Stop Employees From Asking For Good Ratings

Over the last few weeks, I’ve run into a couple of examples of a common problem with some Experience Management (XM) programs… “gaming.” Here’s what I found…

During dinner with a friend who is an executive at a large bank, our discussion made its way to XM (no surprise). He mentioned that his bank has an employee engagement study and that leaders are compensated based on the results.

Sounds like a good thing, right?

My friend then shared a conversation that his boss had with the leadership team. This senior executive told my friend and the rest of his direct reports that they needed to give him better ratings, because the current scores were negatively impacting his compensation.

Now for the second example. I’m a frequent flier, and regularly receive requests from airlines to provide feedback after a flight.

Sounds like a good thing, right?

During a recent trip on Delta, the flight attendant announced that we’d be receiving a survey and that she hopes they exceeded our expectations and will give them a 5 (see note about Delta below).

Do these two situations sound like a path to better employee experience (EX) or customer experience (CX)? Of course not! Both of these examples represent inappropriate behaviors. Whenever a person is pressured to give a specific score, the integrity of the measurement system is broken. We call this type of behavior “gaming the system.”

Gaming is a common problem. It happens when an organization puts too much emphasis on specific measurements — at the expense of the overall XM program.

The goal of XM is not to achieve some number, but to create a discipline to continuously learn, propagate insights, and rapidly adapt. This enables an organization to consistently deliver experiences that meet the needs of its key audiences. When an organization overly focuses on a number, often by attaching strong incentives to individuals based on the data, the system is bound to create these types of counter-productive “gaming” behaviors.

To help discourage this type of behavior, consider adopting these five rules to stop employees from gaming that I’ve described in a previous post:

  1. Don’t mention or refer to a score
  2. Don’t mention specific survey questions
  3. Don’t mention any consequences
  4. Don’t say or imply that you will see their responses
  5. Don’t intimidate customers (or employees) in any way

The bottom line: Make sure you’re not encouraging gaming behaviors.

Note: I regularly fly with Delta and this is the only time that I’ve run into this type of gaming behavior.

Discussing The Experience Economy With Joe Pine

TheExperienceEconomy_Ruled_2Welcome to the Experience Economy. That’s the title from an HBR article written by Joe Pine and James Gilmore in 1998. It was a seminal article, laying out the important role that experiences play in building differentiation. Pine and Gilmore went on to write an amazing book, The Experience Economy: Work Is Theater & Every Business a Stage.

The Experience Economy was more than an article or a book, it was the start of a movement. And it continues on today. As a matter of fact, Pine and Gilmore are rereleasing the book with a new forward. They’ve also created an online training series focused on helping frontline employees stage remarkable experiences.

I caught up with Joe Pine during his global travels to discuss the Experience Economy. Here are his answers to some questions I posed:

Q: How has your view of the Experience Economy shifted since you originally introduced the concept?

Pine: Interestingly, not that much! My partner Jim Gilmore and I always thought that the experience staging would grow many-fold, that every year more and more companies would embrace the Experience Economy, and it would be both caused by and cause goods and services to be increasingly commoditized. One big difference is that we used to talk about the nascent, the emerging Experience Economy — and now we say it is here. Experiences have become the predominant economic offering, what people prefer over mere goods and services. I remember having to argue with people about it, making the case of the shift into the Experience Economy; now, however, I just describe it and everyone gets it.

Q: What role does new and emerging technology play in the future of the Experience Economy?

Pine: One of the big growth arenas is in experiences that fuse the real and the virtual, including virtual reality, augmented reality, and many more possibilities I wrote about in my book Infinite Possibility. Digital technologies also enable companies to mass customize their offerings so much more than in the past, for anything that can be digitized can be customized. And that’s actually how I discovered the Experience Economy, by realizing that customizing a good turned it into a service, and customizing a service turned it into, yes, an experience! So companies can now know who their customers are, where they are, their context at this moment, and how to fulfill their individual wants, needs, and desires. The “Wow!” effect that engenders can turn such interactions into engaging experiences. I’m also enamored with the potential of 3D printing, for it makes matter programmable, effectively digitizing materials to be (almost) instantly customized to the individual.

