Simon Wood 

There are a few things that make my blood run cold – and it appears to be the time of year when I come into contact with some of them on a regular basis!  Yes, it’s the time of year for supermarket TV ads – and retailers trying to persuade me that they are the best place to shop by using loud adverts with bouncy background music.  Now I like a chocolate orange as much as the next person (if not slightly more) – but I refuse to look at the Christmas aisles in my local supermarket until it at least December, and I never want to watch the Christmas ads!

However, that’s still not the scariest thing I encounter at this time of year!  The scariest are those little emails that ask for help with ‘targets’.  It’s a perfectly natural question for any client running a customer satisfaction programme – they know where they are, they know they want to improve and they will invest to do so – but what level of improvement will be worthy of the ‘success’ label?  (This is also a highly appropriate time to ask these questions – progress is being measured for the year, the budget is being allocated for the next, and for some it’s the start and end of the financial year – but that doesn’t make it any easier as a topic).

To be honest, the whole concept of targets leaves me in a complete quandary.  On one level I’m immensely proud of any of our clients who take their customer satisfaction measurement seriously enough to set company targets.  But at the same time, setting targets is something I absolutely dread.  I’d rather walk across hot coals to a soundtrack of Christmas ad mashups than to have to set the targets!

Why is it so difficult?  Surely if it’s such a natural thing to do, I should be welcoming the opportunity to do this?  Well, let’s go back to the start – why companies set targets and how they use the results.

Why Do Companies Set Targets?
At the end of the day, measuring customer experiences is pretty easy – you send out some questionnaires, get them back, count the answers and get a score.  But making a difference with your results is not easy.  Far from it.

To make a real difference you need to change the culture of a company – make people put the customer first.  ‘Customer centricity’ is included somewhere in most company mission statements these days, but to be truly successful you need to live and breathe it, not just say it.

Targets are an obvious tool for companies trying to do this. By linking employee rewards and benefits to the customer satisfaction scores, they should be able to make everyone care about the survey results – and therefore the quality of service provided.

That’s the theory – but of course there are caveats.  As soon as the targets are likely to have any impact on an employee, there’s an incentive to game the system – with a huge number of ways of doing this, such as choosing which customers to send surveys to to get positive results.  I won’t go into these approaches here – but there’s plenty of information on these in the research press, with good explanations within Reicheld’s ‘The Ultimate Question’.

But regardless of the caveats, many of our clients will want to use targets.  The potential benefit will often outweigh the limitations, and many will only become apparent once the surveying starts.  And even with the caveats, I applaud (not literally) companies that take this step – customer experience surveys must be used and even if the targets make only a slight difference in reality, they’re better than letting the report gather dust on a shelf.

 The Types of Target
Let’s be honest – there are ‘targets’, and then there are ‘TARGETS’.  Whilst they may all be the same in a sense, they can vary hugely – usually because of the way they are used.  In my experience I’ve come across 3-4 different types of targets, each falling into the general categories below:

  • Guidance targets – These are the softest member of the target family.  Set by the senior management team or the research team, they set an overall goal for where the company wants to be.    Achievement (or failure) is duly noted but the repercussions are minimal – except for embarrassment of senior people (a bad thing) if missed, or back-slapping if achieved.
  • Company bonus targets – This type of target is very similar to the guidance targets – but comes with teeth – namely the payment of bonuses to employees based on their achievement.  If the target is met, everyone (except perhaps the Financial Director) is happy – but if it’s missed, you have an army of employees grumpy as they will have to miss out on that new TV or holiday.
  • Departmental/team targets – Some of the clients I‘ve worked with over the years have gone beyond company targets and given individual teams and divisions targets for the aspects of the customer experience that they are responsible for.  The most sophisticated even calculate these so that if all departments/divisions meet their targets then so does the company.  These are often linked to bonuses – either at the division or company level – if targets are met.
  • Target rules – The final set of targets we see aren’t really targets, but rules based on the customer experience ratings.  Some clients set rules – such as no manager can be promoted unless their division/team/department achieves improvement in customer rating scores over a set period of time.  Enterprise Rent-A-Car is a classic example of this – using such a rule in the 1990s as part of its customer service quality programme.

Setting The Targets
Now here is the bit that has me breaking out in a cold sweat – actually setting the targets!

Why do I find this nerve-wracking?  Well it’s the implication of getting it wrong that worries me – and in some cases, you simply can’t get it right and please everybody.   You can call me timid if you like, but personally I don’t want to find myself on BBC News because my survey caused a strike!

However, advising on this is part and parcel of the day job – here are a few hints, tips and guidelines that I use when helping clients in this area (and to try and keep myself off the airwaves):

Know what types of targets you’re looking to set
This might be target setting 101 – but don’t underestimate how wrong you can get this!  If all the client wants is guidance targets, then the level of detail you may need to go into in creating these will be very different to that required for departmental/team targets that all work together to result in overall company improvement.

Know your improvement – is it absolute or directional
Some clients use absolute improvements as the basis for their target, whereas others just want a directional improvement.  Absolute improvement is a much tougher measure so may require more work from client employees.  But, it’s easier to miss it by a tiny amount – leading to argument over whether the target was fair (and even if it was missed, if it was missed by 0.1).

Understand the consequences of a met/missed target
Employees will get upset if the survey misses its target and they don’t get a bonus.  Similarly the consequence of saying the target has been achieved can be millions of pounds in bonus payouts – which won’t make you popular if you get it wrong!

Ensure there are no changes in the survey criteria and sample base
Make sure progress towards the target is measured on the same criteria and respondent base pre and post – otherwise we can get very different answers due to sampling etc. that will cause you endless issues.

Avoid questionnaire change that will affect responses and target performance
Beware innocent changes to the questionnaire that may affect the score on the targeted measure (e.g. I once saw a survey which determined the bonus of all employees go into meltdown because a ‘N/A’ box was (sensibly) added to an attribute on the questionnaire, leading to different scores and the whole bonus model no longer working!)

Make sure your survey is robust
I’ve left this until last, but it is probably one of the most important things to remember.  You need to make sure that you have nailed down everything possible and are beyond reproach so you can say that a missed target is a genuine failure not a statistical fluke. The more robust your sample and survey the more precise you can be on your targets and the more confident you can be that the client has indeed met or missed their target – and the fewer debates you will get into further down the line.  Setting a target with massive monetary implications on a sample of 50 people really isn’t wise!

Hopefully this month’s blog will be useful for anyone who has to face the target test over the next few weeks and avoid them ruining your Christmas.  And apologies to any of you who’ve been awaiting my latest effort for some time – it seems I’ve missed my own target of a blog a month rather badly! 

Simon Wood is Head of Stakeholder Management Research at TNS UK.

The views expressed in this blog posting are the author’s own, and do not necessarily reflect the views of TNS, nor of its associated companies.

 

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