Nine Ways To Reward Employees To Reinforce Customer-Centric Behaviors

Paul Hagen

The only way your company will differentiate based on customer experience is if the culture of your organization aligns closely with the brand promise to customers. Zappos CEO Tony Hsieh puts it in his blog post entitled “Your Culture Is Your Brand”: “Advertising can only get your brand so far . . . So what’s a company to do if you can’t just buy your way into building the brand you want? In a word: culture. At Zappos, our belief is that if you get the culture right, most of the other stuff — like great customer service, or building a great long-term brand, or passionate employees and customers — will happen naturally on its own.”

When Forrester looks at building a customer-focused culture, we believe firms need some precursors in place, such as a clear strategy and vision, metrics that reflect customer perceptions, and governance mechanisms that set standards and hold people accountable for changes.

Once those are in place, rewards systems are one powerful lever to keep employees focused on what’s important. My colleague Belle Bocal and I identified nine ways that companies use reward systems to build a customer-centric culture.

Celebrate Target Behavior

Many companies make the mistake of trying to tie variable compensation (e.g., bonuses) to customer experience metrics too early. What many firms have learned is that the more informal recognition programs can be even more powerful at moving culture than the compensation metrics.

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The Partner Role In Improving Customer Experience (CX)

Paul Hagen

Many different types of firms have channel partners or others that control a significant part of the actual experience with customers. Automobile companies have dealers, insurance and real estate firms have independent agents, software companies have value-added resellers (VARs), restaurants and hotels have franchises, and heavy equipment manufacturers have resellers. Even the brokers or financial advisors within financial services organizations can act in many ways like these external partners.

While companies may not have direct control over these partners, firms are waking up to the fact that there are ways to influence these organizations to provide a better customer experience. To ensure that partners enhance the customer experience (CX):

  • Share VoC data with partners. Standard voice of the customer (VOC) programs make customer feedback data available to internal employees throughout the organization. Firms should use adapted versions of these dashboards to deliver relevant insights to partners. Deluxe, which sells services to small businesses and financial institutions, gathers customer research on the behalf of its smaller partners that cannot afford to pay for these insights on their own. Such insights gathered after the financial crisis helped many of its smaller financial services clients understand specific teller behavior that was hurting relationships more than helping.
     
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Making Customer Experience Relevant Behind The Scenes

Paul Hagen

“Customer experience is everyone’s business” is a mantra that I often hear from customer experience leaders. Of course, it’s true. The entire purpose of a company as an entity is to provide value to customers in exchange for a payment. Every activity that the company performs is part of the ecosystem that delivers the perceived value that a customer receives.

But connecting the dots to those behind the scenes from IT to logistics planners and compliance individuals challenges many customer experience leaders . . . as well as the leaders of those behind-the-scenes departments. I’m feeling this challenge poignantly right now as I prepare a keynote speech for Forrester’s joint Infrastructure & Operations and Security Forums coming up in a few weeks. Let me share a few pointers that I’ve gathered from customer experience leaders who helped guide my thinking:

  • Translate the language. As customer experience professionals, we have built a vocabulary to describe the tools and methodologies of our practice in the same way every other department has created its own language. Customer experience leaders have to translate these practices into the beliefs and behavioral norms of the departments if they are going to change the way things are done. Change agent, champion, or customer advocate programs at firms like John Deere, Philips Electronics, Intuit, and Fidelity are great mechanisms to provide these translators.
     
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Chief Customer Officer (CCO) Roundtable On CX Maturity

Paul Hagen

“Customer experience (CX) maturity” was the topic of Forrester’s recent chief customer officer (CCO) roundtable meeting. Based on a recent report by Megan Burns called “Customer Experience Maturity Defined,” the customer experience leaders present took Forrester’s self-test of key CX practices, discussed their own company’s strengths and weaknesses, and shared successes and challenges they faced at their companies in interactive discussions throughout the day.

Here are some of the highlights from the discussion.

