It’s all the rage to talk about purpose in business (I’m keen on it myself) but business also has to be about the numbers. The financial results are the ultimate numbers. Targets, KPIs and incentives are management tools to drive and track progress. But, there’s more to the old adage, “what gets measured gets done” than setting KPIs. Not all customer metrics are good for customers; even the best-intentioned metrics can have unintended consequences. Here are a couple of examples.

First, let’s think about efficiency. This should be good for customers and business alike, as long as you and your customers have a common view of what is efficient. I know a contact centre for a financial services business, which had, like so many, efficiency targets for its staff. They were measured on the number of calls they could handle in the day, to encourage them to be swift and efficient. As revenues declined, the drive to reduce costs through even greater efficiency meant pressure to get through more calls in a day – but the call centre people were committed, and experienced, and rose to the challenge.

Then, a new customer service director arrived who decided this was the wrong focus. He removed all time-based measures, and instead targeted them on resolving customer inquiries first time. Call times went up, and the number of calls per agent per day declined – but over time, the number of calls fell even more, because agents were resolving issues on the first call, even if it took a little longer. Soon, the business was able to reduce its contact centre staff by not replacing leavers, reducing costs while increasing customer satisfaction. The hidden cost of the old model was that customers had to call back time and again to get the job done. It incentivised staff to get customers off the phone as quickly as they could, with little regard for customer satisfaction. Those LED screens showing the number of calls waiting and average call handling time had no indicator for call outcomes – perhaps the thing customers cared about most.

My other example is about imagination as much as metrics. A high street bank had a tried and tested direct marketing process to encourage those with short term unsecured loans to borrow again as the current loan drew to a close. A letter offering a new loan was sent out when there was one month left on the current loan, and then monthly until the customer responded (or until the budget ran out presumably). The IT systems didn’t distinguish between those with 12 month loans and those with 24 month loans, which meant that customers with a two-year loan were getting offers to borrow again while they were barely halfway through their term. The prevailing view in the bank was that while it cost a few more letters and therefore reduced return on investment, it wasn’t a problem because the renewal rates were good enough to ensure the campaign was still profitable. In vain, the junior marketer (who told me this story) pointed out that while the campaign might deliver “positive ROI” financially, there could be a cost in reduced credibility and trust, damaging the bank’s relationship with its customers – but the negative impact of repeated unsolicited and ill-fitted offers wasn’t so easy to measure. I’ll bet it was heard in more than a few focus groups though, even if customers didn’t bother to complain proactively.

In both these cases, a bit of thought about purpose would have helped. A good purpose reflects a customer need, so it naturally prompts thinking around what customers expect and value.

Alternatively, common sense can do the same job. For any given customer interaction, ensure the dominant metric relates to the customer’s primary purpose in that interaction – the what, not the how. While the trimmings, like politeness and promptness, do matter, they cannot be at the expense of the what.

A customer-centric approach engineers processes that suit customers in the first place, and removes things that are not intuitive for customers. Just like elite athletes with their focus on finding marginal gains for the team, marketers can do the same for their customers, knowing it will deliver for the business in the long run.

Thought leadership | October 2013