Orange to green - using a Customer Distress Index to strengthen proactive support
- Resolving issues proactively is an essential part of field service management. Sumair Dutta of ServiceMax takes a deep dive into creating a Customer Distress Index
There is a lot of talk of moving service models from reactive to predictive. Instead of waiting for something to break, you have the ability to predict when it might break and intervene appropriately. Traditionally, this was done in a time-based or interval-based manner but now there is a greater focus on the use of remote or point-of-service technology to build predictive models. However, there is much more to the provision of service that can make or break a customer relationship, which is why some service providers are now exploring the concept of the customer distress index.
Predictive service focuses on the asset and has downstream customer impacts as it reduces unplanned downtime. That said, predictive service is only one piece of the overall proactive customer management strategy that we see more and more service organizations interested in adopting. Proactive support requires an emphasis on resolving issues before they arise, as per the predictive piece, but also requires a focus on uncovering and meeting unexpressed customer needs. Essentially it requires an understanding of how customers can drive the most value from their relationship with your service organization.
To this end, we see many organizations build customer success organizations to drive a more account-focused relationship with the customer. These customer success organizations, if set up right and given the appropriate authority, can be extremely impactful. TSIA's 2020 customer success research found that those organizations that have the success function reporting to the appropriate C-level audience report a much higher growth rate compared to others. These customer success organizations will be essential when outcome-based services become more of a reality.
What is a customer distress index?
In aiding proactive customer success models, we have also seen a number of organizations build and develop algorithms or frameworks intended to measure customer distress. This distress index is intended to be a mathematical representation of a customer's experience with your service or overall organization. I was first made aware of these several years ago when working with the service leader at a large high-tech manufacturing company but have since seen these adopted by several medical device organizations (see reference in my recap blog of Field Service Medical 2020).
Most of these models are visualized in the form of a basic traffic light pattern where green is good, and red is bad. They can also be expressed as an overall score, where a customer is distressed if they have a particular score and higher - for example, a customer is distressed if their account score hits a 45. Most customer success software platforms such as Salesforce, Gainsight, Totango, and more, also enable your organization to build customer status visualizations. For instance, here at ServiceMax, we use a red-orange-green visualization in our CRM system to manage our strategic accounts.
What's more important than the visualization is the formula that is used to determine the score or the color code. It requires an insightful understanding of all of the things that might place the customer in a level of distress that would either put them on the path to churn or reimagine their relationship with your organization. Typically, the current models that I have seen include things such as:
- Number of unscheduled service visits
- Time to resolution of recent service tickets
- Duration of time of open service tickets
- Number of Level 2-3 escalations
- Number of business interruptions due to service incidents
- Billing delays or errors in invoicing.
The distress index isn't designed to track a singular event, such as the customer being on hold for a very long time, but is intended to show a trend where a series of negatively perceived events might create a level of distress in the overall relationship. These factors might change over time with different groups of customers, and it is important for an organization considering such an index to continue to test and modify the model with real customer results.
The other element that can make a Customer Distress Index (CDI) successful is clarity around the steps that need to be taken once a customer approaches and crosses a distress threshold. What do we do once a customer goes from green to orange? This is typically where most organizations struggle as there is no clear definition or process of what needs to happen when a customer is distressed. It usually comes down to a determination of:
- Who is responsible for nursing the customer back to a non-distressed state? The high-tech organization that introduced me to this concept had a dedicated team that reported directly to the head of global escalations. The use of a dedicated global team is a practice that I have seen repeated at most large organizations but might not be feasible for those that are smaller. Others have relied on their customer success teams or their account managers.
- What authority do they have to support the customer? This usually comes down to responsibility and priority. If there are multiple stakeholders who touch the customer, who has the right of way? For a Customer Distress Index (CDI) program to be successful, all customer interactions should fall to the responsible party identified above. When it comes to priority, the person responsible for managing the customer might need to pull in resources from several business groups. Do these groups understand that a customer situation takes precedence over other priorities?
- What actions can they take? Once the responsible party has determined the issues specific to a distressed customer, is there a guidebook of steps that they can refer to in order to improve the customer relationship. For this, they might need to make resources available for the customer or ensure that every incoming request is handled with priority. They might also require the ability to apply discounts to certain services with the understanding that this will lead to the retention and growth of a customer down the road.
Best practices from early adopters
While the sample size of those with working CDIs in place is small, there are valuable lessons that can be learned from those who have already made the investment:
- Remember to be proactive — Most indices track events that have already taken place and don't consider what is likely to happen moving forward. For instance, a distressed customer might become even more distressed if there is an upcoming stoppage planned that they aren't aware of. It is vital to factor forward-looking events into your organization's customer distress model.
- Get the timeframe right — Every organization that has worked with a CDI has told me that their initially developed timeframe of when a customer is distressed was inaccurate. In essence, their distress trigger point came in too late as compared to when the customer was actually distressed. This made them expend a greater than expected amount of effort in regaining their customers' trust.
- Measure the emotional escalation — A distress index can capture an overall picture of a customer account, but it can never truly account for the level of personal frustration or disappointment in the mind of the person who is your customer. They might have staked their personal credibility on the relationship with your service organization and could be incredibly frustrated at how the relationship is being handled. This is especially important when the frustrated customer is the one making the decision around renewal. This is where personal relationships developed by the field service engineers or account managers become vital.
- Prevent the double dip — If you've done all the hard work to nurse a customer back to green, it is incredibly important that you build in protections to prevent the customer from slipping back to orange or red. This might entail an extended period of time when the customer receives priority support or other actions that ensure that the distress-causing triggers are not repeated.
As with most initiatives, the success of a Customer Distress Index requires an investment in resources and change management. The resource part might be relatively easy or one where you can build a justifiable ROI tied to customer retention, customer revenue, reduced concessions, or more. That said, it's the cultural and change management piece that becomes vital. Building a dashboard won't help you alleviate customer distress unless your organization is oriented around achieving better customer outcomes. Are you truly customer obsessed as an organization and is there clarity around what that means?