Is it possible for someone to be too customer-focused?
Why, yes, it is.
I’m reminded of a company we worked with a few years ago. As a highly respected global leader of specialty equipment that cost hundreds of thousands of dollars, with the total annual contract value of the sale reaching much higher than that, its customers expected immediate responses, focused attention, and superior service. The manufacturer’s team of experts spent a lot of time and money ensuring the customers got exactly what they wanted and needed.
Typical workflow began with a long sales cycle after the customer expressed interest in the equipment. There was a lot of pre-sales consulting work to make sure there was a fit between what the customer wanted to do and the equipment’s capabilities. Often this meant re-tooling and re-formulating aspects of the equipment so it would work under an astonishing range of physical environments.
Customers loved working with this company not just because they made state-of-the-art equipment, but because the company’s world-leading technical expertise helped customers see around corners they didn’t even anticipate.
Everybody was happy. But…
Could the manufacturer do even better? That’s what its new CEO wanted to know.
He believed he had found one measure that needed improvement. As he visited customers and partners during his first 90 days in the executive suite, he noted a relatively rare but very painful point that needed to be addressed: when equipment needed to be sent back within the warranty period. While this didn’t happen often, when it did occur it resulted in a considerable drag on the manufacturer’s customer satisfaction scores and impacted loyalty as well. The CEO believed it left the door cracked for smaller, less capable competitors to gain a foothold, which would undo the long sales cycle and shorten the lifetime customer value.
To address this, the CEO put in place a bonus incentive: Each and every group (sales, customer support, and engineering) that interacted with the customer had a portion of their bonus tied to a perfect score for no returns within the warranty period.
This seemed to work well, until it didn’t. Indeed, it may have worked too well.
Duly incentivized, each group focused on doing everything in their power to get a perfect score by ensuring customers did not return equipment. Perhaps, inevitably, the returns process became a nightmare for customers.
Prior to the bonus incentive, if a customer experienced an issue with the equipment, they would contact support who worked with engineering and the customer to confirm that the equipment was defective. The engineering department would officially authorize the “repair under warranty” process. The equipment was shipped back in, and the replacement shipped out. Although the process was smooth, the customer lost money due to downtime, and the manufacturer incurred the expense of shipping and as well as suffering damage to their reputation. Still, while inconvenient all around, the equipment issue was fixed, and the customer got what they paid for.
After the bonus incentive was put into place, however, an inconvenient situation got much worse: You see, engineering simply raised the bar significantly before they would initiate the “repair under warranty” process, since it negatively impacted their bonus. They didn’t take ownership, forcing the support team to go back and forth with the customer repeatedly, buying engineers time to re-create the issue in the labs. This hurt support’s customer service scores, and, more importantly frustrated customers, impacting the manufacturer’s reputation and lifetime customer value.
The lesson of this story is that arbitrary measures can be a pain point.If they aren’t balanced.
In trying to incentivize the organization to lessen instances of returned equipment, the CEO created longer, more inconvenient bottlenecks that made customers more likely to find another manufacturer in the future.
So, when I ask if you can be too customer-focused, I’m not suggesting you stop caring about customer satisfaction, product quality, or high service and support scores. Instead, I’m underscoring the need to consider additional factors when reviewing existing processes. It’s always better to improve a process than simply follow it, but not if the “improvements” make things more complex for your employees or destroy your bottom line.
The CEO in this example, in trying to keep customers 100% satisfied, put undue pressure on his employees, forcing them to offer less compliant customer service to protect their bonuses. In delaying the fix to equipment defects, the engineering team made the support team’s job harder and, in the end, the customers were dissatisfied, damaging the company’s reputation and its future revenue.
Find the balance to help teams complete their work quickly, simply, and joyfully, so that customers are happy and the business grows.
This is at the very heart of work being done by the Open Customer Metrics Framework working group. OCMF seeks to create an open modern measurements framework that helps support and services team standardize measurement across the industry and focus on measuring metrics that matter.
The framework itself is built around five categories: customer, employee, business, knowledge/collaboration, and acceleration. Specifically, it suggests that service and support leaders should focus 20% of their time on making customers happy; 20% of their time making employees happy; and 30% making sure the business expectations are met. Additionally, they should spend 20% of their time capturing and reusing what their teams already know and 10% of their time gaging progress on projects that transform the business.
Does this sound counter intuitive? A service and support leader spending ONLY 20% of their time focused on customer satisfaction? Not at all. Today, more and more service and support and shared services organizations realize they do not exist in a bubble. Its increasingly critical that managers and teams understand their role within the broader organization and work to improve their processes in collaboration with other areas of the enterprise to reach common business goals.
To prize the customer satisfaction score above all else runs a risk of neglecting other areas of the business that contribute to future growth and revenue. Instead, it’s time to shift the emphasis away from internally focused performance metrics to those that are focused on end-to-end processes that maximize overall business outcomes.