Early on in my career, I managed a large customer loyalty program. The program was tied directly to executive compensation bonuses.
Each quarter when results were due, I would receive a phone call from the chief of human resources. The check-ins were stressful, but what was more stressful was delivering an undesirable result. When the performance fit with the projected goal, it was easy to deliver the message; no one inquired what the organization had “done” to improve performance. When the results tipped the other direction, and bonuses would not be as plentiful, the question of what happened, and where someone fell short, always landed back on my desk.
What always bothered me was that there was never a business case for moving the loyalty metric in a positive or negative direction. It was as though we would magically make our customers happier by saying that our goal was to increase customer loyalty. The quarterly knot in my stomach that appeared when the score went south or sigh of relief when it headed north remains with me to this day.
Goal-Setting with A Purpose
Business is supposed to evolve and grow. So, it makes sense that organizations leverage existing measures to create what seems like a straightforward, impactful SMART (Specific, Measurable, Achievable, Relevant and Time-based) goal.
It is also not surprising that the metric of choice is usually the customer experience rating. After all, why not set a goal that relates to your most important asset, the customer? Yet, as anyone who has been tasked with ensuring their organization reaches its goal can attest, most often a large question mark is placed on the A. That is, is this goal even achievable?
To answer this question, organizations should start by asking, “what is a reasonable target or goal?” -- and understanding that to be truly effective, customer experience performance goals require a connection to operational performance metrics, which typically fall in one of three categories: growth, retention, or cost reduction. By connecting changes in customer experience metrics with operational performance, organizations can link customer experience to business outcomes.
Planning for Success
Now that we have placed the end goal in context of business outcomes, we are left with one very important question: How do we improve our customer experience? The answer is to begin by focusing on the stops along the journey that have the greatest impact on overall performance and business objectives.
Next, determine the amount of improvement required at each individual attribute level and then decide whether this is A-achievable. Finally, consider whether the effort required for necessary improvement makes sense in terms of the expected return. Once the decision to move forward has been made, continually monitor progress.
CX Improvement Success in Luxury Retail
In one example, a luxury retailer noticed previously high-performing locations were slipping in customer experience ratings and overall revenue. Customer discontent was directly related to the staff behavior. Staff were reportedly rude, inattentive, and uncommunicative.
To stop the downward trend, the company delivered targeted training sessions to improve friendliness and provide a sense of welcoming into the store by every employee.Within one quarter after implementing the training, more customers began ranking their experience positively. Most importantly, repeat service visits began to increase, resulting in meaningful revenue retention -- which more than offset the cost of the employee training.