Linking customer experiences and employee rewards


Should a company reward its employees for providing excellent customer experiences, or should that just be seen as part of their job?  If they are rewarded additionally, should the same measure be used across all employees, or should it be targeted? Does linking employee reward and recognition to the customer experience lead to long lasting employee culture change?

Cultural change is hard

Many organisations today recognise the strategic importance of providing an excellent customer experience but, despite gathering significant volumes of data on the subject, they struggle to implement change. Often this can be put down to the need for a cultural shift to take place across the whole employee base and not just recognition of the need for a strategic realignment by senior management.

Companies do recognise that an employee cultural change programme can take a significant time to deliver, both in terms of an improved customer experience and an improved bottom line performance. However the same companies are keen to introduce a link between the customer experience and employee reward  and see rewarding customer service as a key component to employee cultural change.

This in principle is a good idea, however in our experience there are 7 fundamental questions that need to be considered.

Employee rewards – 7 fundamental questions

  1. Is there a company-wide customer feedback programme in place that supports comparison across the organisation? Without it, issues about rewarding people for customer service performance on an unlevel playing-field will arise as either their areas are not covered, not covered to the same level of detail, or are not comparable in some way.
  2. Does the customer measure in place accurately reflect what the customer wants to experience, or is it based more on what the company believes it should be providing to its customers? Many customer feedback surveys have evolved over time and are not reviewed as there is a fear of losing tracked data. If the customer experience is to be improved, you have to start with understanding what customers want. The use of tools such as Customer Journey Mapping (CJM) can prove valuable here.
  3. Do employees understand the customer feedback? Our own research shows that half of companies don’t believe they effectively communicate customer feedback to all employees. If they don’t understand it, they can’t be expected to know what to do to improve it and paying for customer service performance is a wasted exercise.
  4. Although the company may require an overall customer experience measure, such as NPS and rewarding NPS is being seen as a potential tool to drive employee culture change, are the drivers behind this score understood? Without this ability it is difficult for anyone to identify what they can do to improve either an overall score, or to achieve a target that may be set against them personally. This overall score may be appropriate to link to senior management reward as they are responsible for the total customer experience. However, linking it to more junior management levels and below will only be effective if it is targeted at the elements of the customer experience that those individuals can directly impact.
  5. Is there a structured approach in place to help employees identify the root causes of problems identified by customers? There can be a tendency for senior management to see headline results and dive in with anecdotal evidence as justification for why certain actions need to be put in place. These may or may not be effective, but the more impactful way would be to delegate responsibility for solving the problem to employees whose role is related to the issue. If they can conduct some simple root cause analysis and evaluate the effectiveness of potential solutions, the chance of both them having greater ownership, and of the solution being effective is greatly increased and pay for customer service performance will be money better spent.
  6. Is there a full reward and recognition programme in place? Linking simply a financial payment to delivering excellent customer experience is not enough. It is too low key in its approach in that only the individual employee knows whether they have achieved their target and therefore achieved their reward. A more wide ranging reward and recognition programme supports an internal communication programme that publicly congratulates both individuals and teams on what they have done for the customer. It is also worth noting that employees are motivated just as, if not more, effectively with recognition.
  7. As well as statistically robust customer surveys is there the opportunity for customers to independently feedback to the company their experiences, both positive and negative? This ensures that there is a continuous flow of feedback as well as being able to capture issues that as yet may not be covered by a more formal customer survey. Again it gives employees the opportunity to tackle focused areas, which will support their ownership of the issue, and therefore the increased probability of an improved customer experience and a long lasting employee cultural change. As well as having a structured customer complaints process, positive feedback should also be encouraged. The WOW awards are a simple mechanism to provide individual employee feedback and recognition.

Attaching reward and recognition programmes to the customer experience is a highly effective activity.  It clearly shows, to both employees and customers, the importance to the organisation of their customers.  It also constantly reminds people of the impact of an excellent customer experience for all parties. However, to be effective it needs to be targeted to ensure that all employees can clearly understand the customer feedback so that they can identify what they personally can do to improve the experience, and that it is obvious to all how the reward and recognition is linked to that behaviour.

Further reading

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If you would like to discuss linking reward and recognition to the delivery of an excellent customer experience, please get in touch.

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