This is the second part of a three-part blog series. In this blog series, I’m focusing on the three questions I’ve been asked the most over my 20 years in various research consulting roles at MaritzCX. Last month I answered the question: “How do I increase response rates? Should I shorten my survey?” You can find that blog post here. This month I’m addressing the question: “How do I set goals for my CX program?”
The Recipe for Effective Goals
As most of you probably know, effective goals have several important qualities. I use the SMART acronym to set motivating goals because it is both comprehensive and easy to remember. Using this acronym, your goals should be:
- Specific – Precisely state what needs to be accomplished.
- Measurable – Clearly define what criteria will be used to determine if the goal is met and how these criteria will be measured. Make sure measurement processes are in place and they are valid.
- Attainable – Set a goal that is challenging but realistically reachable.
- Relevant – Make sure the goal pertains to the specific person or group trying to achieve the goal. In other words, the person’s or group’s behavior needs to have a significant impact on whether or not the goal is achieved.
- Time-Based – Set a firm timeline for when the goal needs to be achieved, but make sure the timeline is realistic.
Focusing on Attainability
When it comes to setting goals, I think the trickiest SMART aspect is attainability. Therefore, I’m going to focus on five things you should consider when you are trying to set realistic but challenging goals.
- The Current Score: One of the first things to consider is the current state of the score. Is it already quite high? If so, any targeted improvement will be more difficult to obtain than if the score is relatively low. It is usually much easier to move a score when there is a lot of room for improvement than when the score is nearing the top of the scale.
For this reason, I like to set goals in terms of “percent of opportunity.” For instance, if we have a goal criterion measured on a 100-point scale, a “ten percent of opportunity” goal would translate to 5 points if the current score is 50 (100 – 50 = 50. 10% of 50 is 5.) but only 2 points if the current score is 80 (100 – 80 = 20. 10% of 20 is 2.).
You should also consider when the score is “high enough” and improvement is no longer necessary. While most companies want to focus on continuous improvement, there does come a time when improvement efforts are unnecessary and perhaps counterproductive.
- Past Trends in the Score: Next, consider how the score has been trending over the past. It will obviously be more difficult to improve a score that has been declining over the past than one that has been increasing. For instance, consider the two trend lines below.These trend lines are mirror images of each other, with the left decreasing at an average of about two points per quarter and the right increasing at an average of about two points per quarter. Therefore, if no improvement efforts are put in place, one can reasonably expect two different outcomes for the score in the next quarter (48 for the chart on the left, and 52 for the chart on the right). For the next quarter a reasonable goal for the measure on the left might be a score of 50 (just stop the decline) whereas a goal of 54 (a little more than the expected score) might be appropriate for the score on the right.
These trend lines are mirror images of each other, with the left decreasing at an average of about two points per quarter and the right increasing at an average of about two points per quarter. Therefore, if no improvement efforts are put in place, one can reasonably expect two different outcomes for the score in the next quarter (48 for the chart on the left, and 52 for the chart on the right). For the next quarter a reasonable goal for the measure on the left might be a score of 50 (just stop the decline) whereas a goal of 54 (a little more than the expected score) might be appropriate for the score on the right.
- Variance of the Score: This part gets a bit statistical but try to bear with me. Scores are easier to move if they have a wide distribution than if they are narrowly distributed. Consider the distributions of two measures shown below. The one on the left has a standard deviation of 10 points (a standard deviation is basically the average distance the individual scores are from the scores’ overall average) whereas the one on the right has a standard deviation of 20 points. You can see how much narrower the distribution is on the left compared to the distribution on the right.
In a normal distribution, about 64% of the scores fall between one standard deviation above and below the overall average. What that means in this case is moving a score from 50 to 60 is moving past 32% of the population for the scores represented in the left chart, but only about 19% for the chart on the right. For this reason, I often use something like “what is ½ of the standard deviation” as a first estimate of what I might want to use as an improvement goal.
By the way, looking at the standard deviation also gives you a good sense of how to adjust performance goals for differently sized scales. For instance, the standard deviation for a 100-point scale will likely be much smaller than the standard deviation for a 1000-point scale. Setting an improvement goal of 5 points for the 100-point measure might very well be equivalent to setting a 40- or 50-point improvement goal for the 1000-point measure.
- Planned Improvement Initiatives: Think about what improvement initiatives you have planned. If you aren’t going to put improvement initiatives in place, you should expect little change in your outcome measures, except for changes explained by how your scores have been trending.
Consider Time and Other Contributing Elements
Even if you do have improvement initiatives planned, you need to make sure they have time to work before the next measurement of the outcome variable. Be mindful when deciding this, as it is easy to underestimate the time an improvement initiative will take. Remember, you’ll need time to develop the initiative, implement it across your organization, and wait for your organization to put it into practice and to get good at it. Then you’ll need additional time for the implementation to affect your outcome measure. Some measures (e.g., transactional customer satisfaction) are relatively fast to show change, whereas other measures (e.g., customer retention and customer loyalty) can take months or years to show effects.
- Your Organization as a Whole: There are lots of aspects about your organization that will affect how much change you can expect: Its size, its willingness to embrace change, and many other things. I think one of the most important factors is the company’s CX culture. How much does your company focus on customer experience? Do your C-level executives actively support and emphasize CX efforts? Does your organization have CX measurement systems in place? Perhaps more importantly, does your organization have mechanisms in place to act on CX findings? All of these factors will affect how much improvement is realistically possible from your CX efforts.
If you consider the five things above, I think you will get a pretty good idea of what are realistic goals for your company. Unfortunately, there is no simple formula to use and every case will be different. Good luck in your goal setting efforts and, if needed, we are here to help.