Q: I like to talk about Experience Management as a discipline that need to be woven throughout an organization’s operating fabric. How does that mesh with your view of the Experience Economy?

Pine: I think that’s true — while companies can make progress by feel, by art rather than science, it will tend to be sporadic and lessen the chances of truly embracing today’s possibilities. Also understand that many companies aim their Experience Management activities too low, at merely making their interactions with customers nice, easy, and convenient. These are all well and good — and often very necessary before proceeding further — but do not rise to the level of staging a true, distinctive experience. As a distinct economic offering, experiences are about offering customers time well spent, not the time well saved of services. So, yes, make the service aspects of your offerings frictionless, and then use the time saved to build atop this to offerings that are engaging, memorable, and personal, experiences that customers view again as time well spent.

Q: Can you share a couple of the coolest examples you’ve seen of a company shifting it’s approach and embracing the Experience Economy?

Pine: My favorite experience stager these days is the Princess Cruise Lines unit of Carnival Corp. for its Ocean Medallion program. The Medallion is an IoT device (speaking of new technologies) that enables the cruise ship to mass customize everything on the ship — and eventually off it — to each individual guest, family, or other unit (such as wedding parties or reunions). Guests upload their passport data beforehand and then simply walk up and onto the ship without ever having to show it, as Princess crew members have tablets that identify each guest by name and picture based on their unique Medallions and welcome them aboard. Guests also specify their preferences before boarding, which Princess uses to create a mass customized itinerary that can be updated as it learns more and more about each guest. It can even learn about context, knowing for example that on the pool deck with the kids your favorite drink is an iced tea with no lemon, while in the bar with your buddies it’s a coconut mojito, and at dinner with your spouse it’s a glass of Shiraz! True, though, that as a cruise company Carnival has always been in the experience business, but now it is elevating that experience for every guest, eventually on every ship.

One of the cool things I see happening turning service providers into experience stagers is retailers, restaurateurs, and others actually charging admission for the experience! Next in Chicago, Trois Mec in LA, Noma in Copenhagen, and a host of other restaurants, for example, now have you go online to reserve a table, pay the admission fee, print out your tickets, and then present them at the reserved time for the dining experience. Even Venice, Italy, is starting to charge admission to alleviate the overcrowding in the city center.

And I’ll also mention hospitals, of which so many are taking on experience-related themes or purpose statements, such as Holy Redeemer in Philadelphia with “My. Life. Story.”, Mosaic Life Care in St. Joseph, MO, with “LIve Life Well”, or Mid-Columbia Medical Center in The Dalles, OR, with “Personalize. Humanize. Demystify.” I work more in healthcare than any other industry for the basic reason that research shows that the better the patient experience, the better the outcomes, and that is what healthcare is truly about.

Q: What advice do you have for a non-traditional experience company like a chemical manufacturer or shipping company to embrace the Experience Economy?

Pine: It may seem like a stretch, but even B2B manufacturers or service providers. First, they can understand a basic principle that in today’s Experience Economy, the experience IS the marketing. So they can stage marketing experiences that generate demand for their offerings., such as CASE Construction Equipment does with its Tomahawk Experience Center in the north woods of Wisconsin, or the World of Whirlpool on the banks of the Chicago River.

Any company can also turn mundane interactions into engaging encounters by understanding that work IS theatre. It’s not a metaphor — work as theatre — but a model for work, understanding that whenever workers are in front of customers, they are on stage and need to act in a way that engages those customers. In shipping, a costumed UPS route driver performs an act of theatre with every package she delivers, while FedEx’s overnighting is absolutely, positively theatre when its employees deliberately rush about to convey the impression of speed as the essence of the company.

Whenever I work with B2B companies I also make the same point as earlier that mass customizing their goods turns them into services, and their services into experiences — and that B2B customers can far better gauge the value of such customization than consumers can. Moreover, no business customer buys their offerings because they want their offerings; they are always the means to an end. If you supply the end rather than the means — and that means focusing (as healthcare should) on outcomes, not inputs — then you will gain much more economic value. In fact, you can then go beyond staging experiences to guiding transformations for your individual customers. And there is no greater economic value you can create than to help customers achieve their aspirations.

The bottom line: Make sure to read the book!

