A collection of articles written by Customer 1st

Use Service Metrics to Drive Customer Centricity

18th July 2011 | Posted in Service Metrics

Having an intention to achieve improvements in customer service is only a step on the road towards embedding customer centricity throughout all levels and areas of a business. Many of today's companies include customer service in their corporate mission and vision statements, and many also strive to deliver good service to customers during those all-important interactions and touch points. However, when we look at the end results—what customers actually think of the service they receive from modern businesses—it seems that the desire and intention to do well is not always (or maybe not very often!) matched by the reality for the customer.

I firmly believe that customer service excellence is all about aligning performance management with strategic intentions. A company must embed a clear understanding of the importance of doing a great job for customers throughout the business and, in particular, into its people and processes. I mention people and processes for a good reason: people on staff must live and breathe customer service, because they are the link between the customer and the business; processes are equally vital, since they guide employees in how to conduct their interactions with customers and how to deliver what the customer has purchased.

The day-to-day work of senior managers, middle managers, team leaders, and team members needs to be bound up with customers, rather than customer service being an add-on or nice-to-have. To succeed at customer service—and as a consequence, at business—the organisation should be obsessed with delivering the best possible service to customers. While that may sound extraordinary, if you think about it, you will realise that customers truly are the single most important element in the success of a business. They, possibly more than anything else, affect the bottom line.

Financial measures, growth targets, and market share are all important, but without a healthy base of loyal customers, a business is never doing more than trying to make do and mend—that is, making adjustments to the operational activities in the business in the hope that the result will be a slight improvement to sales, profits, or growth. If some of today's big companies were to focus on their customers and conduct their activities with the (almost) sole intention of enhancing customer experience and increasing customer loyalty, the rest would not necessarily simply follow, but it would certainly become a lot easier to meet monthly financial performance targets.

Motivating Through Metrics

As Frederick Reichheld and Paul Rogers said in their Harvard Business Review article, “Motivating Through Metrics,” “Getting the right people on board—and then all enthusiastically pulling in the right direction—has bedevilled organizations since the time of wooden ships, when the most popular form of motivation left lash marks. Today's corporate helmsmen may be more enlightened, but they still face the same challenge. How can a company transform its frontline crew into a meritocracy that pulls together?”

The question becomes, how actually do we achieve the intense customer focus and the market-leading customer experience that we have said we want as a business? The answer is service metrics—performance management, directed throughout the whole organisation, towards improving service for customers, and thereby (but not automatically) benefitting the organisation's bottom line. Service metrics must become as important as the other, more traditional metrics.

Also according to Reichheld and Rogers, “…Some companies have addressed this problem by tying rewards to team performance and putting customers and employees, rather than bosses, in charge of performance rankings…All link frontline performance rankings to customer and peer feedback, not just to productivity. And they use simple metrics that can be applied to compensation, promotions, and career transitions.”

Of course, in addition to the right metrics, companies need service-driven policies and processes. Clear and effective customer-focused policies need to be in place for all aspects that touch customers, including in particular:

  • Target- and objective-setting for teams and individuals
  • Measuring customer expectations
  • Measuring customer satisfaction
  • Contract management with high-value customers
  • Service recovery processes
  • Delivery of products and services.

Leaders and managers in an organization set a strategy for customer service. This ensures that customer expectations and levels of satisfaction are measured and monitored. The overall role of leadership is to enable the organization to become an excellent service provider to increase customer loyalty—a key driver of business success. Leaders need to lead by example, making both internal and external customers a priority in their own work.

The resources of an organisation, including its people, must be properly allocated in the interests of its customers. Its people have to be effectively recruited, trained, and supported so that they can deliver excellent service to both internal and external customers. Management of customer service must be set through an effective organisational structure. This needs to provide a high-level focus for customer service, allocating responsibility to managers and team leaders, ensuring that, through their teams, customers' needs are given a high priority.

Having the right metrics in place—service metrics—is the essential foundation to building a genuinely customer-centric company.