A young woman in a research project I was conducting a couple of years ago told about a particular service provider she had called, angry as hell, fully intending to cancel her service. But the representative she encountered on the phone changed everything.
"I was really angry," she said. "As far as I was concerned, they had sold me the wrong service and I was paying far too much. But the woman on the phone was wonderful. She seemed to really care about me. She made sure I got the right service. She talked with me like a friend." In the end, the customer was fitted with the correct service and was quite happy.
Now, that's performance. But chances are, the service rep who helped our research participant did not get rewarded for her troubles. In many firms, incidents of successful performance such as this go unnoticed and unrecorded.
‘An employee who is rude or can't answer a question isn't performing, regardless of how quickly she answers the phone.’
There seems to be lots of attention being paid these days to how organizational performance can be managed and what measurement tools should be put in place to evaluate performance. Typically, however, the focus is on tactical, transactional, functional performance. How well do we deliver the things that customers expect us to deliver?
The notion of performance management implies that the organization has some preconceived idea about how it and its employees should perform. It also implies that some measurement regimen is in place to allow them to assess how well the company is performing. There is a suggestion that superior performance will be rewarded, or at least acknowledged, and that it is important in supporting some higher corporate goals. The assumption is that, if we perform well, customers will be more satisfied, will return to buy again, will become loyal, spend more money and recommend us. If we fail to perform well, all of this is in jeopardy.
The problem is that, unlike the experience of our research participant, the service representatives in many companies would not have taken the time to solve an irate customer's problem. That's because most companies still measure performance in terms of how much time a representative spends on the phone with the customer. The most important aspects of her performance and her success in salvaging and strengthening the customer relationship are missed.
Unsung interactions
We need some way to measure, capture and observe the softer elements of performance, those that involve how well employees interact with customers and how they influence the quality of the customer experience. In the world of customer centricity, performance management must be redefined to focus more on the performance of different forms of behavior.
My experience is that the "performance" that is of greatest interest in most companies is all about processes and procedures—and how well these are performed. The objective is to achieve high levels of efficiency, accuracy and responsiveness. Companies appear most interested in on-time delivery, efficient handling of customer calls, accurate billing and speedy response times. We see this time and time again, mainly because these are the things that are most easily measured in organizations.
In most companies, performance management tends not to address areas of experiential or interpersonal performance. The focus of performance management is typically and predictably on things that management feels comfortable with and that are easy to measure because data can be captured and applied to the assessment of performance.
Measurement is an integral component of performance management so that companies are able to identify where performance falls short of desired results and improvements can be made. Certain standards or performance are set, suggesting that there is a good understanding of what level of performance will drive customer satisfaction and implying that, if performance falls below these standards, customer satisfaction—and ultimately loyalty—will suffer.
But where does such an approach to performance management fit with the customer-focused organization of today? Progressive companies have moved well beyond the efficient, tactical, transactional approach to service delivery, recognizing that these are increasingly "table stakes" and tend to be more focused on delivering positive customer experiences.
Such a focus on performance management calls for different approaches to measurement. It has implications for employee recruitment, training and motivation. In this way, businesses will ensure that a customer interaction with their organization is being delivered by employees who can perform in such a way as to achieve desired outcomes. This means that human resources will need to play a stronger role in defining customer-oriented performance management. Organizations will increasingly have to ask: What kind of performance drives loyalty and positive customer relationships? And how do we encourage such performance?
The performance that gets attention from customers typically involves what are often referred to as "little things": pleasant gestures, the nice touch, thoughtfulness, caring—things that are perceived to be difficult to measure but are, nonetheless, exceedingly important to deliver. Companies must decide what results they want to achieve with respect to their customers. Those that have adopted a customer-focused view of the world will realize that performance management means more than accurate bills, on-time delivery and the processing of a certain number of transactions per hour. If they really want to perform, they will have to engage their employees in behavior that addresses the softer side of what customers want from a company.
What's obvious to me, having spent more than 30 years trying to understand customers, is that customers don't limit their view of performance to the efficient and accurate delivery of service. An employee who is rude or can't answer a question isn't performing, regardless of how quickly she answers the phone.
There is a "softer" side of performance that is not captured in an efficiency-based view and that is at least as important in driving customer satisfaction and loyalty. It must be included in a contemporary view of performance management.
Taking such a view will, of course, require that we are also able to measure how well we are delivering on this kind of performance. This is not difficult. Customer-tracking research and feedback must include questions that tap into how friendly, helpful and understanding employees are in dealing with customers; how they do at making customers feel comfortable and listened to; how well they instill trust and confidence in our brand, how well they diffuse confrontational situations, and over all how they make customers feel toward the company.
We are already measuring these kinds of things in assessing the health or quality of customer relationships, and increasingly, clients with whom I work are incorporating them into customer tracking surveys that are intended to measure performance. This is absolutely essential if we are going to really understand how we are performing in the eyes of our customers.