Five Recommendations For De-Emphasizing Benchmarking

Benchmarking, benchmarking, benchmarking… it’s a popular subject.

I’ve been publishing CX benchmarks for more than 10 years, so you might be surprised by my point of view on the topic: benchmarking is often overused and misinterpreted. I’m not saying to give up on the entire activity, but people often spend too much time and energy focusing on industry comparisons that aren’t necessarily an accurate reflection of the genuine customer experience.

Let me start by saying that benchmarking is a perfectly good activity. It makes sense to periodically evaluate your performance relative to competitors, especially as an input to your strategy. And it’s also healthy to look at your performance relative to companies from other industries.

While benchmarking provides value, people often let it distract them from more important activities. So here are five recommendations on how to think about benchmarking:

  1. Focus on improving, not comparing. When it comes to the use of your insights activities, it’s critical that an overwhelming majority of your efforts are aimed at finding opportunities to improve — not scorekeeping. Many executives seem to feel as though a benchmark provides a security blanket of sorts—one that shows their remit within the business is in line (or better than) the competition. Whether it’s from internal metrics or external benchmarks, knowing where you are and where you’ve been is not nearly as valuable as knowing where you should be heading. Companies often use up a lot of their feedback capacity to ask customers (and employees) questions solely for the purpose of fueling a benchmark. My advice: Optimize everything you do on driving improvements, even if it means dropping some benchmarking questions.
  2. Obsess about customers, not competitors. One of the risks of relying too much on benchmarking is that it can mask your performance when there are shifts in the market, such as new competitive options or evolving customer requirements. You may be doing well against current competitors and with existing customers while the market is slipping away from you. Your critical strategic question should be are we delivering the right experiences to the right customers?, not how are we doing versus our competitors?
  3. Compare data within studies, not across them. Every industry benchmark is based on a specific methodology, with it’s own target audience, sampling approach, timing, collection mechanism, questions, and calculations. Each of these items has an impact on the results. As I often say, sampling patterns really, really matter. It’s often ineffective to compare results across different studies unless you control for all of those items, which can be very difficult. So don’t spend too much time trying to reconcile an industry benchmark with internal results.
  4. Set goals around key drivers, not necessarily industry benchmarks. As you think about setting goals for your organization, don’t fall into the trap of relying on benchmarked metrics just because the data exists. You should be setting goals for the items that drive the overall performance of your business, which may or may not look anything like the industry benchmarks. What’s unique about your brand and what creates a loyal customer? We recommend following five steps for creating a CX metrics program, starting with higher-level goals and working your way down to metrics on key drivers.
  5. Rely on internal insights, not external data. While external benchmarks can provide a high-level snapshot of relative performance, they lack the depth and adaptability to dig into critical company-specific topics such as the needs of target customer segments and your performance during key moments of truth. The additional value of internal insights are also dramatically amplified when you combine experience data (X-data) with operational data (O-data). The ability to dig into key questions and find more meaningful insights makes building internal insights capabilities a much more valuable endeavor than digging into external benchmarks.

The bottom line: Choose actionable insights over competitive comparisons… everyday!

Operationalizing XM: The Report

I’m super excited to announce the publication of new research from the Qualtrics XM Institute, “Operationalizing XM.” It describes how organizations can tap into experience management (XM) to continuously learn, propagate insights, and rapidly adapt—capabilities that can be used by just about every organization. It’s a must read (and a free download) for anyone who cares about or is just interested in XM.

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The report outlines the XM Operating Framework, and goes into detail on Six XM Competencies.

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Here’s the executive summary of the report:

An ever-increasing flow of information is shifting power from institutions to individuals, while new technologies are redefining business models and shortening product lifecycles. To succeed in this environment, organizations need to adopt a new approach that focuses more on the experiences of human beings throughout their ecosystem. How? By developing a discipline called Experience Management (XM). This report introduces this new approach and provides details around:

  • The XM Operating Framework, which is built on a combination of competency, technology, and culture.
  • The six XM Competencies—LEAD, REALIZE, ACTIVATE, ENLIGHTEN, RESPOND, and DISRUPT—that organizations should focus on to improve their XM capabilities.
  • The five stages of XM maturity that companies will progress through as they master the six Competencies: 1) Investigate, 2) Initiate, 3) Mobilize, 4) Scale, and 5) Embed. This report also includes an XM Competency & Maturity Assessment organizations can use to calculate their own maturity levels.
  • The XM Diffusion path that companies should follow as they expand their XM efforts across their entire enterprise.

