People need appreciation. We all do, it is part of our nature. When we are young, we are often taught that appreciation comes in exchange for meeting certain KPIs: being obedient children, getting good grades at school… However, as we mature we find out that it does not really work. Attending a prestigious college or having a bright career does not necessarily get us appreciated by others. Appreciation (and, ultimately, happiness) is not just about achievements, but rather about managing our relationships and expectations. This is an important lesson that we sometimes learn the hard way… Managing a tech company for years, I came to the conclusion that this is true for businesses as well. Happy and appreciating customers are crucial for keeping your company alive. But being good at formal KPIs is not enough or sometimes even irrelevant. So it is important to stop being childish and have a fresh look at customer satisfaction as a grownup. Let me tell you how I did it.
Sometimes bad guys are loved most
For some years I have been engaged with a tech company specialising in automotive solutions. In days of old, cars were 100% mechanical products made of steel, aluminium, rubber and plastics. Modern cars are different: about 50% of their value comes from the tech industry that provides crucial software and hardware components. We have always put a lot of effort into measuring and improving our customer satisfaction. Our initial goal was to design a formal procedure to collect, process and analyse data that could give us deep insights on what was right and what was wrong in our work. We tried personal interviews, forms, voting, open and anonymous polls. You name it, we tried it. The data we obtained during these sessions was poured into a complicated system of KPI-based parameters that we wanted to control. Say, accuracy of product delivery time, matching product requirements, our reaction time to customer inquiries and so on.
Over several years we accumulated huge chunks of data. Analysing it brought us to an idea that may look stunning. We dropped all our previous practices. From that time on, we just asked our clients to rate their satisfaction on a 1 to 10 scale. Just that simple, but yet very effective. Why? Our data revealed that all our sophisticated KPIs had little to no correlation with overall customer satisfaction. On the contrary, sometimes our customers were happy even though we failed to meet any of our KPIs.
Let me illustrate this with a live example. One of our clients was designing a car based on our software and hardware solution. For reasons beyond the scope of this article we could only treat him as a second-tier client. The resources we could dedicate to his project were limited to those we could spare from our top priority work. We honestly described this situation to our client and he was OK with it. The project went on slowly and with enormous difficulty. We missed every deadline. If I were to highlight each of the project changes with a red marker, the whole plan would look like a fire truck. We managed to meet only one critical point: prototype demonstration. By that time our software was not ready, but we found a solution for the car interface to look perfect. The demonstration was a success and the project went on.
Still, the customer was happy, despite the project’s timeframe being doubled. All feedback from him and his team members was always 10 out of 10. Our transparency was the key. We always notified the client of any change or problem with a full explanation. And also the most critical point was met, although not in an ideal way.
It’s a win-win game
After a period of trial and error, collecting and interpreting data, we got settled with our customer satisfaction approach. As I mentioned, we just asked them to rate their satisfaction at a 1 to 10 scale. If the grade we got was above 7, we assumed that everything was going well and did not require any intervention. If the grade was below 7, we started digging into the reasons why the customer was unhappy. Finding it, we worked out ways to mitigate the problem, broke it into tasks, completed them and reported the results to the client. This approach enabled us to react quickly and efficiently, bringing our customer relationships to norm and avoiding similar problems in the future.
The three major pillars for this approach to work are proactivity, honesty and building adequate expectations from the very start. For instance, a client asked us to develop a fully functional parktronic system, both hardware and software, within 12 months. After studying the subject, we replied that such systems typically require long calibration cycles. So, if 12 months are an imperative, the system would only be a gamma-phase (a pre-release version rather than a public-ready product) and would only be suitable for small-batch certification. At that stage, the client needed the system for a trial batch of 50 cars, so he agreed to these terms, adjusting his expectations.
Employing this approach helps correct things on both sides: not just what the customer expects, but also how your company works. Often, a client dissatisfaction points to a system error in your company processes, like collecting requirements, software validation etc. We had a case, when the software we delivered was working poorly on our hardware installed in the client’s car. In modern cars it is just as bad as, say, a cooling system not matching the engine. Our customer pointed out that he was dissatisfied. We started studying the problem and found that there was a flaw in our internal practices. We improved the way we synchronised requirements for software and hardware so that they match the client vehicles. These changes were applied throughout the company, not just the team that worked on that particular project. And, of course, we redesigned the troubled product. The result was beneficial for everyone. Our customer got a working product and we got an improvement in our own processes making sure such a problem would never happen again.
Walking through the toxic lands
Like any human connection, relationships with a customer can develop a certain degree of misunderstanding and even toxicity. For instance, communications with a client usually imply talking to the top management. Wrong! Big bosses rarely go deep into detail. They can give you 10 out of 10 for months and then all of a sudden they terminate the project because they got some poor feedback on your work from their subordinates. Sometimes a client’s team is reluctant to change their platform (no matter how small that change is). Sometimes there is a flaw in your work that they see, but if you communicate just with their boss, you will know about it too late. Internal communications are usually more trustful and intimate than those with outsiders. In most cases your client will rather rely on his people’s opinion rather than yours. So it is crucial to expand the entire concept of customer satisfaction to the entire team that uses your product. Communicate with client’s people that do not make decisions directly, and you will be updated on the potential risks with your project.
The most difficult situation is when your client’s decision makers do not want the project to succeed because of a conflict of interests. For instance, one of our clients was operating in two major market segments. But one of the key managers was personally interested in just one of them. So he judged our work not by quality, but by its importance to his ‘favourite’ segment. Such circumstances are the hardest to deal with. The rule of thumb is to try to develop a deeper relationship with the person in charge. Sometimes it is also feasible to create a situation when a project just cannot fail. But it is often easier said than done and any general advice may prove useless. Just trust your intuition and your common sense. And be sure to have a deep knowledge of what is going on on your client side.
Conclusion
It took us several years and about ten customers to develop this technique and prove it is working. My management experience suggests that such an approach is applicable to any field, not just tech or mobility industry. Adopting the knowledge I shared in this article, you can reach 99% customer satisfaction and drastically improve your company's success and, what’s also important, give yourself a peace of mind. Rephrasing the old classics, it gave us serenity about things that did not require any change, courage to change the things we could change and wisdom to know the difference.