The Customer Service
By Chip R. Bell and John R.
Most fifteen-year olds graduate from
Schwinn to Chevy by way of anxious dads or drivers education. If you are fortunate enough
to grow up on a farm you get the benefit of practicing with a tractor as a transition.
With large fenced fields and a top speed of 15 mph, even a twelve-year old can solo
without much danger of a serious accident or frightened cows.
Driving a tractor is only slightly more
complicated than a riding lawn mower, expect for one major difference: the dashboard.
"Watch that temperature gauge," a father warned his son about to plow a field of
corn. In the summer heat, a rise in the temperature gauge is a warning to add water to the
radiator. But caught up in an imaginary car race while plowing corn rows, the novice let
the gauge get too high and the engine overheated. That negligence robbed the farmer of a
much needed tool and his son of a much coveted allowance.
The stakes for ignoring the
"dashboard" of a company are much graver than lost allowance. Dashboards are
vital tools for direction, alteration, maintenance, early warning, and the setting in
which the organization is operating. As such, they provide a critical part of the guidance
system needed to traverse the marketplace. Like the odometer of our vehicles alert us to
change the oil or the speedometer warns us to slow down, various components of the
organizations dashboard provide a myriad of information key to progress and success.
The Functional Customer Service
Metrics serve different purposes. Course
metrics communicate information related to direction and progress. Correction
metrics inform ways to alter direction or improve progress. Caution metrics provide
the organization a "heads up" on potentially lies in the path ahead. Context
metrics help educate the organization on the atmosphere in which the enterprise is
Relying on several forms of metrics insures
there is comprehensive information. Conversely, reliance on a single favored metric is the
basis of adages like, "The operation was successful but the patient died" or the
well worn good news-bad news airline joke that ends, "
the bad news is we
dont know in which direction were flying. The good news is weve got a
strong tailwind and were making great time!"
Metrics come in different types. To return
to our tractor radiator example, a metric can be quantitative (like the temperature
gauge that reads 212° Fahrenheit), qualitative (like steam bellowing from beneath
the radiator cap) or inductive. Inductive metrics are largely intuitive conclusions
based on seemingly unrelated data. A professional race car driver would not need the gauge
or steam to sense that all was not right with the radiator. This is the most advanced type
of metric; it is also the most controversial.
Distance to final destination
Speedometer reads: very fast
GPS indicating a dirt road ahead
Passenger with a new map
Strange knock in the engine
Road advisory from AAA
Deep snow on the roadside
Noisy and experienced backseat driver
Previous trouble with engine knocks
No other vehicles coming from the direction traveled
Experience with similar terrain elsewhere
The Dashboard of a
The first set of metrics includes tools to
provide evidence that the organization is "on course," that is, pursuing the
direction intended. Organizations use macro metrics like net income, earnings per share,
or market share for financial course metrics. A professional athletic team might use the
number of games won, concessions collected, and product endorsements acquired. If the
metric were one on the dash of a passenger vehicle it would be the data that told us we
are heading northwest, were ten miles from our destination and getting twenty miles per
Course metrics focus largely on outcomes,
effects, or results. They are those directly tied to the goals and objectives of the
organization. Typically they relate to growth, improvement, and accomplishment. They are
the quantification of the "critical success factors" for the life of the
enterprise. Since, in the words of Peter Drucker, "The purpose of an organization is
to create and retain a customer," course metrics must include some related to
Customer course metrics can be quantitative
like the number of customers retained, the customers lifetime value, or profits per
customer. All this information helps gauge growth and improvement. Qualitative customer
course metrics could be anecdotal comments from customers that communicated progress
("My neighbor said I should give you a try") or improvement ("Glad to see
you finally got a friendly receptionist"). Inductive measures might include front
line employee comments that customers dont seem as enthusiastic as they once were.
The second set of metrics includes tools to
better adjust progress and maintain effectiveness. These are the means by which an
organization gains a deeper and more complete understanding of a course metric. Correction
metrics enable an organization to alter direction, change strategy, or do preventive
maintenance on some part of the organization. This type of metric focuses on the
processes, means, or cause. As the course metrics are outcome measures, correction metrics
are diagnostic measures.
If an athletic team was losing games (a course
metric), the coach might examine correction metrics such as the number of points
gained per particular tactic or play, time of ball possession by each player, percent of
shots successfully made, to conclude that John needs to pass the ball more, the team needs
to improve accuracy at the foul line, and the team is under utilizing a full-court press
when they are within four points of the opposing team. Correction metrics enable
performance as course metrics affirm performance.
Quantitative customer correction metrics
might include customer retention by particular segment or product, customer satisfaction
scores by type of customer, length of customer relationship, or share of wallet by
segment. Qualitative customer correction metrics would be types of customer complains,
types of errors that trigger refunds, correlations between customer satisfaction scores
and some demographic figure, or reasons customers give for leaving. Inductive customer
correction metrics might include anecdotal information that the customer does not provide
that might otherwise be expected (such as the customer who is closing a banking account
yet not moving).
