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Tuesday, July 12, 2016

The Difficulties of Incenting Performance on Customer Satisfaction or NPS

Here's a new perspective on a debate that has raged for years.  The question is it productive or counterproductive to tie employee incentives into improving customer satisfaction and/or NPS scores.  On the one hand the argument has always been that incentives are a great way to get management and staff to pay serious attention to improving the customer experience.  On the other hand there is the concern that incentives lead to attention being paid to fixing the score rather than addressing real customer issues (aka fixing the store).

Been in a Hospital Recently?

The new discussion is centered on some big money ($1.5 billion) of your tax dollars that’s up for grabs out of Medicare and Medicaid Services, and the prescription drug opioid epidemic.  The plan is certainly well-intentioned.  Patient satisfaction is to be measured on an ongoing basis.  Satisfaction levels account for 30% of each hospital’s performance score, and pain management is one of eight dimensions of that total.  All that leads to a debate about two questions that are required to be asked in the customer satisfaction questionnaires by every hospital receiving federal funding:

  1. “During this hospital stay, how often did the hospital staff do everything they could to help you with your pain?”
  2. “How often was your pain well controlled?”.

Getting the Intended Results?

Some physicians contend that the government's policy and the questionnaires, while not totally causing the problem, are contributing to the problem of opioid over-use.  They contend that the money at stake and the related demand for better scores is influencing presriptive-practice.   After all, the easiest way to eliminate pain is with narcotics, and opioids (though not always necessary) are the drug class of choice.

The opioid-addicted know the game in advance and how their threats and complaints can make desired narcotics more easily available.  Afterall, most patients desire the total absence of pain. The patients' desires and the goal of increasing institutional standing places physicians in a very difficult situation.

What Approach Is Your Organization Taking?

Most companies that we know do - in one form or another - link incentives to overall satisfaction; NPS scores; or other specific questions included in their customer surveys.  The selection of these key question(s) raises many pragmatic issues.

  1. Are they truly the most important factors?
  2. Are they factors that employees can control?
  3. Are they short-term measures that could actually lead to bigger problems in the long term?
  4. How will these questions inhibit or promote ‘gaming’ by customers or staff?
8:33 pm edt          Comments

Tuesday, June 14, 2016

How Chick-fil-A Rewards Valuable Customers; A Unique Spin on a Loyalty Program

How many customer loyalty programs do you, personally, belong to?  In 2015, according to the Colloquy Loyalty Census, U.S. consumers held 3.3 billion memberships. The average American household was registered in 29 loyalty programs spread among retail, financial services, travel, restaurants, and various other economic sectors!
Companies will explain that it’s important to ‘play the game’ because they know how much more expensive it is to acquire a new customer than it is to keep an existing one.  Further they’ll quote chapter and verse documenting how customers who are points-program members account for 3, 7 or even 10 times more hotel stays or how members purchase 20% to 90% more than non-member customers.

But Have the Programs Changed Customer Behavior?

We take the position that most of these “loyalty” points-programs aren’t really accomplishing what they should or could be.  Seldom, if ever, do the organizations running them conduct objective research that would conclusively tell them whether the programs are actuallychanging customer behavior, or whether instead the spending’s a self-fulfilled prophecy.  Meaning the customers who are already buying more are the ones who find joining programs more worthwhile.
Further, we have to question whether the points-programs create a level of entitlement (often leading to a sense of unfulfilled promises and unmet expectations).  At best, we wonder whether most programs are simply binding customers to brands through a form of “golden handcuffs”.

Real Keys to Business Success

Despite the programs currently out there, we believe that what most smart marketers and managers actually want are:

  • Satisfied/delighted customers who keep coming back.
  • Raving fans who generate positive word of mouth and brag to their friends, relatives, neighbors, co-workers, and even strangers about a brand.
  • Trusting supporters who are ready and willing to try new spin-off products and services.

Chick-fil-A Thinks Differently

Chick-fil-A has achieved amazing levels of customer satisfaction and sales without a traditional loyalty points program.  Instead, in 2013, the chain created its own customer recognition program, the A-List Program.  Customers cannot sign-up for membership – it’s open by invitation only.  (Most customers don't even know it exists!)  About 60% of locations now participate in the program which begins with local management identifying individuals they have come to recognize as frequent customers (and often know by name). Those individuals are personally handed a written invitation. They then go online and complete a membership form providing their name, email address, date of birth, and other information such as their favorite sports team, etc..

Instead of Points...Unexpected Delights

Once registered, member customers begin to receive customized rewards and communications from their local Chick-fil-A restaurant.  Activities are completely under the control of the local manager and can range from A-List member group dinners in the restaurant, to tours of the kitchen, to participation in a neighborhood cleanup, or serving as an informal board of directors offering advice to the local franchisee. While corporate does offer suggestions, programs are totally controlled at the local level.  Invitations can be offered to anywhere from a handful of customers at some locations to hundreds of recognized loyal customers at another.


We don’t have access to program measurement.  What we do know is that

from a single store the program’s voluntary participation by franchisees has

grown to over half of the chain’s 2,000 restaurants in less than four years. We

have heard the enthusiasm with which corporate management discusses the

A-List Program. We see the continued growth in sales. We hear the voices of

those raving fans

And that sounds like success to us

4:45 pm edt          Comments

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Customer Experience Partners, LLC
Measurement, Management, Optimization
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