By Phil Klaus
The employee, the forgotten asset? Forgotten is a day and age when the consumer calls the shots and consumer to consumer (C2C) interactions seemingly rule the business world (Klaus 2013a; 2013b)? Or, has the tide turned again, and managers do recognize that employee retention is crucial from both a primary (think cost of hiring, training, and possible loss of productivity by hiring a new employee), and secondary cost factor (e.g., disengagement, customer service and errors, and a negative cultural impact caused by high turnover)? Let’s start out investigating the ‘status quo’ of employees in today’s business environment, with a special focus on services.
A few months ago I had the pleasure of listening to Prof. David Bowen’s (Thunderbird School of Global Management) excellent presentation about the employees’ ‘disappearing act’ in service research. Reflecting upon his presentation I couldn’t help but think that managerial practices seem to have forgotten about the employee too. Consulting clients on a regular basis, I am still puzzled about the fact, which is backed up by my research, that more frequently than not crucial interactions in forming the CX are executed by the worst paid, least trained, and often the organization’s most under-appreciated employees. But why? Are managers still assuming that the level of service they provide is ‘pretty much the same as everywhere else,’ or even still see employees as costs rather than assets? The same managers, when asked about a recent bad customer experience, will identify with pinpoint accuracy an interaction with an employee as the main source of their frustration. Why can’t managers relate to their own experiences and translate these into actions? But, that’s a different story.
Throughout our investigation into managers’ possible rational behind their, often quite apparent, lack of attention towards the employee, we received two main explanations: first, employees deliver an equal level of service, compared to their competitors, and, second, employees are considered to be a cost, rather than an asset. All my research exploring the most profitable CX strategies and management programs (see Klaus 2014a) highlight that these arguments do not hold up. The three key factors differentiating the most successful CX strategies from others are: measuring CX in an insightful way, revolving your CX program around the customer, and effective CX delivery.
The latter exhibits interactions with service personnel as a crucial determinant of consumer behavior, e.g., purchasing, repurchasing, word-of-mouth behavior, and share-of-category. The more employees are recruited, selected, trained and remunerated based upon CX deliverables from the customers’ viewpoint, the more profitable the firms are. The most advanced and profitable firms extend this notion to their suppliers and fulfillers, to make certain that all customers-employee interactions deliver upon the CX promise (Klaus 2014b; 2013a).
Think about it, how good is the CX with your telecommunication provider if the call center employee from abroad is focused on a short turnaround time rather than finding a solution for you? I am certain that all of you can come up with a story, or two, where your CX was devalued or destroyed by such an interaction. There truly aren’t any valid excuses to ignore the importance of EVERY customer-facing employee. Employees hold the key to customers’ behavior, and you need to take good care of them if you want to succeed in a CX-driven economy (Klaus 2014). This can be achieved by:
- Hiring the ‘right’ people based on the experiences your customers are looking for. Think ‘soft’ versus ‘hard’ skills and vice versa.
- Investing in your employees – it will pay off.
- Demonstrating trust by giving employees the autonomy and authority to act upon the customer needs in the situation at hand.
- Going beyond the ‘service with a smile’ attitude.
Managers need to realize that an employee is, first, and foremost, an asset for their CX program, not a cost position. If latter is the case, you might be doing something wrong in the first place.
In this series we now discussed which CX strategies are most profitable, explored how these strategies are converted into a successful multichannel strategy, and outlined the crucial role customer-facing (direct and indirect) employees play in managing the CX. In my next post I’ll be discussing some of the key challenges for executives wanting to take advantage of the CX opportunity – how to gain support from the boardroom in order to compete successfully on the new competitive battleground – the customer experience. I look forward to your CX questions that I will answer during the Center for Services Leadership podcast.
Dr Phil Klaus is Professor of Customer Experience and Marketing Strategy and holds multiple visiting professorships around the globe. His multiple award-winning research has appeared in a wide range of academic and managerial journals. Phil is a frequent keynote speaker at public and in-company seminars and conferences around the world. He has an active, international portfolio of Blue-Chip clients, for whom he advises on customer experience strategy and profit enhancement.
- Klaus, Ph. (2014a), Measuring Customer Experience – How to Develop and Execute the Most Profitable Customer Experience Strategies, Palgrave-Macmillan.
- Klaus, Ph. (2014b), “Preservers, Transformers, and Vanguards: Measuring the Profitability of Customer Experience (CX) Strategies.” DMI Review, Design Management Institute Publications, Vol. 24, No. 4, pp. 24-29.
- Klaus, Ph. (2013a), “The Case of Amazon.com: Towards a conceptual framework of online customer service experience (OCSE) using Emerging Consensus technique (ECT),” Journal of Services Marketing, Vol. 27, No. 6, pp. 443-57.
- Klaus, Ph. (2013b), “New insights from practice – exploring online channel management strategies and the use of social media as a market research tool,” International Journal of Market Research, Vol. 55, No. 6, pp. 829-50.