When Performance Standards Drive Away Customers

By Chris Ihrig

Today’s customers want things their way. And with so many options for them – and competition for companies – why shouldn’t they get exactly what they want?

The trick is to deliver the right product or service at the right time. But how do we achieve this?

One option is to implement performance standards. These standards clearly outline how employees should behave in any given situation. The benefit of these standards is consistent service delivery. The downside is that they may impede a team member’s ability to respond to variation in customer demand.

The other option is to empower employees. Managers can encourage their employees to take initiative, solve problems and respond to customer needs in a way that is consistent with company objectives and values.

Naturally, we at Fired Up Culture advocate for the latter of these options.

Suppose a customer has purchased an MP3 player from a local retailer. The customer takes it home, opens the package, and begins reading the owner’s manual. As he reads carefully, it becomes evident that the player he purchased has inadequate storage space for his music collection. He decides to upgrade to a player with more memory, so he sets it aside until he has time to return to the store.

Returning to the store eight days later, he approaches a customer service rep and explains why he would like to exchange the player. The service rep is conflicted. The performance standard states that he can make an exchange on products only when they are returned within seven days (unless approved by a store manager) and only if the seal on the original packaging is undisturbed (the packaging seal has been broken).

Now the rep faces a dilemma. Because he is alone in the store and can’t ask his manager for permission to make the exchange, he risks alienating the customer by sticking to the performance standard, or risks upsetting his manager by making the exchange. In most cases, the rep will stick to the performance standard and send the customer home unhappy.

Performance standards, no matter how well-intended, tend to inhibit the ability of people working within the system to deliver products and services tailored to the needs of each customer. More often than not, an unhappy customer will simply choose to do business elsewhere in the future.

If, on the other hand, the customer service rep was empowered to use his best discretion to satisfy the customer. The customer would have walked away happy, the company would have benefited from repeat business.

Take a look at the performance standards in your organization. Are they in the best interest of the customer? How can you better empower your team to deliver exceptional customer service?

If you’re trying to figure out the right balance of performance standards and empowerment in your culture, we encourage you to look into the Fired Up Culture Index, a powerful solution that enables leaders to drive high performance and breakthrough results.