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How to Achieve Meaningful CX Measurement for CX-Based Compensation

The Coronavirus pandemic has left no aspect of customer experience (CX) programs unchanged, especially compensation practices tied to CX results. COVID-19 has brought about uncertainty, but it also presents a unique opportunity to reevaluate—and redesign—CX-based compensation practices that companies have long held sacred. Let’s discuss how these practices are doing in the current age and how they might fare better during and after this pandemic.

Should We Eliminate CX-Based Compensation?

Many practitioners struggle with how companies tie compensation to CX metrics across their organization. Does this mean I am advocating that CX-based compensation should be eliminated altogether?

The answer is absolutely not. Having CX front and center as a beacon metric is critical for any business that claims it cares about the customer experience. So, CX-based compensation can still be very useful. However, brands should double-check whether they’re compensating employees based on CX metrics that those individuals can actually affect.

For example, would it really be ideal if a B2B company compensated customer loyalty for its B2B partner when it’s really just an agent for a third party? What if this hypothetical brand instead compensated its frontline employees on a metric more within their control, such as level of effort? Those employees would be incentivized to create a great experience, then be rewarded for their specific contribution.

The point here is that brands should always reevaluate the metrics they compensate upon regardless of events like this pandemic. However, the current global situation is an additional reason to hit pause and conduct these evaluations in great detail. Companies and their CX leaders can both double check that their CX-based compensation is sound and make any adjustments not only  to suit this new, pandemic-driven reality, but also for when this crisis is in our rearview mirror.

Should Everyone Be Equally Compensated?

This is a question that comes up frequently within organizations that offer CX-based compensation. Additionally, this question has been magnified by the pandemic because the customer expectations and service delivery have both changed drastically these past months.

Many brands offer compensation based on one or two beacon CX metrics—CX measures that everyone within an organization can get behind and strive to impact no matter their job or department. However, while organizations should certainly have these beacon metrics in place, there’s once again something to be said for the idea of levelling compensation to suit different employees’ ability to impact a specific metric.

This idea is important because it enables organizations to create a CX-centric culture, one in which every employee has a chance to make a difference while also giving employees who are especially close to a given process the chance to truly step up. This way, the latter group of employees who can make a larger impact will also feel incentivized to actually do so. Equally important is the notion of aligning compensation to impact or creating an organizational hierarchy that employees feel is fair, not arbitrary.

Aspirational but Attainable Goals

Another element for businesses to consider as they evaluate their CX-based compensation and incentives is whether to make goals aspirational but potentially unreachable, or attainable but not a “slam dunk.”

At several points in my career as a CX practitioner, I was responsible for setting corporate CX goals on an annual basis. My job was to balance the executive demand to move ever upward with an operational desire to ensure that we weren’t setting ourselves up for failure. Adding CX-based compensation to this balancing act can make it a bit more precarious—whether I signed up for it or not, our goal-setting had  a direct impact on my coworkers’ paychecks!

The trick with this dynamic, as with almost everything customer experience, is to meet everyone in the middle. That means being unafraid to challenge operations leaders to aspire for more while also having the courage to present facts to the C-suite and help them understand this aspirational vs attainable dynamic.

CX practitioners who can pull this balancing act off will be able to create realistic CX-based compensation goals that drive everyone to strive for more, not just be satisfied with hitting a goal. Reaching a consensus between all stakeholders results in goals that employees across the business will chomp at the bit to attain, and there’s no better time to reassess that balance than right now. Finally, since having a compensation impact is a great motivator, everybody wins—especially our customers!

Want to learn more about how to create mindful, meaningful CX management in the age of COVID? Click here to learn more about COVID’s impact on CX data.

About Author

Jim Katzman Principal, CX Strategy & Enablement

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