This is one of the key findings of a new report Sharing the pleasure, sharing the pain. Its conclusions are based on the results of a Touchpaper sponsored survey carried out by The European Centre for Customer Strategies.
The survey found that just over a fifth of the 858 respondents link directors’ remuneration to customer satisfaction, compared with 48% who do not. ‘Linked companies’ (those that tie directors’ pay to customer satisfaction) are sharper in every aspect of their customer management practices. They are more likely to have a comprehensive, organisation-wide approach that links customer satisfaction to all their operations.
Both linked and unlinked companies predictably see marketing, sales and customer service as being in the front line.
But in the unlinked companies, this is often where the buck stops.
Linked companies are more likely to make everybody in the company an ambassador for customer satisfaction, including finance where they lead unlinked companies by a 14% margin.
This wide distribution of responsibility is often underwritten by remuneration policies. In half of the linked companies, everybody’s pay, incentives or bonuses are connected, at least in part, to customer satisfaction.
That compares with a mere 8% in the unlinked companies. The linked companies also have a 14% lead in tying customer satisfaction to both after-sales service and product development.
When it comes to connecting customer satisfaction to the bottom line, linked companies are way out in front. They are 18% (45% to 27%) ahead of the unlinked in connecting customer satisfaction to product profitability and 22% in front in tying satisfaction to customer profitability. Linked companies are also twice as likely to build customer satisfaction into balanced scorecards or EFQM (performance management framework) excellence models at the strategic management level.
- Lee Chadwick, director of Touchpaper, a support solutions company.
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