© 2016 Service Management Group | Confidential | All rights reserved 2
The best method for your business
Linkage using other business metrics
Financial linkage + how it works
© 2016 Service Management Group | Confidential | All rights reserved 3
Let’s discuss
How do you measure
CX program success?
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• Demonstrates the relationship
between customer service and
loyalty and sales
• Gives a richer understanding
of the customer experience
• Helps prove out a “what’s
in it for me” for franchisees
or locations
Financial linkage Linkage with other business metrics
• CX data can be related to
location attributes and
business metrics
• Connection contributes to
improved field engagement—
locations are seeing the CX
metrics relate to other
important business metrics
they already believe in
There are multiple ways to look at linkage
© 2016 Service Management Group | Confidential | All rights reserved 5
• Demonstrates the relationship
between customer service and
loyalty and sales
• Gives a richer understanding
of the customer experience
• Helps prove out a “what’s
in it for me” for franchisees
or locations
Financial linkage Linkage with other business metrics
• CX data can be related to
location attributes and
business metrics
• Connection contributes to
improved field engagement—
locations are seeing the CX
metrics relate to other
important business metrics
they already believe in
Let’s look closer at financial linkage
© 2016 Service Management Group | Confidential | All rights reserved 6
Financial linkage + The Service Profit Chain
The Service Profit Chain,
by SMG co-founder
Len Schlesinger
From Analysis techniques used
to demonstrate financial linkage,
an SMG white paper
Putting the Service Profit
Chain to Work, a Harvard
Business Review article
Customer loyalty
Financialperformance
Employee loyalty
• Satisfaction
• Retention
• Productivity
• Satisfaction
• Spend/recommend
>>
© 2016 Service Management Group | Confidential | All rights reserved 7
Customer
Experience
The customer experience is one of many
factors impacting financial results
Products
Competition
Economy
Financial
Management
Location
Customer
Experience
Factors Impacting
Financial Results
Marketing/
Advertising
Store-Level
Drivers of
Satisfaction
Overall
Satisfaction
Loyalty
1. Top Drivers
1. Likelihood to Recommend
2. Likelihood to Return
$
Sales Growth
$
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Key ways to analyze financial linkage
Store-levelLinking store satisfaction
and loyalty with store comp sales
Transaction-levelLinking respondent satisfaction
and loyalty with individual spend
© 2016 Service Management Group | Confidential | All rights reserved 9
r=..109; p<.05
The relationship exists between
Likelihood to Return and comp sales
-0.2%
0.8%
1.6%
-1%
0%
1%
1%
2%
2%
Bottom 33% Middle 34% Top 33%
Co
mp
Sale
s
Average Return:
Range of Scores:
71% 77% 82%
65–74% 74–79% 79–87%
© 2016 Service Management Group | Confidential | All rights reserved 10
r=.116, p<.05
There is a significant, positive relationship
between Return and comp transactions
-5.5%
-4.4%
-3.8%
-6%
-5%
-4%
-3%
-2%
-1%
0%
Bottom
33%
Middle
34%
Top
33%
Co
mp
Tra
nsa
cti
on
71% 77% 82%
65–74% 74–79% 79–87%
Average Return:
Range of Scores:
© 2016 Service Management Group | Confidential | All rights reserved 11
r=..202 p<.05
There’s a relationship between Likelihood
to Return and higher comp sales
Bottom Middle Top
Co
mp
Sale
s
20%
10%
0%
-10%
50% 55% 60% 65% 70% 75%
Likelihood to Return
Store: 1234
Return: 73%
Comp Sales: 6%
Store: 5678
Return: 53%
Comp Sales: 9%
“Tourist Location”
Store: 5555
Return: 72%
Comp Sales: -9%
“Construction”
© 2016 Service Management Group | Confidential | All rights reserved 12
Key ways to analyze financial linkage
Store-levelLinking store satisfaction
and loyalty with store comp sales
Transaction-levelLinking respondent satisfaction
and loyalty with individual spend
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POS receipt links VisitView survey measures to data from actual visits
Linking satisfaction + loyalty
to customer behavior
• Date of visit
• Product(s) purchased
• Amount spent
• Associate or server’s name
© 2016 Service Management Group | Confidential | All rights reserved 14
The customer experience drives
average spend
$41.82
$51.31 $52.98
$58.03
$67.25
Highly Dissatisfied Dissatisfied Neither Satisfied Highly Satisfied
Avera
ge T
icket
INCREASE16%
SMG retail client – Transaction-level linkage
