The following post originally appeared on the Harvard Business Review Blog Network.
You know, people keep telling me we need to empower our employees, but we can't just let our employees do whatever they want to satisfy customers. We'd lose our shirts. We have a business to run, and we have to make money.
In our customer strategy work at Bain & Company, executives frequently express similar fears, often in far more colorful language. They worry that that their service employees will forgive fees, fail to enforce policies, and spend too much time with their customers.
In fact, they're often right.
If all you do is "empower the front line" — grant your employees more freedom to wow customers — they will almost certainly strike the wrong balance between customer delight and shareholder returns. We know of one retail bank that gave their call center representatives the edict to "delight" customers and permission to waive up to $150 in fees for any customer without seeking any additional authorization. The result? Customer satisfaction rose a little, but fee revenue declined. A lot.
Why does this pattern seem so common? On the one hand, we all know that our frontline employees need more latitude to earn their customers' trust. We know we need to remove the red tape that prevents them from doing what's "right" for customers. But employees often lack the experience, judgment, and discipline necessary to achieve this without breaking the bank.
In our experience, the key to success in empowering frontline employees lies in giving them a framework within which to operate — and feedback about how they are performing within that framework. Help them become self-directing and self-correcting as they work toward a clear, understandable outcome.
Take TD Bank, for example. TD Bank is a loyalty leader among major retail banks in North America. It has experienced a long stretch of retail deposit growth, which has funded many years of expansion and new branch openings. The bank has a framework within which every employee understands the business objectives of earning customer loyalty, and where every business practice is designed to encourage both systematic and spontaneous attempts to wow customers.
It all starts with a culture in which every employee knows the business outcomes TD Bank is trying to achieve, with clear rules about how to do that and frequent feedback on how they are contributing to the bank's success. One example is TD Bank's "1 to say Yes, 2 to say No" rule. Every customer-facing employee is taught that their job is to satisfy customer requests if at all possible. As long as they stay within the bank's policies, finding a way to say yes is something they are expected to do independently.
If, however, a policy does prevent them from satisfying the customer's request, they can't simply tell the customer no. Instead, they must seek advice and support from a supervisor. Why? Because TD Bank's leadership knows that it is often easier for an employee to rely on the letter of a policy and move on to the next customer than to take time to seek a creative solution — it's easier to say no than to say yes. Requiring employees to seek additional advice in these situations makes it harder to say no and levels the playing field.
Jim Bush, who leads American Express service operations globally, set up a similar system. He removed call center scripts, traditional behavior-based quality monitoring metrics, and limits on average handling time. Instead of focusing on traditional productivity measures largely aimed at controlling call center costs, he made it a key success measure to earn the enthusiastic recommendations of card members. The American Express team's framework substitutes guidelines for hard limits, judgment for scripts, and coaching for monitoring.
Why does this work? Because employees are deeply involved in figuring out how to meet fundamental business objectives. Bush and his team don't dictate how employees achieve those outcomes, but do make sure they receive plenty of feedback on how well they are doing. Service expenses actually went down under the new system as employees devised and shared solutions to common customer issues. Better yet, among customers who are promoters, American Express sees a 10-15% increase in spending and far better retention rates.
Operating in a highly regulated industry and in a business where it's possible to be defrauded by unscrupulous customers, American Express still has rules and policies, of course. But it can also give far greater latitude to customer care professionals who have a sophisticated understanding of how they help the company achieve its business objectives.
Don't just set your employees free to do "whatever it takes" to delight customers. If you want to earn the loyalty of your customers without losing your shirt, do the hard work of setting in place a framework within which your employees can succeed.
- Give them a clear measure of success: creating a profitable customer promoter.
- Give them clear guidelines within which they can operate independently.
- Give them fast, frequent, and simple feedback to help them learn.
Assuring that your employees have the freedom within a framework to become self-correcting and self-directing will earn your customers' loyalty and help your company grow profitably and sustainably. The result: dramatically lower employee attrition, lower costs, and higher customer loyalty. In short, strategic and financial success.
Rob Markey is co-author, with Fred Reichheld, of the book:The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World, published by HBR Press. He is a partner in Bain & Company’s New York office and head of the firm’s global Customer Strategy and Marketing practice.