Wednesday, October 19, 2016

Two Major Flaws of Your Customer Listening Efforts

I originally wrote today's post for Clicktools. It appeared on their blog on March 31, 2016. I have modified it slightly since then.

Are you listening to your customers? What are you doing with what you've heard?

In order to transform the customer experience, it's critical that you listen to your customers. Unfortunately, customer listening has two major flaws - or, more accurately, companies have two major shortcomings when it comes to customer listening.

The first flaw is: lack of action. You've got tons of feedback, tons of data, and you do nothing with it. What a shame! You really are just "collecting" feedback, like you collect stamps, as I like to say. Like those stamps, the data sit on the proverbial shelf and age and get dusty. Stop the madness! Your customers have given up their precious time to tell you what you're doing right and what you're doing wrong. They're trying to help you. And yet you waste that feedback by doing nothing with it. It becomes worthless.

Why? Here are some issues that lead to inaction. You...
  • don't know where to start; you know you're supposed to listen but don't know where to go from there.
  • haven't outlined clear objectives for your listening efforts.
  • haven't engaged with stakeholders to find out what they'd like to learn from customers.
  • haven't asked questions in a way that they are actionable.
  • haven't asked the right questions, so the data itself isn't even actionable; specific improvements aren't apparent.
  • haven't assigned owners to questions to ensure you know who's accountable for each feedback item.
  • haven't asked open-ended questions, which can add rich commentary and details to help you hone in on specific issues.
  • don't analyze the feedback/data.
  • analyze the data but don't link it with customer data existing in your CRM system, bringing the customer to life and allowing for more customized, personalized improvements.
  • don't know how to analyze the feedback to tease out the story, the actions to be taken.
  • don't know what the analysis means, assuming you analyzed the data, or how to interpret it to make it actionable.
  • don't know how to share the data in a way that it can be acted upon.
  • don't share the data with those who need to act on it.
There are more reasons that customer feedback goes stale and isn't used. I'll leave it at the for now. If you think of other reasons, please leave them in the comments below.

Let's move on to the second flaw.

Have you ever heard of Goodhart's Law? It states: When a measure becomes a target, it ceases to be a good measure. According to Wikipedia, its origin lies in finance and economics:

The original formulation by Goodhart, a former advisor to the Bank of England and Emeritus Professor at the London School of Economics, is this: "As soon as the government attempts to regulate any particular set of financial assets, these become unreliable as indicators of economic trends." This is because investors try to anticipate what the effect of the regulation will be, and invest so as to benefit from it.

You probably already know where I'm going from here. The second flaw is: the metric, not the customer, becomes the focus.

This is a big problem, and quite honestly, it's also one of the issues that should be added to the list above of what causes inaction. Companies focus on the metric, on moving the metric, and not on the customer and the customer experience. Listening becomes all about "How do we rate today?" And while it's good to gauge your performance, the movement of the metric is an outcome down the line - the first area of focus ought to be: what's going on with the customer experience and how do we improve it. Instead, too many conversations start with, "How do we improve the metric?" not with "How do we improve the experience?"

A metric is just that, a metric, a way of measuring your progress. If you make it the endpoint, you'll fail at the journey.

Metrics can help to rally the troops around the customer – but that’s only if they're presented in the right context. It’s not the right context if you…
  • mention the score without even talking about the customer and the customer experience (yes, this does happen!)
  • game surveys (selecting certain customers, surveying at a specific time when you know scores will be better, offering incentives a la "the car dealer curse," etc.) just to get a score
  • threaten disciplinary action or lost compensation if an employee doesn’t achieve a score, especially if the employee doesn't have a clear line of sight to his impact on the customer experience or understand what the score links to
  • do tactical things to move the needle rather than big picture thinking about how to improve the experience
How can you avoid the metric becoming the target rather than the indicator? Consider these suggestions:
  • Talk about customers and what your customers are saying about the company and its products and services
  • Make the metric the last thing you talk about – or don’t talk about it at all
  • Tell stories about customer successes and customer painpoints
  • Focus on employee behaviors and what it takes to improve the experience
  • Share customer feedback, verbatims, emotion, and what's important to customers
  • Act on the feedback
  • Coach and praise based on feedback and the experience the customer had
  • Focus on customer outcomes first, then business outcomes
  • Ensure that employees have a clear line of sight to the customer
  • Give them a clear understanding of how they contribute to the customer experience
  • Build a culture where the customer is at the center of all you do and no decisions are made unless we ask, "What would the customer think of this?"
Don’t measure for the sake of measuring, and don’t listen just for the sake of measuring. Listen because you want to understand the customer and where the experience is falling down (or standing up). And then act on what you hear. Don’t just focus on improving the score; improve the experience, and the numbers will follow.

If you reject feedback, you also reject the choice of acting in a way that may bring you abundant success. -John Mattone


4 comments:

  1. I once heard Goodhart's law expressed as:

    "Hitting the target but missing the point"

    It is something that all executives and politicians should be made aware of, yet sadly so few are.

    ReplyDelete