What Customers Want

Imagine we have the gift of secretly hearing our customers’ thoughts, what they feel “in the moment?” Think of the Mel Gibson character in “What Women Want,” and his hidden ability to hear what women were secretly thinking. Instead, apply that talent to your customers. What one thing would they say across all industries and businesses? I bet that they would both complain and praise a company mainly for its’ ability to consistently meet their expectations, experience after experience.

In other words, customers feel performance variations much more than performance averages. It is the ability to be precise and consistent that customers appreciate when done well, or pull their hair out when done poorly. "World-class" experiences may average out "poor" experiences on paper, but not in the customer's mind.

Let’s look at some simple examples of how customers “feel” variation –

• Scheduling a delivery or installation at your home – You are given a very broad window for when someone will show up, between four to eight hours. You block out your whole day. Some arrive very early. Some arrive very late. Some may miss the window entirely. An aggregation of that company's customer delivery times may average out “in the middle,” but the spread of what customers truly experience is far from that average. 

• Wait time – I was recently in the drive-through of a popular fast food restaurant. They had a display that told me the current average wait time was around two minutes. I’m glad they could not read my mind as I was still sitting there in my sixth minute, just wanting delivery of my basic order.  

• Supply chain – The ABC company receives a metal part from their supplier that is mission critical to the manufacturing of ABC’s core product. The part must meet precise specifications on both design tolerances and delivery timing. Any miss and the ABC company will have a combination of excess scrap, idle resources, subsequent overtime to catch up, and an upset customer on the other end. For ABC Company, averages don’t matter much as any miss is immediately felt and very costly.

• Service quality – There are two restaurants. Both have the same “7” average experience rating out of a “10” scale. However, restaurant #1 has survey responses that range from “6” to “9,” whereas restaurant #2 has responses that range from “3” to “10.” While the average score may be the same for both restaurants, #2 will produce a much worse experience for the customer. We’ve all been there and know the reason. Why risk a night out and significant expense to frequent an establishment that will occasionally produce a terrible experience? It’s like “Russian roulette” with dining. No thanks.

I heard that Steve Jobs once said the first step in learning from your mistakes is surviving them. Managing and reducing variation helps with this "survival" step. Poor experiences will become "less poor," subsequently reducing customer churn and negative sentiment. Mistakes will still be made, learnings will still be produced to get better, but customers will no longer be disappearing in the process.

WHY DOES THIS HAPPEN?

It seems logical that a wide range of performance is an experience killer, not many debates here. So, why is there still more focus and talk about managing to averages when what a customer really feels is variation? I have some theories based on my experience –

• The illusion of variation – I’ve witnessed this one time and time again for over 20 years. When seeing or hearing a measurement expressed as an “average,” people tend to assign very minimal variation to it in their minds. I’m sure there is some psychological explanation for this phenomenon, but regardless of why it's uncanny how most human beings reach this same general conclusion. When people see the actual variation around the average, they are consistently shocked and spurred to take action.

• Variation is more challenging to measure, benchmark and communicate than averages – Communicating and drawing comparisons using variations in performance are difficult to do quickly, easily and effectively. Just saying “standard deviation” can give some people hives. Also, retrieving all the data to see that spread can take more time and effort. It’s much, much easier and faster to communicate and benchmark with averages, so this path of least resistance is the one most followed.

• The further you are from the customer, the less variation you see – The more data you have under each data point, the more performance will “smooth out.” To this end, the further you are from the customer in the organizational hierarchy, the more consistent and stable the customer experience will likely appear. For example, trending a measurement by quarter (the way many execs like to see it) will look a lot more stable than trending by day. The results are no different, but the additional data under the quarterly measurement will help “hide” the actual swings in performance. The same goes for rolling up data to encompass more of the business’s performance for one key metric. For example, a “customer score” aggregated for the entire company may seem to shift very little month over month, but that same score for one physical location will bounce around a lot more. The fewer data under a data point, the more the actual variation may scare you! This by itself is not the issue. The issue is that rolled-up metrics show the least amount of variation, but are what leadership and key decision makers see and use most often. Thus, there is a false sense of stability and consistency felt by those at the top.

I want to point out that wild swings in performance are painful for more than just the customer. The financials also become more difficult to manage and predict, and significant performance variation typically means lost revenue and additional costs. Additionally, it’s emotionally draining on the people in the organization, as they begin to feel like the rodents in the “Whac-A-Mole” carnival game. Out of the blue, they get hit over the head to “fix it fast,” over and over again with each big customer and financial fire drill.

ACTIONS TO TAKE

So, what to do? How does an organization find a better balance of moving the average while also squeezing the performance spread? Here are some of my recommendations –

• Make it part of a “it’s just what we do” performance culture – Train people how to measure, analyze and communicate performance variation. Just being aware will make it better. Make it a deliverable in operational reviews. Embed it in how the business rewards and recognizes employees. Remember, this focus will not only improve the relationship with the customer, but it will also improve the relationship with your people. Why? If employees are more empathetic to the customer’s actual journey, something that managing to performance variation will help do, they will better understand the flaws with the experience from the customer's point of view. If they understand the problem better, they will take more timely and effective action to reduce the number and severity of bad experiences. If there are fewer customer fire drills and surprises, there will be fewer frantic demands from leadership to quickly “fix it!” Manage to performance averages and variation, and there is less risk of playing "Whac-A-Mole" with the people in an organization.

• Don’t forget the inputs from suppliers – I’ve seen this in every business, not just manufacturing. At a high level, every process looks pretty much the same: Suppliers – Inputs – Process Steps – Outputs – Customers. From making cars to making banana bread. When feeding bad inputs or inputs that vary wildly into a process, the success and consistency of the entire operations are now limited.

• Set clear goals and collect feedback – I know this is very basic, but it bears repeating as it's load-bearing to driving innovation and results. Don’t just measure things differently. It’s imperative to also benchmark and set goals. Establishing goals allows a business to quantify the “gap” between where you are and where you want to be, and the size of that gap determines the level of action to take. Developing goals for reducing variation may seem weird at first, but it’s a "good weird." It's stretching the capabilities of the enterprise, so it's uncomfortable. Also, as an organization makes progress on paper, it must make sure the “voice of the customer” data is validating that progress. If the needle is indeed being moved, there should be more “happy” and fewer “upset” customers that are speaking up.

These actions are not complicated to understand, but they do require significant alignment and intentionality from top to bottom to execute effectively. I often find that even outstanding leaders are reluctant to look beyond simple averages, as they have busy schedules and averages work great in executive summaries. Once they embrace the concepts and the results start pouring in, however, the broader paradigm shift will spread quickly.

SUMMARY

Customers feel performance variations much more than performance averages. For a business to provide value and a great experience, it needs to feel this variation too. Call it "customer empathy."

Remember that just having “organizational awareness” of a system’s variation will make things better. Maybe not all the way optimized, but typically when people see a wide spread in results, they respond. It creates empathy and urgency. It’s not rocket science. Rather, it’s like what someone said to me early in my career, “Make the invisible, visible. Once you do, the problem is now exposed, and most people will respond positively.” Very true.

Image from Pixabay