Setting the Right Business Metrics

Perhaps it’s time to allow customer-facing staff to be more empathetic with customers, What is clear is that some companies are not focused on the right metrics, and empathy can’t be the sole metric. Companies really need to understand their key performance indicators; their comparative priority and how each department can contribute to their delivery, creating a clear cascade of targets throughout the business, foremostly on call center service. Start with the customer and work back; you’ll be able to determine them, and find out whether the metrics are the right ones to use. Don’t change them if they are clearly delivering accurate and measurable results, and particularly if they are enhancing customer experience and fulfilment.

But targets can demotivate staff and customers. If a target leads to staff behaviour that is detrimental to the customer experience of engaging with your company, then customers are less likely to want to remain loyal and buy anything from you. However, if the target helps customers, and delivers a higher level of service or value that they can obtain elsewhere, then they are likely to buy more from you and become more profitable. From an employee perspective targets are demotivating if the bar is set too low, or if it is set too high; or the reasons behind them are not fully understood.

The culture of the organization might be at fault, determining the way that targets are set. That means it’s important to know whether the target encourage good or poor performance. In actuality organizational culture often encourages a ‘play to win’ or a ‘play not to lose’ game. Staff that play to win see each customer as opportunity; they want to help and make a difference to the customer. The others just ensure that the target is met at all costs. This can lead to pressurized selling, which doesn’t have any conce
for the customer. The salesperson might instead be more focused on increasing his commission than fulfilling a customer’s needs.

To avoid setting targets and using metrics that encourage poor interactions with customers, you need to understand how they can be set effectively. Targets should be agreed between those setting and delivering them. This necessitates being open and honest, allowing everyone in the organization to understand them and appreciates why they have been set.

An example of effective target setting is shown by the following case study, involving a medium-sized financial services organization. The company was faced with increased competition, and its performance was suffering due to an uninspiring product set, and part of its channel was under-performing. Managers realized that a complete overhaul of the business and its operating model, the product set and the key workforce and performance management elements was required.

By undertaking these steps the company has seem a major transformation in its call center services, channels and business operations. The new operating model has driven down costs, and the product range is more competitive than it was and better positioned in the market. The company now benefits from greater clarity with respect to its performance targets and the means of accountability for when they are not achieved.