Identifying the right correction metrics
starts with a complete dissection of the course metrics. For example, if a key course
metric is the number of customers under age 25 who re-enroll after one year, the
correction metrics might be derived from interviews with those who stay versus those who
leave to find out the predominant reasons for both. If the number one reason given for
customer turnover is the lack of communication when a customer signs up for a second year,
the correction metric might be the number of customer visits made within 60 days prior to
enrollment. Every course metric is comprised of many correction metrics. The goal is to
have enough to be comprehensive but not so many as to be unmanageable.
The third set of metrics includes tools to
provide information (a.k.a., intelligence) needed to shape or change direction
(offensively) or to respond defensively. This is data vital to effective early warning.
The athletic team mentioned earlier might look at "next years schedule,"
scouting reports, or an announcement that a key opponent just recruited a renowned
offensive coach. Our tractor example might include quantitative information like the
odometer reading since the last radiator overhaul, qualitative data like the long range
weather report, or inductive information like whether the dogs fur is thicker than
last year indicating a particularly cold winter ahead.
Quantitative customer caution metrics might
be those associated with long-range demographic variations, industry projections, and
anticipated psychographic changes in a target population. Qualitative customer caution
metrics could be results from pilots, focus groups, industry predictions, and futuring
studies. Inductive customer caution metrics might be the advice of long-term employees who
have witnessed trends and the organizations reaction to them, or the hunches drawn
from comparing projected demographics with predicted psychographics. Customer caution
metrics are by definition tentative and predictive.
The final set of metrics includes the tools
to better understand the setting or marketplace and where the unit or organization is
relative to that milieu. Putting a tractor through the paces on a hot day will have a
completely different impact on the radiator than the same actions in the dead of winter.
Athletic teams fare better with a home-court advantage. Understanding the environment is
crucial to success since no organization performs in a vacuum.
Business metrics would involve comparisons
to competition including industry averages, comparative studies, or assessment of
reputation. Quantitative customer metrics include how other similar organizations fare in
the same market conditionssame store churn compared to similar companies or industry
standing in revenue per available room. Qualitative customer metrics might be the number
of times the company is favorably mentioned in a trade journal, rankings in independent
surveys, or recognition from the community, industry or profession. Inductive customer
metrics might be the number of top performers being recruited compared to the competition
or employee turnover and where they find new employment.
Context metrics paint a picture of the
particular environment in which the organization is operating at a point in time. Such
metrics help insure an organization does not become so myopic or inwardly focused that
competitive mistakes are made. Think of course metrics as answering the question:
"How are we doing compared to our objectives, goals and mission?" Correction
metrics help answer: "What variables are keeping us from being on course?" Caution
metrics show "What lies in our path that might impact our course or progress?" Context
metrics help answer the question: "How are we doing compared to our competition or
other organizations like us with similar challenges?"
Using a dashboard has its advantages and
limitations. Too many athletic teams have lost games focusing on the scoreboard instead of
playing the game. The flip side of metric myopia is the novice farmer who completely
ignores the dashboard, leaving a tractor radiator in distress. All dashboards are an
assortment of measurements and signals. And, measurements have principles that govern
their effective management. Below are a few that might optimize how measurements are
Metrics and numbers are not the same
There is a funny Saturday Night Live comedy
routine that has the sports announcer giving the ballgame scores without the names of
teams, "And, now for the basketball score. 89-75, 92-80, 75-74
halftime score: 45." The spoof dramatizes the pointlessness of calculations without a
A metric is a tool used in conjunction with
a standard to help measure, monitor or evaluate. Two key wordstool and
standardtell the tale. A metric is a tool. That means that in and of itself, it is
useless. It requires a skilled and thoughtful handler to harness its power. It is also
"used in conjunction with a standard," not in a void. We are impressed when
someone birdies a hole, shoots a three pointer, or pitches a no-hitter all because
athletic standards have been established that determine excellence. Without a clear
standard on the business end of the metric, it would be as inane as a score without a
Metrics are the dashboards of the business
world. And, numbers are a popular language, especially the closer you get to mahogany row.
However, arithmetic does not tell the whole story. As reassuring as irrefutable numbers
might be, qualitative information may be more helpful. The patient who reports a very sore
throat, severe headaches, and ringing in the ears may be telling the physician much more
useful information than the numbers the doctor read on the thermometer or blood pressure
gauge. Be careful of an infatuation with numbers. It may seduce you into ignoring the
standard, forgetting the context, and misusing the tool.
Dont use a ruler to measure if
your fever is too high
Measurement management includes the
selection of the right tools. Just like the one in an automobile, an effective dashboard
is comprised of a variety of types of metrics. We use "pounds per square inch"
and tread depth to determine if a tire is in working order; weight and quarts to measure
the right viscosity and quantity of oil. To say we have fifteen gallons of air in the auto
tires would be interesting, but pointless.
Measurement selection starts with a careful
identification of the critical success factors of an organization. The movement in
corporate accounting from net earnings to EBITDA (Earnings before interest, taxes,
depreciation and amortization) was a positive example of selecting a tool that reflected
the type of earnings that line managers influenced. Eighty-five percent of customers who
leave an organization for a competitor, when asked say they were completely satisfied.
