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Providing Leaders with the Missing Link: Making Customer Information that is Linked to the Bottom Line Part of Leaders’ 360-Degree Feedback. Jim Miller Shon Magnan Jennifer Mattocks For more information please contact Jim Miller at: 651-688-1912 or jmiller@questarweb.com
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Providing Leaders with the Missing Link:Making Customer Information that is Linked to the Bottom Line Part of Leaders’ 360-Degree Feedback Jim Miller Shon Magnan Jennifer Mattocks For more information please contact Jim Miller at: 651-688-1912 or jmiller@questarweb.com Presented in “Making 360 Matter: Program Attributes and Links to Organizational Outcomes” at the Eighteenth Annual Meeting of the Society for Industrial and Organizational Psychology, Orlando, FL April 11, 2003
Customers? Background • Strategic benefit of 360° feedback is receiving input from each of a leader’s constituents … Supervisor Subordinates Leader Peers
Background • Why isn’t customer feedback included in leadership development? • Not all leaders interact with external customers • Reliability of customer ratings is suspect • Often no direct link between particular managers and customers. • Instead of attempting to include customer feedback in a typical leadership assessment model, some retail organizations are using linking models to target leader development as one way to improve consistency and excellence in concept delivery.
Background Linking • Models of organizational functioning and outcomes (e.g., Heskett, et al., 1994; Wiley, 1996; Rucci, et al., 1998)
Research Questions • Will the climate for service created by a leader impact the consistency and excellence of concept delivery? • Does it make a difference if customer feedback is utilized for administrative vs. development purposes?
Method: Sample • Program #1: Survey responses obtained during a customer service tracking survey for a nation-wide 4000-unit retail chain. • Customers were invited to complete an IVR survey. • Data collected from March 2001 through December 2001. • Total sample size 500,000 respondents. • Survey used for administrative purposes - store managers evaluated and compensated for their customer results.
Method: Sample • Program #2: Survey responses obtained during a customer service tracking survey for a nation-wide 150 unit restaurant chain. • Customers were invited to complete an IVR or Internet survey. • Data collected from January 2002 through December 2002. • Total sample size over 90,000 respondents. • Survey used for developmental purposes - store managers are not compensated for their customer results.
Method: Measures • Program #1: Service Compliance • e.g. Associates Professional?, Wait Time Under 15 Minutes, Cleanliness of Store • Program #2: Customer Satisfaction • Taste of Meal, Atmosphere of Restaurant, Knowledge of Associate, Overall Satisfaction • 5-point Likert satisfaction scales.
Results: Linking Feedback to Sales Performance • Found significant correlations between customer feedback scores and sales growth Retail Chain (administrative) Sales Growth Overall Customer Score .23 Restaurant Chain (developmental) Sales Growth Overall Customer Score .31
Results: Customer Feedback and Sales Growth Sales Growth - YTD Restaurant Chain Customer Satisfaction Scores
Customer Satisfaction Survey Restaurant #620 Restaurant Level Report May 1, 2001 [Percent Very Satisfied] 50 Customers Responding Customer Loyalty Index: This Period Last Period Market Company Top 10% Overall Satisfaction 54% 54% 54% 54% 54% 77% Value for the Money 73% 73% 73% 73% 73% Likely to Revisit 77% 77% 77% 77% 77% Likely to Recommend 73% 73% 73% 73% 73% Big 3 Areas to Work on: 1. Cleanliness of Dining Room 2. Speed Food Delivered 3. Freshness of Ingredients "Critical" : 62% Taste of Meal 54% 54% 54% 54% (G) 78% Server Menu Knowledge 78% 78% 78% 78% (G) "Important" : 54% Freshness of Ingredients 54% 54% 54% 54% (Y) 35% Cleanliness of Dining Room 78% 78% 78% 78% (R) 54% Friendliness of Server 54% 54% 54% 54% (Y) 20% Speed Food Delivered 54% 54% 54% 54% (R) 78% Server Timeliness 78% 78% 78% 78% (G) "Monitor" 54% Cleanliness of Restrooms 54% 54% 54% 54% (Y) 54% Comfort of Restaurant 54% 54% 54% 54% (Y) 54% Temperature of Food 54% 54% 54% 54% (Y) 78% Lobby Greeting 78% 78% 78% 78% (G) (G) Green - Areas of Good News! (Y) Yellow - OK, but could be better (R) Red - Areas for Improvement Trend for Customer Loyalty Index 100% 75% CLI 50% 25% May-01 Jun-01 Jul-01 Aug-01 Results • Feedback was developed for store managers that correlated sales growth to specific customer feedback items. • Allows leaders to focus on the aspects that most affect their bottom line.
Results • For feedback to be valuable, store managers need to receive timely feedback. • Unlike traditional 360° feedback, data are collected continuously. • Managers do not have to wait a year to see if the improvement efforts they are making are impacting their customers. • Feedback can be used as a early warning system - don’t need to wait until sales lag to correct a problem.
High Performance Low Results • Results used to determine not only where managers need to improve - but how to improve. Inconsistent Service Percent Very Satisfied Overall Low Service
Conclusions • Customer feedback can be an important component of a leader’s development plan. • Strategies, such as linking, need to be created that provide timely customer feedback. • Customer feedback developed with either an administrative or developmental purpose can provide valuable data.
Further Research • How do we integrate customer feedback into a traditional 360° program? • How does an organization where customers cannot be linked to individual leaders take advantage of this type of feedback?