Stop Obsessing About Organizational Alignment

I was recently asked a question that I hear a lot, how do we get alignment across our large, complex organization? This is an important question since the path to Experience Management (XM) often requires large-scale change.

I’m now just saying: Stop focusing so much on it. Instead of trying to gain full alignment before you begin, build it over time in an iterative manner that I’m calling Agile Alignment.

When people think about transformation, they often make a false assumption that alignment is required prior to change. They believe that it’s a prerequisite to get all of the key stakeholders on the same page. It isn’t.

If you have limited bandwidth (which is the case for just about everyone I’ve ever worked with), then you have to make trade-offs on where you spend your time and energy. At a simplistic level, you will be faced with deciding between trying to build alignment with people who are not pre-disposed to supporting your efforts, or focusing on driving some elements on your change agenda. My argument is that, on the margin, the latter can be much more productive than the former.

We often assume that alignment is a precursor to change. But let me introduce a new thought: Successful change is the precursor to true alignment. In other words, you may be able to get people passively on-board with your plans, but they aren’t truly on-board until they see something is working and on the path to success.

The ideal approach for driving transformation, therefore, is an iterative process that I’m calling Agile Alignment. It goes like this:

  1. Identify key stakeholders who are actively aligned
  2. Drive successful change initiatives with those aligned stakeholders
  3. Build alignment with a larger group of stakeholders
  4. Go back to step #2

This way, you keep expanding the scope of your efforts and the breadth of your alignment over time.

The bottom line: True alignment follows success.

 

 

Is NPS A Dubious Fad?

Okay, it’s that time again. Every few years someone ignites the debate about whether Net Promoter Score® (NPS®) is a great or terrible thing. A recent article in the WSJ (The Dubious Management Fad Sweeping Corporate America) has sparked the discussion this time.

Rather than write something entirely new, I decided to share something I wrote in 2015 that addresses the issue. Before I share that post, I also suggest you take a look at these:

Below is the 2015 post, Is Net Promoter Score A Savior Or A Demon?

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Every couple of years, I get a resurgence of questions about Net Promoter® Score (NPS®). These surges typically coincide with research that shows how NPS is either an excellent predictor or a terrible predictor of company performance. That data often ignites a religious battle between the NPS lovers and NPS haters.

Well, it’s one of those times.

Let me start by saying that I’m an atheist in this NPS battle. We’ve had the opportunity to study and work with hundreds of companies that use NPS. I’ve recommended to some companies that they adopt NPS, to others that they stop using NPS, and to others that they start with a totally different set of metrics (see our VoC/NPS resource page).

Let’s look at what we know for sure about NPS…

The reality is that the metric itself is much less important than how it is used. I’d rather use a sub-optimal metric in a way that drives positive improvements across an organization, than have a perfect metric that doesn’t result in as much impact.

Here are some quick answers to key questions:

  • Is NPS the best indicator of customer loyalty and business performance? In many cases, no.
  • Can other metrics be used to drive positive change? Yes.
  • Does NPS provide an easy to understand metric that can be widely adopted? Yes.
  • Can NPS be used to make an organization more customer centric? In many cases, yes.
  • Will a company improve if it increases promoters and decreases detractors? In many cases, yes.
  • Can NPS be used inappropriately? Yes.
  • Can any metric be used inappropriately? Yes.
  • Would I ever recommend NPS for every touch point? No.
  • Should companies consider their specific business when selecting metrics? Absolutely.
  • What’s more important, the metric or the improvement process? The improvement process.

The bottom line: NPS is neither a savior nor a demon.

P.S. In case you didn’t know, NPS® and Net Promoter® are registered trademarks of Fred Reichheld, Satmetrix, and Bain & Company.

 

Exciting News From The XM Institute

The time has finally come for me to tell people to stop purchasing Temkin Group research reports. Are we eliminating them? No. Are they irrelevant? No. We’ve just decided to give them away for free on the Qualtrics XM Institute site.

