Will 2024 be the year that HR meets CX (customer experience)? Professor Steven van Belleghem delves into the crucial role of company culture, leadership credibility and employee empowerment in fostering a truly customer-centric environment and suggests three qualitative questions to help reveal just how customer-centric your leader and company culture really is
I spend a lot of my time travelling around the world talking to companies about their customer experience strategy. Often it is the marketing teams who are most interested in what I have to say, but increasingly I argue that it is company culture – and the credibility of the leadership that drives it – that is crucial for CX, and therefore it should actually be HR teams that could be key to a truly outstanding customer experience in 2024.
An outstanding customer experience starts with hiring passionate, enthusiastic, empathetic people and training them to stimulate that people-oriented CX ‘muscle with customer-centric onboarding programs. But HR teams are also responsible for helping their leaders realise that the customer-focused culture starts with them and that they need to set the example. They should help support the empowerment of employees to always act in the interest of the customer and have a strong focus on employee wellbeing, because I’m a true believer in the fact that happy employees result in happy customers.
Just how customer-centric is your company culture?
Almost every company you come across will say customers are important to them, but there are often small things that undermine their efforts – and it sometimes comes down to little decisions of leaders that make or break credibility of the customer-centric promises. This is why I developed three qualitative questions to help reveal just how customer-centric a leader, and their culture, really is:
Question 1: What do you do if there is a conflict of interest between your company and the customer?
Every telecom company I have worked with has dormant accounts. Each has a ‘we want to be very customer-centric’ slide in its corporate presentation, yet every one of them just lets those accounts sleep, so customers keep paying for a service they’re not actively using. Why should they hurt their short-term revenue and help customers spend less?
But there are companies that do dare to make these decisions. Popular US burger chain, In-N-Out Burger, is such an example. They sell burgers, fries and milkshakes like any burger restaurant does, but every year they rank first in the industry for customer satisfaction – and profitability per restaurant is double that of McDonalds.
So, what is behind this? Ever since the company was founded they have always been committed to top-quality products and a fun, pleasant atmosphere, and chose not to start a franchise model to keep control of everything. When they realised there was an issue with the quality of the buns in one of their restaurants, they decided to close all their 37 restaurants in Texas for two days to show customers they always served the highest quality food with no compromise. Closing those restaurants was not only to make customers happy, but also show your employees realise where your priority lies. With the customer!
Are you willing to hurt yourself in the short term in return for earning the trust of your customers in the long term?
Question 2: What do you do first? Solve the problem or start an investigation?
Mistakes happen. The important point is how we deal with them. It is now accepted that customer satisfaction can be higher after a mistake if it is solved properly, than if a mistake never occurred. Yet this turns out to be even more complicated in practice than in theory.
There are two options in the case of a mistake. Solve the problem immediately or first investigate exactly what happened and who is responsible for the error. It is my experience that, increasingly, companies choose the second option. It appears the thinking is, ‘First let’s find out what went wrong and second find out whether it was us or the customer that caused this error.’ The truth is, most companies eventually decided to solve the problem to maintain the customer relationship, but the delay and questioning results in such frustration that no one is truly happy about how things turned out.
My advice is to use a hybrid of the two options. Fix the errors immediately if possible and only then analyse what went wrong and speak with the customer. Of course there might be 5% of customers that might exploit your good nature, but don’t fall into the trap of thinking this is your average customer, because the moment you recognise that 95% of people are normal and decent you will start offering truly customer-centric services.
Question 3: How much responsibility do your employees have to make decisions?
If you really want to get customers excited, you must have help from the people closest to them, and HR can play a big part in creating the right culture.
Employees from the customer service team, salespeople and so forth see and hear customers every day. These employees are important touchpoints in your customer experience. Do these people have the freedom and authority to make their own decisions when discussing and solving incidents with customers? One thing a customer does not want to hear is: ‘I’m not allowed to make that decision, I have to ask the manager.’ What customers want is very simple: to be helped immediately or to get an answer to their question immediately. To succeed in this it is important to delegate as much responsibility as possible to the employees.
One of the best examples of this is a policy at the Ritz-Carlton hotel group where they have a famous ‘$2,000 Rule’. Each employee has the authority to compensate and surprise customers up to an amount of USD 2,000. If a customer checked into a nice room in one of their hotels but was unhappy to find dirty towels on the floor the person that answers the call to reception not only has the responsibility to fix the problem, but also the power to make sure the customer is happy with the result. so could invite the guests to enjoy a free glass of champagne in the bar while the room is cleaned, without the need to consult a manager.
The $2000 Rule also goes beyond providing compensation when a problem arises. Management also encourages employees to look for opportunities to surprise people positively even if something has not gone wrong.
Many business leaders do not dare to adopt such policies, fearing that employees cannot handle the responsibility. This is where the 95%/5% rule applies to employees. Five percent of your employees are bound to misuse the rule, but the vast majority want to do well and are perfectly capable of using their common sense. If you do not trust your own employees, you may have a problem with your hiring strategy.
Is your culture a polished diamond or a diamond in the rough?
The above three questions are a kind of mirror for yourself to see how customer-focused you really are. A self-assessment, using your responses to these questions, can explain why you succeed or fail in building a strong customer culture. The answer to these three questions provides insight into whether your team will or will not believe that you are, or wish to become, customer focused.