Governance and project investment. A significant portion of the discussion revolved around customer experience governance and getting funds for projects. There was clear agreement in the room on needing CX leaders at the top levels of management. For instance, the CCOs were saying:

  • “Customer experience loses at the corporate budgeting level. You need to be there or have an exec like the CFO fighting for you there.”
  • “Get on the decision-making body for investments and make sure you at least have veto power over projects.”
  • “When I’m making the business case for CX-related projects and pushing it up to the C-level, I always build ranges into the outcomes (e.g., reduce churn by 0.5% [worst case], 1% [middle case], and 2% [best case]; increase word of mouth by 2% [worst case], 5% [middle case], 10% [best case]). I get less argument about even the low number . . . people are overly optimistic.”
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How To Stop Your Customers From "Cheating" On You

Doug Washburn

About five months ago, I “broke up” with T-Mobile in favor of AT&T. I was a T-Mobile customer for six years on a very competitive service plan. But none of that mattered; I wanted an iPhone, and T-Mobile couldn’t give it to me. It was a clean but cruel breakup: AT&T cancelled my T-Mobile contract on my behalf, the equivalent of getting dumped by your girlfriend’s new boyfriend.

I bring this up because it reminds me of the saying: “If we don’t take care of our customers, someone else will.” This is particularly important to remember in “The Age Of The Customer” where technology-led disruption is eroding traditional competitive barriers across all industries. Empowered buyers have information at their fingertips to check a price, read a product review, or ask for advice from a friend right from the screen of their smartphone.

This is affecting your IT just as much as your business: As an indicator, Forrester finds that 48% of information workers already buy whatever smartphone they want and use it for work purposes. In the new era, it is easier than ever for empowered employees and App Developers to circumvent traditional IT procurement and provisioning to take advantage of new desktop, mobile, and tablet devices as well as cloud-based software and infrastructure you don’t support. They’re “cheating” on you to get their jobs done better, faster, and cheaper.

To become more desirable to your customer – be it your Application Developers, workforce, or end buyers – IT Infrastructure and Operations leaders must become more customer-obsessed, which I talk about in this video:

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The Future Of The Service Desk Requires A "Customer-Savvy" Approach

John Rakowski

Hi,

Last week I took part in a podcast focusing on the "Future of the Service Desk." Unsurprisingly, this is a hot topic at Forrester for the I&O role. The standard equation for measuring service desk performance is simply the highest possible quality or customer service over the lowest possible cost. While simple on paper, the challenge to try and achieve this equilibrium is a complex conundrum for many service desk managers.

Developments such as the "consumerization" of IT further compound this issue. Service desk professionals now operate in a business environment in which their end users or customers are "tech savvy." This leads to a potential conflict spark point where IT customers believe that they have more IT know-how than the service desk. In some cases, this could well be true and it would be dangerous to dismiss these customers and their knowledge. So what is the answer? Well, on the podcast I explained that the service desk and IT as a whole has to focus on becoming "customer savvy" to embrace these pressures.

So what does customer savvy mean?

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Citizen Experience Can Help Agencies And Unions Address Budget Woes

Paul Hagen

Like it or not, government services face many of the same pressures that companies face. Companies like Amazon.com, USAA, Disney, and Zappos.com raise customer expectations when they deliver stellar service. As they raise the bar, other companies and government agencies risk getting fired when they fail to deliver the value that customers expect, make customers jump through hoops to access it, or begrudgingly deliver it through unengaged employees. Customers and citizens simply choose to take their money elsewhere.

It’s through this lens that I’ve watched the recent battles over state budgets and public employees along with their unions. When citizens don’t perceive they're getting a good value for the buck, they take their money elsewhere, even if that is through the ballot box — no wonder, when the citizen experience is so often sub-par.

Here are a few examples I’ve witnessed just in the past couple weeks: A group of on-duty cops spend an hour drinking coffee in Starbucks when people don’t feel comfortable walking around the streets a few blocks away; DMV workers look bored and move at the pace of sloths while I spend an hour waiting in line, even though they’re likely making way more money than the waitress at a local restaurant who’s super-friendly and efficient; a public transportation worker holds a sign at a street car stop urging people to smile, even when the lines often experience large delays; a gruff postal worker begrudgingly gets off his stool to get my package and then throws it on the counter.

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