Grow Your Business Through Superior Customer Experiences

Transcription

1 RESEARCH Grow Your Business Through Superior Customer Experiences By D. Randall Brandt, Ph.D., Vice President Customer Experience and Loyalty Research and Rodger Stotz, Vice President, Managing Consultant, Maritz Inc. Your customers experience your brand every day, with every transaction made at your retail units. With so many options available to the customer, their experience with your front line is a powerful differentiator. Yet how do you make sure your customer s experience at every opportunity is one that will generate growth? Listen to your customers, listen to your employees, and align those customer desires with employee actions through a powerful integrated approach that: customer satisfaction measurement and management for at least 15 years. 1 The idea is fairly simple: Use measures of customer satisfaction and dissatisfaction (and related voice of the customer data) to identify priority issues for improvement. Plan and implement efforts to address those issues, and then gather new measurements to determine if actions taken are having their intended effect. Apply this process on a continuous basis to monitor and manage customer experiences in ways that will lead to desired business results. Understands what customers value and what employees do to impact that Engages employees in planning and implementing improvements Rewards and recognizes employees for improvements Sounds simple, right? But when we asked readers of the Maritz Research Report to tell us what keeps you awake at night? the most frequently-mentioned topic was how to use customer feedback to drive performance improvement. This may seem surprising given the number of organizations that regularly gather surveys, comment cards, and other sources of customer data. But, based on our reader feedback, it appears that a large number of these companies are not satisfied with their ability to use customer feedback to improve performance and/or achieve desired business results. Integrating customer feedback into a continuous improvement process is the essential. Figure 1 Closed-Loop Process of Customer-Driven Performance Management & Improvement STEP 5 STEP 6 Reinforce & Reward Customer-Focused Actions Develop & Implement Improvement Plans STEP 1 Capture & Integrate Voice of the Customer Data Focus on the Relevant Business Enablers STEP 4 Analyze Data to Identify Customer Issues Determine Who is Responsible STEP 2 STEP 3 Continuous Improvement Doing It Right Throughout the latter half of the 20th century, W. Edwards Deming popularized the notion of viewing quality improvement as a continuous, closed-loop process. This same approach has been discussed in connection with

2 A recommended process of using customer data to drive performance improvement is illustrated in Figure 1. The first two steps capturing and analyzing customer data have been discussed by experts and practitioners over a period of many years. 2 Similarly, formal approaches to planning and implementing quality and process improvements have been the focus of countless books, articles, speeches, and seminars. 3 However, information regarding Steps 3, 4, and 6 in the above process is relatively scarce, and in our view, too many organizations neglect (or even skip) these steps. is to hand survey results and other customer feedback to managers, accompanied by a directive to use the results to take action. The consequences? Quite often no action is taken and/or the impact of actions taken is unclear. A Powerful Integrated Approach How do we avoid the no action trap and make sure you use your voice of the customer information to create a superior customer experience at the retail unit level? Let s look in more detail at understanding, enabling, and motivating as an integrated and continuous approach illustrated in Figure 2 below. Imagine the process illustrated in Figure 1 being comprised of only Steps 1, 2, and 5. In this reduced process, customer data are captured and analyzed in order to drive improvement. However, attempts to develop and implement improvement plans now begin immediately after customer issue identification and there is nothing to reinforce employees for changing their focus and behavior. Such an approach may yield favorable results, but it is hazardous for several reasons: Figure 2 Integrated Continuous Approach Insufficient detail regarding what the customer wants, needs, or expects may make it difficult to determine what actions should be taken. Responsibility for the customer issue may not be clear, which can result in no one taking ownership (or the wrong parties taking ownership), and ultimately, no action (or ineffective actions) being taken. Unless business processes or practices that directly impact the customer issue are identified, the organization may end up fixing the wrong things. Employees may not adequately implement the new processes and practices without well-designed reward and recognition plans that reinforce them for making identified changes. Unfortunately, this risky approach is more the rule than the exception. The practice in far too many organizations For each of your retail units, be sure you understand what your customers value, how your units deliver what your customers value, and how your employees impact that delivery. Following the collection and analysis of voice of the customer and voice of the employee to identify top areas of opportunity, it is essential to understand the issues in a way that focuses and directs action planning and implementation. It s not enough to know that customers are unhappy

3 about the associate s knowledge of your products to create meaningful action plans and improvements. Additional questions that will clarify and isolate the key issues include: What is the relationship between actual knowledge of products and customer-perceived knowledge of products? What is the relationship between customer-perceived knowledge of products and customer satisfaction with knowledge of products? Based upon answers to the preceding questions, what is the threshold of customer dissatisfaction with knowledge of products? How much elasticity is there around this threshold point? Do the threshold and elasticity vary by customer segments? Do they vary by other factors such as time-of-day or location? What are the resource requirements and projected costs of developing a manageable process that keeps knowledge of products within an acceptable range, and below the threshold of customer dissatisfaction? What is the projected benefit or return on investment (ROI) of developing and implementing such a process? Note that it s important to know this at the retail unit level. Customers aren t interested in average National scores only what happens to them personally. Identify employee action items pinpoint key drivers of employee satisfaction and engagement in need of improvement (based on employee feedback) Link the employee and customer action items establish the extent to which performance on each customer action item is related to performance on each employee action item Figure 3 illustrates the results of an analysis of the relationship among targeted employee and customer action items. In this case, three pairs of highly-related employee and customer action items have been identified. For example, not only has have tools to do the job been identified as an employee action item, but it is directly related to customer perceptions of the employees knowledge of products and promotions. Figure 3 Relationship Between Customer and Employee Action Items Willing to respond quickly to problems Employee Key Drivers Empowered to do the job Have tools to do the job Company listens to and cares about employees Understanding the Employee/ Customer Connection Elements of the employee experience that impact the customer experience are often overlooked and/or misunderstood. Viewing customer data and employee data as two sides of the same coin is one way to identify key opportunities to make real improvements. The integrative analysis process works as follows: Customer Key Drivers Treats customers as valuable Knowledge of products and promotions Identify customer action items pinpoint key drivers of customer satisfaction and loyalty in need of improvement (based on customer feedback) Enabling Improvement at the Retail Level Identification of customer opportunity areas and related employee opportunity areas sets the agenda for the next phase. During this phase, we enable each retail unit to continuously improve by providing the tools and techniques