That’s right, you can now get access to almost our entire research library for free. One of the reasons we joined Qualtrics was to be able to help more people and organizations. This move shows you the commitment that Qualtrics is making to help the world understand and deliver on the promise of Experience Management (XM).

One of the things you’ll notice on the XM Institute page is a filter to select reports based on Six XM Competencies. Yes, we’ve created a new model. It’s based on the following six competencies:

  • Lead. Architect, align, and sustain successful XM efforts. Driving XM transformation requires a strong program and active support from senior leadership.
  • Realize. Track and ensure that XM efforts achieve business objectives. For XM efforts to have lasting, positive impact, they must align with the overall priorities of the organization.
  • Activate. Create the appropriate skills, support, and motivation. People generally gravitate towards the status quo. To help overcome that inertia, the organization must ensure that employees have all the appropriate XM-related training and support needed.
  • Enlighten. Provide actionable insights across an organization. At the center of XM is the constant flow of data being transformed into useful information and shared with those most capable of taking the appropriate action.
  • Respond. Prioritize and drive improvements based on insights. An organization must act on what it learns by making constant improvements as insights are uncovered.
  • Disrupt. Identify and create experiences that differentiate the organization. Truly successful XM efforts go beyond simply reacting to problems to proactively developing innovative experiences that give the organization a competitive advantage.

That’s just a quick summary. We will be publishing much, much more on this model in the future. It will be the primary lens for all of our content, which is why and we’ve created categories on this blog for the Six XM Competencies.

Enjoy all of the free content on the Qualtrics XM Institute site!

Six Categories Of X&O Data Insights

Last week I attended SAP’s SAPPHIRE and CX Live events in Orlando. It was great to see 35,000 or so of my new friends. As you might expect, Experience Management (“XM”) was a dominant theme. Just about every SAP or Qualtrics keynote speech discussed XM, and it was a topic at many of the concurrent sessions. I really enjoyed seeing the XM message come to life in so many different ways.

One of the cornerstones of XM is the combination of operational data (“O-data”) and experience data (“X-data”). While each type of data can provide valuable insights on its own, the combination can unlock new levels of intelligence across an enterprise. These more inclusive datasets will increase in value as organizations expand their use of predictive analytics, as the combined data is inherently more insightful.

To help you think about where you can find valuable opportunities to combine X- and O-data within your organization, we identified the following six categories of use cases:

  • X Why: Find something happening in O-data and look for an explanation in X-data
  • O Drivers: Find something happening in X-data and look for operational situations that are causing the situation
  • X&O Predict: Build projections based on an analysis of X- & O-data
  • X&O Personalize: Adjust how you treat people based on a combination of X- & O-data
  • X&O Alert: Send alerts and other proactive information based on a combination of X- & O-data
  • X Value: Measure the value of improving experiences by examining the impact that those changes have on business results

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The graphic above provides some customer experience (“CX”) and employee experience (“EX”) examples, but it’s not meant to be an exhaustive list of use cases. Hopefully the table provides you with a good sense of the insights that can be unlocked with the combination of X- and O-data.

Now that you understand some of the ways for gaining insights from X- and O-data, think about how the combination can impact your organization. If you have some ideas or examples of how it’s worked for you, leave them in the comments section of this post.  I’ll try and highlight some of the most interesting items.

The bottom line: Combine your Xs & Os to unlock more insights.

 

Complexity Is An Experience Killer

I just spent two days in Miami with a great group of executives who are part of the SAP CX Client Advisory Board. One of their presentations described the company’s technology transformation, and included a stream of activity around “decomplexing.” I loved seeing that!

Complexity ends up oozing its way into all types of experiences. Complex products, prices, or processes lead to ill-prepared employees and confused customers. A complex set of benefits leads to ill-prepared HR representatives and confused employees. A complex brand positioning leads to erratic messages and a confused marketplace.

The problem even goes beyond confusion, as complexity causes people to make mistakes — or even to think they made mistakes when they hadn’t. It generates large numbers of unproductive interactions, as people try and sort through the complexity to figure out what they want to, or need to do.

