Most of my career has been in managing services businesses. You know, the kind where people actually work on some sort of problem for a client for a fee. I have been blessed to work with really great teams of folks who care about their clients, understand the products and environments and are willing to go the extra mile (actually lots of airline miles) for their project teams.

One of the difficult management issues that arise is how to evaluate these folks and provide an incentive compensation program that works.  Sure, you can measure billable hours, profitability, utilization or professional growth.  Those are relatively easy to track, but are not always under the consultant’s control. As my friend and incentive guru David Kelly says, there are lots of ways to demotivate your staff.

But, you say, the real measure of what your staff is doing is Customer Satisfaction, right? Just measure Customer Satisfaction and then reward people on that. Of course, why didn’t I think of that?  Oh yes, it’s because there is really no good way to measure it in a service business.  In a product business, you can look at returns, customer complaints, help desk issues etc.  But in a pure services business, you need to look at project progress plans, client politics, change orders, working conditions, rework, team dynamics, systems —lots of interrelated pieces that can’t be readily quantified. Wait, I know… What if we were to give the client a survey that asked how we were doing?  That would solve the problem, right?

Not so fast. Sure, you could give the client a survey.  Now the consultant or project manager needs to get the client to fill it out.  Many times the client will not fill it out — legal won’t let them, no time, not on the critical path.  How do we rate the consultant then?  Other times it is either all 1’s or all 5’s (it doesn’t matter for this discussion whether 1 is best or 5 is best).  And much of that is related to the client’s demeanor and general angst at the time that the consultant does the asking.  And that is not even bringing up the subject of the “you scratch my back and I’ll scratch yours” type of discussion between the project leader and the client.

I have recently been involved with two transactions that furthered my discomfort over the use of client surveys.  Over the December holidays, my family took a cruise with Holland America. Our cruise was good in many areas, but not overwhelming.  On the last day of the cruise we were handed Cruise Surveys and the Cruise Director explained how the surveys should be filled out.  Everything on the form was ranked 1 to 9, where 9 was outstanding.  Our instructions included: “The highest score is 9 because, of course, 10 is perfect and we don’t pretend to be perfect.  However, if you enjoyed your cruise you should mark 9’s on the survey.  The crew gets paid based upon your filling out 9’s.  Feel free to add comments, but if you were happy, remember to give us all 9’s.” You get the picture.

If I was the COO of Holland America, that Cruise Director would have been history at the conclusion of his speech.  What is the point of a customer survey if you embarrass or cajole your customers into giving you the scores you want? How can Holland America Corporate understand how satisfied their clients are with the service they receive?  As you might guess, my survey was not all 9’s and had plenty of comments.  I don’t know how the surveys were evaluated, but I never received a call from Holland America (the surveys were coded to indicate the cabin), so I can only assume that they were happy with the way that their crew performed according to my survey.

Lest you think that I am only taking aim at Holland America, it happens in other places too. Last time I brought my car in for service, the service manager delivered the fixed car to me and said that I should expect a call from “Corporate” asking about my service experience.  If there was any reason that I could not give them a 5 down the board, to please call the service director at the dealership.  Now this was a little more benign.  Sure the service manager would have an opportunity to fix my problem, but he was predicating this on getting all 5’s on the survey.

There are too many ways that a Customer Survey that is used for incentive compensation can be misused.  Remember that the behavior that you get is the behavior that you incent.  If you want all 9’s on a survey, you will get them.  Perhaps not the underlying business behaviors that cause 9’s, however. David expounds on this topic as well in Commission Plans – Let the Games Begin.

If you have some good ideas on how to incent Service Providers or how to measure Customer Service in a services environment, please let me know in the comments.