Posted by Paul Hagen on May 11, 2012
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.
1. Reward those named in customer surveys. At Pitney Bowes, employees recognized by name in favorable surveys or feedback receive a gift certificate, and at GoDaddy.com, one lucky employee’s bonus is a paid year’s worth of rent or mortgage payments. Circles, a provider of virtual concierge services, gives agents the ability to accumulate points based on customer satisfaction surveys and redeem them for prizes, including additional time off.
2. Recognize people behind the scenes. Since 1992, every Valentine’s Day, Southwest Airlines has awarded a Hero of the Heart as a tribute to a behind-the-scenes star work group that does not have direct customer contact.
3. Empower peers to celebrate each other’s work. One financial services firm allows employees to nominate peers monthly who have the biggest impact on customer satisfaction and bring value to the firm for its “Random Acts Of Customer Engagement” award. KeyBank set up a program that allows employees to give each other “Key Kudos” for work that exemplifies a focus on customers.
4. Align rewards to goals. Instead of rewards like golf trips or dinners that have no correlation to customer experience, Fidelity sent those selected to participate in its customer experience Ambassador’s program to the Disney Institute for three days, which included touring Disney to see behind the scenes how it delivers its experiences.
Provide Perks That Improve The Employee Experience
Many companies on their customer experience journey have recognized that employee experience correlates to customer experience. Just as customers have larger contexts in which they use your products and services, employees have larger contexts in which they work for you. Help them navigate those larger contexts, and you have employees who can focus more on your customers.
5. Provide services that improve a work/life balance. Based on employee feedback, American Express built and piloted its first backup child care center adjacent to the Fort Lauderdale call center. It added nurse practitioners to the on-site healthcare service, allowing employees to get more of their medical needs (e.g., prescriptions) met without having to take time off. And American Express even got the Florida Department of Highway Safety and Motor Vehicles to come on-site twice a year so employees could renew their driver's licenses and car registrations without having to wait in long lines. Similarly, Cisco provides on-site car tune-ups. CDW also uses customer feedback scores to determine eligibility for extra perks, such as the ability to work from home.
6. Offer benefits that lower stress levels. CareerBuilder.com notes, “The inclusion of on-site services such as manicures, laundry, and daycare are enabling employees to cut their errands in half. Massage chairs, yoga classes, and even napping have been encouraged to cut back the daily errands and reduce workers' stress levels." To that end, Kaye/Bassman and Le Gourmet Gift Basket allow their employees to have sleep breaks at work, and Zappos offers employees access to a life coach.
7. Treat the frontlines reps with respect. American Express changed the title of its agents to “customer care professionals” and provides them with personalized business cards. Volusion uses “support concierge” for its call center reps. Zappos lets call center agents get their own desk to decorate any way they like.
Compensate And Promote Based On Customer-Centric Metrics
While I’ve emphasized the non-monetary side of incentives, the tying of variable compensation and promotions to customer metrics is a powerful incentive in companies that have established an understanding of how to affect those metrics.
8. Promotion tied to customer experience performance. At Enterprise Rent-A-Car, no one can further a career into corporate management who has not first started on the frontline and sustains above-average Enterprise Service Quality index scores over time. The account managers at CDW also have customer satisfaction objectives and cannot become eligible for job promotions until having achieved high satisfaction scores from their clients.
9. Bonuses to customer metrics. American Express created customer experience objectives for everyone in its service organization from senior managers to frontline employees. For its customer care professionals (CCPs), 85% of each performance assessment stems from customer feedback scores, and CCPs have an opportunity to earn an incremental 25% to 35% above their base salaries. The professional services firm, IHS, ties its CEO annual bonus compensation to key customer metrics that measure the company’s “customer delight” performance (see page 45).
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