Therefore, customer service metrics that monitor satisfaction (rather than customer
devotion) lull the organization into thinking it is giving great service when it may be
only giving adequate service.
The dashboard is meaningless if it measures
the wrong items. Begin with measurements of key service quality features that the customer
deems important. A company was responsible for delivering their customers equipment
all over the country on a very timely basis. Their focus had been on order accuracy and
the absence of damage to the equipment. However, a customer service survey revealed that
for customers "on time delivery" was crucial. The company shifted from focusing
solely on order accuracy and quality to a dashboard metric that measured timely delivery
of equipment. Critical success factors mean "critical," not "nice to
When the only tool you have is a hammer,
all problems look like nails
This line is Abraham Maslows famous
quote that captures the essence of another measurement management issue: inappropriately
overusing a favorite metric. "Bottom line results" is a metric too often used to
inappropriately justify, add, or exclude countless valuable efforts. But as one executive
said, "If every decision was made on the basis of solid, quantifiable numbers, you
could hire a data clerk to be CEO." The most important organizational decisions often
rely on a thoughtfully considered leap of faith.
All important gauges dont measure
cause and effect. Dramatically increasing customer loyalty is not guaranteed to increase
profits if the store is in the wrong location and purchasing is paying too much for
inventory. As much as customer service gurus would like to promise cause and effect, there
are typically more variables in the profit mix than customer sat.
Anything not worth measuring is not
worth measuring well
Gathering data to transform into metrics
can be laborious. It is important to be selective and to only make data as precise as is
needed to achieve the purpose. Calibrating each dial to cover every conceivable
contingency not only creates data overload, it leads to "working the math and missing
the point." Keep in mind that metrics are toolsa working language that paints a
picture or tells a story. It is the picture or story that becomes a call to action, not
A bank found a strong relationship between
teller turnover and customer satisfaction among branch customers. The correlation was not
surprisingcustomers did not like training a new (and slower) person on their
particular banking habits, needs and requirements. But, instead of managing turnover the
bank turned their energy onto getting even more precise information on what turnover
impacted. It created reams of irrelevant information and delayed implementation of a
correction to the problem.
Metrics Belong on the Wall not in a
We want the dashboard to have maximum
impact on the way we do business. In order to do this we must make sure the information is
easily accessible and/or widely disseminated throughout the company. Too often senior
management puts the dashboard metrics under "lock and key" rendering it
unavailable to employees on the front line. Or, they provide a severely delayed version
that has been sanitized by the marketing department. Done sometimes to "keep
competitors out of the info" its effect is to rob employees closest to our customers
of timely information useful information needed to maximize customer service.
Wise organizations sacrifice measurement
purity for feedback urgency. They also know that 80% of the data now is better than 100%
of the data late. In the fast-paced, ever-changing marketplace in which organizations
operate today, real-time not only mean quickly, it means "real," as in authentic
Dashboards Are Only a Part of the
"Occasionally glance at the dials on
the dashboard, but mostly keep you eyes on the road," comes straight out of
Drivers Education 101. It is a reminder that the customer service dashboard is only
one part of a larger guidance system that includes a strategic plan, financial plan
(budget), corporate standards, service vision, behavioral norms, performance objectives,
and many other tools that enable the organization to effectively navigate in its
marketplace. Keep the dashboard in perspective as a tool.
Being a part of guidance system also means
the customer service dashboard must be in sync with other tools for navigation. While
being anchored to up-to-date customer needs and requirements is sacrosanct, being aligned
with the organizations vision is equally crucial. It is important the elements that
make up the dashboard be periodically reviewed to insure what is used is relevant and fits
with the rest of the guidance system. Will the dashboard metric assess the companys
success as defined in the strategic plan? Will a metric measure performance aligned with
core values? Will they assist in monitoring the customers experience to see how
closely it matches the companys service vision for that experience?
In his book Sea of Cortez, John
Steinbeck describes a fishing expedition in this way:
The Mexican sierra has 17 plus 15 plus nine
spines in the dorsal fin. These can easily be counted. But if the sierra strikes hard on
the line so that our hands are burned, if the fish sounds and nearly escapes and finally
comes in over the rail, his colors pulsing and his tail beating in the air, a whole new
relational externality has come into beingan entity which is more than the sum of
the fish plus the fisherman.
The nature of customer service is a
fundamentally a relationship based on an implied covenant to exchange value for value.
Feelings characterize it more than facts; emotion more than logic. As comprehensive and
accurate as our metrics may be, they will never completely assess or describe the magic
and mystery of that relationship. With our objective data, tidy calculations, and
sterilized reports, we must never forget to rely on the unscientific report of those
directly involved in creating the magic.
Chip R. Bell is a senior partner with
Performance Research Associates and manages their Dallas office. He is the author of
several best-selling books. His newest book is Magnetic Service: Secrets for Creating
Passionately Devoted Customers (with Bilijack R. Bell). John R. Patterson is president
of Atlanta based Progressive Insights, Inc., a consulting firm that specializes in helping
organizations around the world effectively manage complex culture change built around
employee and customer loyalty.