June 21, 2024

Paradoxes in Customer Feedback: Tying Compensation to Experience and Measuring Safety vs. Production

2 min read
The Importance of Customer Science for CIOs

The world is more interconnected than ever before, and customer feedback has become an essential tool for companies to understand their customers’ needs and expectations. One example of this is the recent loss of $1.3 billion in market value by Snapchat after a tweeted complaint from Kylie Jenner. Another example is the $1.6 trillion loss in 2016 by US companies due to poor service, which highlights the power of customer feedback in today’s world.

One challenge faced by organizations is the paradox of not having someone with the authority to ensure every interaction meets or exceeds customer expectations, even though “Customer is King.” This paradox raises questions about the role of positions like chief customer officer or chief experience officer in addressing it. Glenn Laverty, former president and CEO at Ricoh Canada, resolved this paradox by tying every employee’s compensation to customer experience/satisfaction metrics.

Another challenge faced by organizations is the importance of measuring and rewarding certain behaviors to drive desired outcomes. For example, at Boeing, production throughput compensation metrics were prioritized over safety considerations, leading to unintended consequences. Customer science can help align everyone’s compensation with customer experience metrics in a calibrated and nuanced way.

Claes Fornell, founder of the American Customer Satisfaction Index, also points out a data paradox in customer science – despite collecting vast amounts of customer data by organizations, they seem to know less about how to satisfy their customers. This disconnect between data collection and customer satisfaction needs to be addressed in order to truly understand and meet customer expectations.

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