People often try and mask complexity. And while that may be effective in some situations, it ends up failing almost all the time. Why? Because complexity oozes its way into everything. It’s extremely hard to contain. A complex pricing structure can be masked with a configurator, but customers end up being confused about why they have to buy something, the price associated with the purchase, or the information on their first bill.

Organizations have a natural tendency to create complexity. They add rules and processes on top of of other rules and processes. That’s why decomplexing is a great thing to work on. It requires an explicit focus and an ongoing discipline. Making things simple is often much harder than continuing to make them complex.

Decomplexing is worth the effort.

The bottom line: Simplification is a wonderful enabler of great experiences.

The Human Experience Cycle

As you think about your experience management (XM) efforts, it’s important to understand  how people flow through the experiences in their lives — as customers, employees, patients, fans, citizens, students, etc. To help deepen that understanding, I’ve created a simple model, the Human Experience Cycle (HxC). As you can see in the chart below, the HxC is made up of five elements:

  • Expectations: What a person anticipates will happen during an experience.
  • Experiences: What actually happens to a person during an interaction.
  • Perceptions: How a person views an experience based on their expectations.
  • Attitudes: How someone feels about the organization.
  • Behaviors: How a person choses to interact with an organization.

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Here are some implications of the HxC:

  • Experiences are in the eyes of the beholder. How someone feels about an experience (their perception) is based on their expectations along with the actual experience. So the exact same experience can lead to different perceptions for different people. That’s why you need to think about the expectations you’re setting prior to an experience, and consider delivering different experiences based on people’s expectations.
  • Experiences are judged by the emotions they create. Our memories aren’t like video cameras, they’re more like an Instagram account where we take pictures whenever we feel strong emotions, and then we judge that experience in the future based on reviewing those pictures. That’s why it’s critical to proactively think about which emotions an experience is likely to generate, since those are the elements which will most drive perceptions.
  • Attitudes are important... Many organizations measure attitudes (e.g., a relationship Net Promoter Score) as part of their overall metrics program. This is an important area to understand, because it represents an accumulation of multiple perceptions and can often be a leading indicator of behaviors. That’s why many successful XM programs prioritize their efforts around the experiences that most highly affect attitudes.
  • …But behaviors are the goal. The success or failure of an organization is driven by what people actually do, their behaviors. Over time, you need to make sure that the attitudes you’re measuring have an actual impact on the behaviors you really care about — is NPS really driving future purchases?, or is our employee engagement measurement predicting attrition? If not, look for different attitudinal measurements that are more predictive of those important behaviors.

The bottom line:  Align your efforts around the Human Experience Cycle.

The Evolving Role of CX (& XM) Leaders

Last week I spoke at a local CXPA meeting in Boston. We had a great turnout, thanks to the great work of the planning committee and the wonderful space provided by Education First.

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I led a discussion about the future of CX, which I believe was applicable to all experience management (XM) leaders. One of my key messages was that we need to think of our roles differently as we push our organizations to even higher levels of CX/XM maturity. Here’s how the role of CX/XM leaders need to change:

  • Early stages of maturity: WHAT WE DO. In the early stages of maturity, you need to build a strong team, a clear message, and a solid work plan. You need to enlist a few external supporters, but a large majority of the effort is driven by your team.
  • Middle stages of maturity: HOW WE INFLUENCE. Once you have some momentum and clarity around priorities, your team needs to shift focus from being doers to being facilitators. You need to build a much broader coalition of supporters and collaborators, and support them as they make changes within their organizations.
  • Advance stages of maturity: HOW CX/XM THRIVES. Once you’ve hit the larger stages of maturity, you need to make sure that good CX/XM practices are not only being deployed, but they’re being embraced. You should be helping leaders across the organization to embed the new practices within their core operations, and find ways to continuously improve on them. Deploying good CX/XM approaches isn’t good enough, as those activities must be nurtured so they don’t get stale over time.

I hope you are able to lead your organization to the advanced stages of maturity. If you do, you’ll likely need to change your approach many times along the way.

The bottom line: CX/XM leaders’ job description shifts from doing to nurturing.

