“What is the industry average for customer satisfaction?”
“What is the benchmark for average handling time?”
“What should be the target for our attrition rate?”
“What is the industry benchmark for first call resolution?”
“What is the accepted rate for escalation of customer complaints?”
These are some of the questions I regularly encounter during the course of customer strategy research and consulting projects. These questions are so pervasive and asked so frequently, that I’m led to believe that executives are more concerned with meeting industry benchmarks or “the number” than they are with delivering great customer experiences. Bordering on obsession, these executives are constantly measuring and comparing their companies against the competition. For them, exceeding industry benchmarks for average handle time or first call resolution, not on delighting the customer, is a great success.
The obsession with “the number” permeates into other facets of business operations. Case studies are scrutinized and best practices are discussed in the attempt to replicate competitor performance. Yet the reason for organizations’ fixation with competitive practices, industry trends and benchmark data is because it often provides the best excuse not to innovate. Benchmarking represents a form of assurance that despite whatever problems a company might be facing (e.g. low margins, increasing attrition and declining market share) – everything is fine. Illustrating that performance is in line with competitors at board and shareholder meetings, or to employees at the annual “company away day” enables executives to escape the responsibility to innovate, and to excite and delight customers.
The fear of change and innovation is also what drives individuals to seek refuge and protection behind “the number.” It is often much easier to keep the status quo as people generally find comfort with the known and fear the unknown. However, since innovation and change are increasingly being viewed as necessities, executives are unable to oppose these powerful forces – hence the need to find refuge behind “the number.” The thinking goes that as long as averages are met, benchmarks are attained and graphs paint a nice picture – there will not be a real need for change.
During a recent consulting engagement in which we identified particularly large gaps between customer expectations and employee performance, the executives chose to argue the validity of the results rather than find solutions to address them. They questioned the type of respondents (which they provided), the sample size (which they agreed to) and the actual questions (which they approved). They then proceeded to waive the industry benchmark and declared that in a number of instances they were actually performing above the industry average. Ignoring their poor brand equity, miniscule market share, low purchase consideration and high customer attrition, they touted their “exceptional” performance relative to the rest of the market. Here (as in many companies) “the number” mattered more than their customers. I asked them if they would have contested the results had they painted a brighter picture and shown high customer satisfaction. I am still waiting for an answer.
While many companies ask for benchmark data, is it really all that important? Should this be the ultimate goal? Few companies, if asked, would admit to striving for competitive parity, yet when these organizations endeavor to reach industry benchmarks, reality dictates that the experiences they provide will rarely excite and delight customers. In highly competitive environments, organizations cannot afford to be perceived as a commodity. The ability to charge premium prices, drive purchase consideration, increase wallet share and ensure permanence of relationship longevity is predicated on wowing customers through different and innovative experiences. Being at par with industry standards will place your organization on the fast track to discounts and price wars. Benchmarking is about catching up with the competition, not leading it.
Using the benchmark, best practices and case studies to learn from other’s experiences, successes and failures to avoid mistakes is never a bad thing. The benchmark should be utilized so long as it is a means to an end and not an end unto itself. However, when learning from others’ experiences, recognize that those ideas and practices are being utilized by the very competitors which you seek to lead. While serving as a component in improving your customer experiences, best practices and case studies should not serve as the primary source of your customer strategy initiatives. While imitating others may be the highest form of compliment, your goal should be to set the bar so that others will try to imitate you.
To avoid sealing your fate as a product or service commodity, overcome your fear of change and embrace customer demands for innovation. Follow industry trends and competitive practices without using the benchmark as a badge of honor. Failure to innovate and change will drive customers into the arms of competitors. The necessity to change is upon us and you have to make a decision. Are you ready?