Avoiding the Pitfalls of Customer Participation

Companies pay a lot of attention to customer participation — getting customers to play an ongoing role in the business by providing suggestions and ideas on its products and services. Whether this feedback takes place through surveys, comment cards, online forms, or other means, studies have pointed to the advantages of encouraging such dialogue.1 It can create a bond that enhances customer loyalty and even a willingness to pay higher prices.2

However, it also has downsides that many senior executives are not aware of. Indeed, our research, which included interviews and roundtable discussions with 87 executives and 276 employees in a range of service industries, found that enthusiasm for customer participation wanes the closer one gets to the company’s front lines.3 When customers are encouraged to speak up, front-line employees can feel threatened. Even though they are committed to advancing the objectives of the business, front-line employees sometimes see themselves as caught in the middle, torn between representing the views of customers, regardless of how reasonable those views may be, and what they think is reasonable.

For example, customers sometimes expect front-line employees to convey information to management that goes against their interests. This might include complaints about them or their colleagues or suggestions that could add to their workload. When the requests have bearing on the workers’ careers and job security, resentment can ensue. Companies that place too much emphasis on customer participation may be setting up a dynamic in which front-line employees are expected to tolerate poor customer behavior, such as verbal abuse, for their own survival. This can have negative emotional and behavioral consequences, leading to feelings of betrayal and frustration by employees who feel the company values customer-generated information more than their well-being. The perceived imbalance can have insidious effects on internal morale.

For organizations, the stakes are high: While customer participation can be beneficial, if managers don’t get it right, front-line employees could decide to passively undermine it — or even actively sabotage it. To protect themselves against these potential negatives of customer participation, businesses must keep employees engaged and confident that management has their back. In light of our findings, we suggest five guidelines for managers.

1. Don’t overemphasize customer feedback in performance evaluations. Paradoxically, when managers evaluate front-line employees on the basis of customer feedback, they can undercut their objective of supporting customer satisfaction. Workers sometimes respond by focusing their efforts on minimizing complaints and qualifying for financial rewards rather than creating customer value. In fact, consistent with prior research, we found that rewarding employees for tasks they would otherwise do can weaken their motivation to serve customers.4

What’s more, giving customers too much influence over what front-line employees receive in pay and their opportunities for career advancement risks alienating workers, since customer feedback can be highly subjective, emotionally charged, and potentially biased.5 Customers sometimes rate employees on factors outside the employee’s control (for example, a slow computer system, long wait times, or even the weather). When managers use extraneous information like this to evaluate employee performance, it can feed perceptions of unfairness and encourage employees to game the system.

2. Foster a culture of respect for front-line employees. Many organizations put front-line employees in a position in which they feel they need to dress up their performance for their supervisors by begging customers for high scores on surveys. At the end of a service call, one employee at a global consumer electronics company confided to one of us, “We’re a week away from our annual evaluations, and I sure would appreciate you saying nice things about me.” Such requests can unnerve customers and even undermine the work the company does to present a positive brand message. In addition, when employees think they have to beg customers for high ratings to thrive, they do not feel like respected members of the organization, they are less motivated to make genuine efforts to create customer value, and they start questioning their role within the company. One informant, for example, told us she felt undignified and often asked herself, “Is this the job I so desperately wanted to do?”

Organizations need to find ways to create and reinforce a positive business culture so that front-line employees aren’t on the defensive and compelled to engage in opportunistic, manipulative behavior. Few companies have been more effective at this than Southwest Airlines. Over more than four decades, it has worked at building a culture where employees — not customers — come first. In its annual reports and corporate communications, Southwest management talks about value creation for “employees, customers, and shareholders,” in that order.6 Knowing that the company values the contributions of its employees, many have shown a willingness to go the extra mile to satisfy passengers.

3. Make employee well-being a real priority. In addition to respecting front-line employees, organizations need to understand that these workers’ well-being is essential to success and make sure that message is clearly communicated internally.

One way to do this is to have dedicated staffers for dealing with employee well-being issues, just as businesses do for handling customer satisfaction issues. An employee service counter that operates independently from the performance management team can support workers who have experienced unpleasant customer interactions and help them recover from incidents like verbal assault, targeted or stalking harassment, and the like. For example, 3M organizes retreats at which employees are encouraged to talk about difficult customers. Sharing such experiences with colleagues can help employees reestablish a sense of equilibrium and feel better about the value they are providing.

4. Confirm that the customer is not always king. Managers need to identify unacceptable customer requests and give front-line employees protection against such requests. In our research, we found that many front-line employees worry about speaking out for fear of retribution. They feel constrained and frequently let their frustration simmer. Across a wide variety of employment categories in our sample, including airline cabin crews and financial and legal service providers, employees working on the customer relations side of the business struggle to maintain a sense of pride in their work. Positive feelings quickly unravel when these workers can’t do what they feel is right and are expected to bite their tongue with ill-mannered customers.

Companies can take steps to show workers that they don’t need to take abuse from irate customers. In Korea, Hyundai Card, a credit card company, drastically reduced turnover and absenteeism of front-line employees and increased productivity by eliminating policies that forbade employees from hanging up on customers.7 Under the new guidelines, an employee can terminate a call when the customer is unreasonable or abusive. The new policy humanized and validated the needs of front-line employees, without diminishing the importance of customers. Recently, the call centers of several Korean companies have started playing sound bites taken from a social media campaign launched by energy firm GS Caltex, which featured abusive customers followed by the voice-over, “You are about to be served by my beloved mum/father, daughter/son. … Please talk to her/him nicely.”8

5. Treat external and internal participation as equally important. Despite the challenges and complexities of using customer input, we think deciding not to use any would be the wrong solution. In particular, positive customer feedback can enrich managers’ insight into how employees are performing. In our study, for example, we encountered service providers such as lawyers who were extremely well liked by their clients. However, they felt unappreciated and alienated from the business when it seemed managers focused mainly on the billable hours that were racked up at the end of the month. If these managers had also considered what clients had to say, they could have gained a more nuanced understanding of who their biggest rainmakers were and motivated those employees to build on their strong customer relationships.

This argues for a balanced approach that blends customers’ outside view with employees’ internal perspective. WestJet, a discount Canadian airline, provides a good example. When the company was considering starting a new regional airline, then-CEO Gregg Saretsky thought it would be valuable to solicit input from both customers and employees. In addition to conducting market research and holding meetings with community leaders in cities across Canada, WestJet leadership held town-hall-style meetings where employees were invited to express their views. Ultimately, more than 90% of employees backed the new venture. Saretsky attributed the employee support at least partly to their sense of feeling valued. The key to getting things right, Saretsky told us, is ensuring “that employees have enough information, a formal vehicle to provide input, and a feedback loop that apprises them of the actions that resulted from their — and their customers’ — input.”9

Managing front-line employees in ways that help companies establish profitable customer relationships can be challenging. Although organizations want workers to support company goals and put the interests of the business ahead of their own, managers’ efforts can easily backfire if they disregard employees’ needs. The guidelines we have put forward can help companies strike a productive balance.



* This article was originally published here

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