The Engaging Power Of Employee Feedback

Does your organization listen to its employees? I mean, really listen and act on what they say. Based on what our research has uncovered, it’s likely that the true answer is “no.” Check out some data from our recent research:

  • In our Q3 2018 Consumer Benchmark Study, we found that 40% of full time U.S. employees strongly agrees with the statement, “My company asks for my feedback and acts upon what I say.”
  • In the report, Employee Engagement Competency & Maturity, 2018, we found that only 40% of executives within large organizations  put a high priority on taking action based on results from employee engagement studies.

Does it really matter? Yes! While there is enormous value from using employee feedback to improve your business, the true win might be in how it improves the engagement level of those employees.

To understand this phenomena, we examined the relationship between how employees think their company listens to and acts on their feedback, and the degree to which those employees are willing to do something good for their company even if it’s not expected of them. Eighty-two percent of employee who strongly agree that their company takes action on their feedback are likely to do something good for the company, compared with only 30% of those who do not agree.

We decided to dig deeper into the data and look at how this relationship differs across employee roles. As you can see in the chart below:

  • Executives (87%) are the most likely to do something good for the company if their feedback is acted upon.
  • Financial services sales or relationship management employees (19%) are the least likely to do something good for the company if their feedback is not acted upon.
  • The “do-good gap” is largest for B2B sales or relationship workers, where there’s a 65-point difference in employees’ likelihood to do something good for the company based on how the company deals with their feedback.

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The bottom line: Employee feedback is an under-appreciated gift.

The Inextricable Link Between CX & EX

CXEX_LinkedIn.pngIf you’ve followed our research, then you know that we’ve always viewed employee engagement as a fundamental component of customer experience.  One of our Six Laws of Customer Experience is that “Unengaged employees don’t create engaged customers.” It just makes sense. How can you possibly expect to consistently deliver great customer experience with apathetic or disengaged employees?!?!

Although the connection between customer experience (CX) and employee experience (EX) may seem obvious to many people, it’s important that we periodically test the linkage. So we took a look at the data from our survey that drove the report, State of CX Management, 2018.

We started by splitting the 194 respondents from companies that have 1,000 or more employees into three groups based on how they rated the customer experience that their organizations currently delivers compared with their competitors:

  • 51 companies that deliver considerably above average CX (“CX Leaders“)
  • 61 companies that deliver slightly above average CX (“CX Moderates“)
  • 82 companies that deliver average or below average CX (“CX Laggards“)

We compared their responses to Temkin Group’s 20-question CX Competency & Maturity Assessment. As you can see in the chart below:

  • The percentage of CX Leaders who earned “good” or “very good” employee engagement ratings is more than 5-times larger than the percentage of CX Laggards.
  • Most organizations have a long way to go on EX; less than 40% of CX Leaders are good at it–and they’re the best!
  • CX Leaders significantly outperformed CX Laggards across all five employee engagement behaviors in our assessment. Here are the gaps in the percentages of companies that either “always” or “almost always” demonstrate these behaviors:
    • My company celebrates and rewards the employees who exemplify its core values (32 %-point gap)
    • My company actively solicits and acts upon employee feedback (35 %-point gap)
    • Managers are evaluated based on the engagement level of their employees (38 %-point gap)
    • The human resources organization is actively involved in strategic initiatives (36 %-point gap)
    • My company provides employees with industry-leading training (31 %-point gap)

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The bottom line: EX is a fundamental enabler of CX.

CX Myth #6: Compensation Drives Good CX Behaviors

CX Myths: Debunking Misleading Beliefs About Customer Experience

Many common beliefs about customer experience are misguided, based on oversimplifications or a lack of consideration for real-world constraints. In this series of posts, we debunk these myths.


CX Myth #6: Compensation Drives Good CX Behaviors

What’s Wrong: Many organizations try to drive behavior change by tying employees’ compensation to customer experience metrics. While some level of compensation tied to CX can be helpful, it is often overdone. When you overly compensate on a single metric, it can often lead to unintended and detrimental consequences. Symptoms of these counterproductive behaviors include pestering customers for scores; focusing on activities that may improve scores, but aren’t good for the business; and actively debating the accuracy of the metrics. Rather than engaging in these activities, we want employees focusing on ways to improve customer experience.

