these companies, the only way to improve your lot is to move to a higher level and have as many people as possible below you -- even though that could mean doing a job that doesn't match your talents.
Smart companies understand that employees don't necessarily need to become managers to grow. In this model, employees who work hard and excel at their jobs have other ways of earning more and gaining additional prestige without leaving their roles or managing others. In many cases, career growth within the role could mean that an employee earns more and has more "perks" than his supervisor, if his contribution justifies this.
Should the number-one sales representative in a company earn more than a district manager who is not very successful at engaging his reps? Should a customer service representative who is twice as productive and customer-focused as her peers earn more than a mediocre supervisor? If a company is willing to answer yes to these questions, then it becomes much easier for it to leverage employees' talents to achieve desired business outcomes. And the company's most productive contributors won't have to be promoted out of a role just when they are hitting their stride.
Roadblock 4: Good competition turned bad
Competition is a good thing. It makes people work harder, energizes workforces, and creates opportunities to celebrate. In the end, everyone benefits from healthy competition. In some cases, though, rivalries can turn toxic.
For example, one sales district discovered an effective approach to identifying customer needs. However, the salespeople didn't share that best practice with their peers in other districts because there was absolutely no perceived benefit to them; their goal was to be the number-one district. Similarly, in a company with multiple call center locations, one location attempted to look more productive by manipulating its scheduling forecast. This shifted a disproportionate share of call volume to them at the expense of another location.
Again, these problems occur when employees fail to focus on creating value for the company and the customer. Clearly, if one or two employee groups outperform others, managers should aggressively look at why those groups are excelling, then apply their best practices across the organization. Are the groups more productive because their employees are more engaged? And if so, why? Have effective programs, support systems, infrastructure, or other initiatives been put in place? Could other groups benefit from implementing them?
For one company, the silos broke down when the company implemented enterprise-wide goals in addition to department-specific goals. No one wins if the organization as a whole does not make progress, so employees and workgroups that developed best practices and shared them are now heralded as heroes.
There is a common theme in this column: Customers are individuals with unique needs. And, employees are individuals with unique talents. Instead of fighting this reality, embrace it. The conventional approaches to managing people work against human nature. Organizations that focus on business outcomes and manage employees to achieve those outcomes are on the road becoming truly customer-focused.