The Customer Service Dashboard

By Chip R. Bell and John R. Patterson

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 organization’s dashboard provide a myriad of information key to progress and success.

The Functional Customer Service Dashboard

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 "head’s up" on potentially lies in the path ahead. Context metrics help educate the organization on the atmosphere in which the enterprise is operating.

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 don’t know in which direction we’re flying. The good news is we’ve got a strong tailwind and we’re 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.

The Dashboard of a Passenger Vehicle

Course

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 gallon.

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 results.

Customer course metrics can be quantitative like the number of customers retained, the customer’s 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 don’t seem as enthusiastic as they once were.

Correction

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.

Caution

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 year’s 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 dog’s 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 organization’s reaction to them, or the hunches drawn from comparing projected demographics with predicted psychographics. Customer caution metrics are by definition tentative and predictive.

Context

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 conditions—same 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?"

Measurement Management

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 effectively employed.

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…here’s a halftime score: 45." The spoof dramatizes the pointlessness of calculations without a context.

A metric is a tool used in conjunction with a standard to help measure, monitor or evaluate. Two key words—tool and standard—tell 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 team.

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.

Don’t 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 have."

When the only tool you have is a hammer, all problems look like nails

This line is Abraham Maslow’s 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 don’t 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 tools—a working language that paints a picture or tells a story. It is the picture or story that becomes a call to action, not the math.

A bank found a strong relationship between teller turnover and customer satisfaction among branch customers. The correlation was not surprising—customers 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 3-Ring Binder

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 and raw.

Dashboards Are Only a Part of the Guidance System.

"Occasionally glance at the dials on the dashboard, but mostly keep you eyes on the road," comes straight out of Driver’s 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 organization’s 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 company’s success as defined in the strategic plan? Will a metric measure performance aligned with core values? Will they assist in monitoring the customer’s experience to see how closely it matches the company’s 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 being—an 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.