What’s Right: Don’t use compensation to drive behavior change; instead, use it to reward good behaviors. With that in mind, you need to find other mechanisms to drive change, such as appealing to employee’s four intrinsic needs; their sense of meaning, control, progress, and competence. As I’ve previously written, keep in mind these three underlying principles about compensation:

  1. If there is significant compensation tied to any metric (including customer feedback), then people will look for ways to manipulate the measurement.
  2. If people don’t understand a metric, then tying compensation to it will have little impact on their behavior and any downside in compensation may create negative behaviors.
  3. If people don’t understand how they personally can affect a metric, then tying compensation to it will have little impact on their behavior and any downside in compensation may create negative behaviors.

What You Should Do:

  • Treat CX as a team sport. Your customers’ experience is almost never the result of a single person, even if that person is the only one interacting with the customer. So focus on team-level metrics and compensation that encourages key groups of employees to work together towards a shared objective.
  • Use an organization-wide CX metric. Developing a core CX metric for the entire organization that is tied to some compensation (not too large), is a great way to show commitment to improving CX, and it will encourage a regular dialogue about your overall CX performance.
  • Bias rewards towards the upside. Consider starting with a compensation plan that is biased towards upside. In other words, you may want to introduce the plan where there is little negative impact on compensation if the group doesn’t hit a goal, but there is positive impact of they exceed it. This can help eliminate some of the negative perceptions early in a program.
  • Celebrate good CX behaviors. Compensation is not the only reward system in an organization. If you want employees to behave in a certain way, then provide them with positive role models. Find ways to highlight employees who are demonstrating the behaviors that you would like others to emulate. This can include monthly or quarterly awards, shout outs at company meetings, or highlights across your internal communications.
  • Make it unacceptable to game the scores. When an employee asks a customer to “give me a 10 on a survey or I’ll get fired,” can you really count on the accuracy of that customer’s rating? This may be an extreme example of “gaming feedback,” but many versions of this behavior occur all the time. To keep gaming feedback in check, it’s important to be explicit with employees about what the company considers to be unacceptable behaviors.  I’ve identified five rules that you should strictly enforce with employees, which includes not talking with customers about survey questions, scores, or consequences.

The bottom line: Use compensation to reinforce, not force, good CX behaviors.

CX Myth #5: Wow Customers During Every Interaction

CX Myths: Debunking Misleading Beliefs About Customer Experience

Many common beliefs about customer experience are misguided, based on oversimplifications or a lack of consideration for real-world constraints. In this series of posts, we debunk these myths.


CX Myth #5: Wow Customers During Every Interaction

What’s Wrong: While it may be appealing to think about creating an amazing experience every time you touch a customer, it’s just not appropriate or practical. All interactions should aim to meet your target customers’ success, effort, and emotional expectations, but in many cases they aren’t looking to be wowed. And if we put the same energy into all interactions, then we are underinvesting in the situations that matter the most to our customers.

What’s Right: Customer experience is not about wowing customers, it’s about delivering on your brand promises. Otherwise, companies that wanted to be great at customer experience would face an endless escalation of costs as they continue to layer on wow-inducing elements across their customers’ lifecycle. You need to understand how you want to be differentiated in your customers’ eyes (brand promises), and make investments in customer experience that bring those differences to life.

What You Should Do:

  • Elevate your brand promises. If you don’t know what makes you special, then you will never be able to effectively prioritize your resources. Start by making clear brand promises, then embrace those promises by helping all employees understand what those promises mean and what role they personally play in making the promises come to life. Finally, keep the promises by holding each other accountable to them on an ongoing basis and measuring yourself against them.
  • Master key moments. A handful of moments disproportionately impact your customers’ perceptions of your organization, and therefore disproportionately impact their loyalty. First identify these moments, and then invest in making those moments emotionally resonant experiences that reinforce your brand promises.
  • Focus on customer expectations. Delivering a great experience does not mean being better than your competitors. Their brand promises may be different than yours, or they may not be setting the right bar for key moments. Instead, measure yourself against your customers’ expectations. Are you exceeding your brand promises in the eyes of your key customers? If the answer is “an easy yes,” then you may want to consider even more aggressive brand promises.

The bottom line: Don’t try and wow customers, live up to your brand promises.