Most company executives don’t think that their accounting department is in the Customer Experience business. True, very few members of financial management teams normally have a reason or opportunity to communicate directly with their company’s customers unless they have to chase accounts receivable problems.
The new CFO of a company I was working for took pride in maximizing operational cash flow velocity. One of the minor tactical tools used was a few days’ increase in the window for reimbursing employees’ expense reports. This change handsomely improved the short term cash flow statement. However, over the next few quarters, a noticeable trend in the growth of outstanding accounts receivable started to raise red flags and call for analysis.
You may ask what this has to do with Customer Experience Management. Interestingly enough, all measurements of customer satisfaction and loyalty, both objective and subjective, started to move in the opposite direction from the operational cash flow velocity metric within the first two months of the change in reimbursement policy. The Customer Experience Manager was reporting this troubling trend for months, but nobody thought of a connection. In fact, nobody ever looked at financial and loyalty metrics together at all, and that is why it took so long to link the cause and effect.
It turns out that the technically complex product the company sells routinely requires professional services personnel to visit customer’s premises to help them ensure successful implementation and operation. The company’s engineers spent a lot of time making customers happy, and the company was paid well and on-time for their efforts. However, improving the velocity of the company cash flow negatively impacted personal cash flow of the front line employees, as they had to wait for sizable expenses to be reimbursed and had less cash for their personal expenses. They started to avoid and delay the projects that required travel, and customers fell victim to financial efficiency efforts.
Lessons Learned:
- Customer Experience is a holistic matter – every single function of the company affects how customers perceive the entire enterprise. Of course some functions affect more than others, but they all do.
- The Customer Experience measurements are predictive of the growth or demise of a company (product or brand). The trends are critical indicators of trouble, particularly if they are gauged against market averages.
- Monitoring the correlations of trends between Customer Experience, Operational and Financial metrics allows for the fast diagnosis of potential treats to the health of your business.
This is an excellent example of a concept I’ve been noodling. Who is the customer of the back office operations and support departments? The suits in charge will grandly orate on the end customer and his or her singular happiness as the key to those departments, but the suit never, ever touches that end customer. Therefore, the end customer is NOT the customer of the back office and support functions.
Rather, it is the front-line employee who is customer facing all day, every day who should be graced with an unencumbered and simple set of support processes.
Clearly, the new CFO falsely identified the executive suite and the stock holders as his primary customer – and they are his customers. But not his primary customer. His primary customer is the front line, and any action that impedes progress or incentivizes regress will accomplish the faltering experience as you related.
Jim,
Thank you for the kind words.
Fragmentation of corporate view of a Customer and it’s negative impact on Customer Experience are well documented by experts and sadly experienced by many customers. I think one of the problems is that back office departments “speak” in data/metrics, while customer experience is communicated in “stories”. This post illustrates an importance of correlating the two.