4 for the unit and its employees to address the right issues, develop and implement the most effective solutions, and monitor results. There are three approaches to this continuous improvement process to choose from to best fit an organization s culture and needs: unit-developed, segmented best practices, or a hybrid of these two. Each of these engages retail unit staff throughout the process and involves an objective facilitator. The facilitator works with each unit to develop the necessary skills, provide a sound process to follow, and keep the process on track. The facilitator makes sure continuous improvement is done and essential steps are not skipped. The point of distinction between the approaches is the originator of the solutions. Fueling the Desire to Improve Finally, after creating understanding and enabling the retail unit, we move to the third part of the integrated customer experience process: motivation. Knowing which issues to address and devising the best plans won t create superior customer experiences if everyone isn t on board and motivated to make things better. A positive method for involving everyone in the unit is through well designed incentive programs that drive change and reward successful outcomes. Solid recognition systems that reinforce desired behaviors and create role models are also excellent for communicating goals and values, and showing employees that their efforts are valued. Retail Unit Developed Approach. Solutions for the identified opportunity areas originate with continuous improvement teams (CITs) within each retail unit by following a systematic approach to problem solving supported with tools, techniques, and a professional facilitator. Segmented Best Practice Approach. Solutions for the identified opportunity areas are prescribed for each unit using best practices at the segment level. To determine best practices, first retail units are segmented into groups with common customer characteristics and circumstances. A facilitated discovery summit is held with top performers from each segment based upon customer satisfaction and financial performance to clarify issues and determine best practices. After that, unit level CITs take over to clarify their specific issue and root cause for the opportunity area, evaluate best practices for fit and implement approved plans with the same continuous improvement loop built in. The Hybrid Approach. May also be appropriate with some issues addressed through the best practice approach and others on a unit-by-unit basis. Whatever method is used, the key is to equip and involve employees in making the solution a reality. Making this a closed-loop process so improvement can be ongoing to stay ahead of competition is also a critical element for success. It is important to note a significant aspect of the incentive plan being proposed here. The incentives are tied to both overall customer satisfaction and specific behavioral elements of the customer experience. This two-level structure allows employees to track their performance at both levels and rewards them for improvement in the specific behavioral areas of opportunity, as identified from the research (as noted in Figure 3). Successful incentive programs aren t just about the awards. They must also include fair and effective program rules, accurate measurement, and timely feedback of results. High impact and frequent communications convey what needs to be done, why it s important, how to do it, and what will happen when the goals are achieved. Awards need to be meaningful and motivating to the individual, highly promotable, and have plenty of trophy value so employees can get continuous reinforcement by telling friends and family about the award they earned from their employer. Effective reward and recognition strategies are powerful tools to keep the continuous improvement process working. Investing in expert design and operations support is well worth it to get real results.

5 Focus on the Front Line Understanding, enabling, and motivating employees is essential to turning customer information into meaningful actions, and ultimately, a differentiated customer experience. The connection between the employee experience and the customer experience is getting more and more attention as a true driver of business success. Consider the research done by James L. Oakley, Assistant Professor of Marketing, Krannert School of Management, Purdue University: Linking Organizational Characteristics to Employee Attitudes & Behavior A Look at the Downstream Effects on Market Response & Financial Performance. In that study, Oakley found that there is a direct link between employee satisfaction and customer satisfaction, and between customer satisfaction and improved financial performance. Employee satisfaction is a key antecedent to employee engagement. He also found that organizations with engaged employees have customers who use their products more, and increased customer usage leads to higher levels of customer satisfaction. 1. For example, see Brandt, R. and Cooler-de Sollier, C. (1990) A Process for Using Measures of Customer Satisfaction to Direct Service Quality Improvements, Marketing in the New Europe. (Amsterdam: European Society for Opinion and Marketing Research); pp.1-20; and Zeithaml, V.A., Parasuraman, A. and Berry, L.L. (1990). Delivering Quality Service. (New York: The Free Press); pp For a representative review of this work, see Myers, J.H. (1999). Measuring Customer Satisfaction. (Chicago: American Marketing Association); and Allen, D.R. and Rao, T.R. (2000). Analysis of Customer Satisfaction Data (Milwaukee: ASQ Press). 3. For a sample of this work, see Mager, R.F. and Pipe, P. (1970). Analyzing Performance Problems. (Belmont, California: Pitman Learning); Rummler, G.A. and Brache, A.P. (1996). Improving Performance: How to Manage the White Space on the Organization Chart. (San Francisco: Jossey-Bass); and Cross, K.F., Feather, J.J., and Lynch, R.L. (1994). Corporate Renaissance: The Art of Reengineering. (Cambridge, Massachusetts: Blackwell). Retail employees are the living representation of your brand. There is a battle underway for customer loyalty in order to maintain and grow. Organizations that use an integrated approach to build on the connection between their employees and their customers to create superior customer experiences, especially at the retail level, will be the ones to succeed.

6 (877) 4 MARITZ info@maritz.com MCS / Maritz Inc.