What gets measured, gets done! Constant measuring, controlling people in old ways (the ‘industrial paradigm’), keeping an eye on the quantitative KPIs, that’s what will get done; efficiency without a heart, a business at risk to be outrun by competitors who add meaning. No inspirational framework (see preceding article in this cycle of 6) can help. When setting out to generate customer advocacy, you have to keep your eye on the horizon (purpose, why, ‘dream’), and at the same time on the bottom-line -the art form is to combine the two in the governance of an organization.
NPS just as useless as KPI as CSAT, unless …
Since Reichheld published his book, many companies have embraced the Net Promoter Score (NPS), thinking they added the ultimate KPI to monitor customer loyalty. In reality, they added a KPI that is as meaningless as customer satisfaction if you don’t know what is driving the score. NPS shows, as with customer satisfaction whether, in the perception of the customers, things are being done right or not. Yet neither KPI shows what is being done right, or not. NPS, like customer satisfaction, can only become meaningful if you identify and respond to the key drivers of the score. And that’s only the beginning.
Iceberg
People in company’s operations must be enabled to see the big picture. They need to be enabled to connect what they do on a day-to-day level to the results of the company. Awareness of their contribution to, and role in the bigger picture impacts their ability to not only do things right, but also do the right things. They need to learn and to grow into doing what is right for the company, and the customers they serve. Think of an iceberg. NPS and customer satisfaction are just the tip of the iceberg. If you don’t identify and respond to what is below the surface, measuring becomes a pointless exercise. It will not be possible to structurally impact either KPI.
Moving targets
In addition, both KPIs are ‘moving targets’. Consumers are ‘educated’ by providers of other products and services and competitors. Their demands shift all the time, getting more refined with each new purchase. Does your organization have the ability to adapt to their moving targets? If only the two KPIs are measured, it does not. Additionally, you need to pay attention to the nuances of benchmarking. The customer loyalty monitors that compare across an industry show your company’s performance in comparison with your competitors. Have you seen material changes over the last couple of years? It is likely to be a pretty flat line, minor changes, reflecting operational improvements, yet are they significant improvements? Evidence of a trend that is significantly outperforming all competitors? Customer advocacy requires that you dig deeper.
Digging deeper and border-crossing
In summary your organization, to have an effective customer advocate governance approach must to learn to:
- Make the intangible (meaning for employees and customers) tangible.
- Integrate quantitative and qualitative KPIs, not just from a company perspective (inside out), but also from an employee perspective (their engagement), and a customer perspective (outside in), adding their perceptions, their learning, and the bottom-line impact of their perceptions.
- Integrate output (operational efficiency), outcome (effectiveness from an internal perspective) and impact (effectiveness from the customers’ perspective, creating game changing experiences).
- Integrate KPIs across organizational boundaries, creating an overview across departments and silos.
- Create an overview across organizational boundaries, facilitating border-crossing connections and dialogue, aligning departmental goals and organizational goals, creating synergy, focus and ownership of a shared goal.
- Avoid isolated departments chasing their own goals.
When your organization has set itself the goal to turn customers into ambassadors, you need a holistic governance framework that will balance quantity and quality as perceived by your employees and your customers. A framework that will combine output (internally driven, efficiency, operational excellence) and impact (external perspective, determined by the perceptions of employees and customers (figure below).
Holistic governance framework
A holistic governance framework that enables your company to connect performance areas that are often only visible at a departmental level, such as ‘share of wallet’ (sales), ‘profitability’ (finance), ‘brand’ (marketing), ‘customers’ (customer service) and ‘employees’ (Human Resources), so that people start to see the bigger picture and start to understand how the so called ‘soft’ side impacts the ‘hard’ side of the business. To foster customer advocacy in the organization and make it sustainable, you have to make the correlation visible between behavior (of employees and customers) and business results. It must be made tangible, and measurable to be manageable. You have to create visibility between border-crossing performance areas and create a sense for how they correlate and impact each other (see example figure below). Be careful with incentives, ensure that they strengthen each other instead of working against each other. Incentives at team level are usually much more effective than individual incentives.
Ecosystem
The art is to craft a healthy ecosystem (remember the metaphor of a garden from an earlier article in this cycle) in which talking and doing are consistent, quality and quantity are balanced, and the immaterial is weighted equally with the material, from a source of care, an essential form of involvement with, and commitment to the world, your employees, customers, shareholders, and all other stakeholders of your organization.
This is the fifth article in a cycle of 6 articles on the theme “Recalibrating Care” in which you are taken on a journey to what care and customer advocacy (NPS) mean for a sustainably successful and profitable organization and what is needed to generate customer advocacy, inspired by Fred Reichheld his newest book.
Image source: author