© 2016 Service Management Group | Confidential | All rights reserved 15
Service standards impact loyalty
measures + spend
Visited Fitting Room
Associate Made Helpful Suggestions
Showed Additional Products
✔ ✔
✔
✔
✔
✔
$44.42
$56.83 $57.55
$62.08 62%
40%
85%89%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$35.00
$45.00
$55.00
$65.00
$75.00
% H
igh
ly L
ikely
to R
eco
mm
en
d
Avera
ge S
pen
d
SMG retail client – Transaction-level linkage
© 2016 Service Management Group | Confidential | All rights reserved 16
Tip amounts correlate
to satisfaction levels
% H
igh
ly S
ati
sfie
d w
/ S
erv
er
Att
en
tiven
ess
Tip
s
1% 2% 4%
24%
69%$7.23 $7.19
$7.56 $7.76
$8.67
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Highly Dissatisfied Dissatisfied Neither Satisfied Highly Satisfied
SMG restaurant client – Transaction-level linkage
© 2016 Service Management Group | Confidential | All rights reserved 17
Chipotle Not Highly Satisfied n=3,312; Chipotle Highly Satisfied n=4,606; All other n=107-6,056
Great experiences drive
actual return behavior
33.2
31.0
Not Highly Satisfied Highly Satisfied
Average days to return to
Chipotle by OSATBrand
Difference in days
to return for Highly
Satisfied guests
Jimmy John’s +0.3
Noodles & Company 0.9
Jason’s Deli 1.7
Panera 1.8
Potbelly 2.1
Chipotle 2.2
Panda Express 2.2
Pei Wei 2.4
Wing Stop 2.8
Qdoba 4.1
Quiznos 5.1
2 d
ays
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Linkage using other business metrics
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• Demonstrates the relationship
between customer service and
loyalty and sales
• Gives a richer understanding
of the customer experience
• Helps prove out a “what’s
in it for me” for franchisees
or locations
Financial linkage Linkage with other business metrics
• CX data can be related to
location attributes and
business metrics
• Connection contributes to
improved field engagement—
locations are seeing the CX
metrics relate to other
important business metrics
they already believe in
Linkage types
© 2016 Service Management Group | Confidential | All rights reserved 20
• Demonstrates the relationship
between customer service and
loyalty and sales
• Gives a richer understanding
of the customer experience
• Helps prove out a “what’s
in it for me” for franchisees
or locations
Financial linkage Linkage with other business metrics
• CX data can be related to
location attributes and
business metrics
• Connection contributes to
improved field engagement—
locations are seeing the CX
metrics relate to other
important business metrics
they already believe in
Let’s look closer at linkage with other metrics
© 2016 Service Management Group | Confidential | All rights reserved 21
Let’s discuss
What metrics could you
connect to your CX data?
What metrics are valued
within your organization?
© 2016 Service Management Group | Confidential | All rights reserved 22
Other business measures to consider
Direct metrics
• Employee metrics – Contact center, employee engagement, manager tenure, turnover
• Operational metrics – Traffic information, drive-thru timers, EcoSure Audit
• Merchandise metrics – Inventory turns
Indirect metrics
• Store layout
• Store remodels
• Other store attributes – # of registers, type of kitchen, etc.
© 2016 Service Management Group | Confidential | All rights reserved 23
SMG client – Employee engagement linkage
Connecting Associate Voice with VisitView
71%
76%
Bottom 20%
Engagement
Top 20%
Engagement
Overall Satisfaction by employee engagement
Key learning: Employee engagement correlates with CX performance
© 2016 Service Management Group | Confidential | All rights reserved 24
Connecting employee engagement
performance + turnover data
55%
226%
16%
179%
0%
50%
100%
150%
200%
250%
Average Manager Turnover Average Team Member Turnover
% A
vg
. S
ix-M
on
th T
urn
over
Bottom Performers Top Performers
SMG client – Employee turnover analysis
Key learning: Top performers on employee engagement also see less turnover
© 2016 Service Management Group | Confidential | All rights reserved 25
r=.169; p<.05
On average, higher Recommend scores =
better comp sales + better SocialView ratings
-2.5%
-1.7%
-1.3%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
Bottom 33% Middle 33% Top 33%
Avera
ge C
om
p S
ale
s
Avg. Comp
Sales: -1.8%
2.8 2.9 3.2
58% 66% 73%Average Recommend:
Key learning: Social ratings follow store sales and loyalty
© 2016 Service Management Group | Confidential | All rights reserved 26
Manager interactions strike a chord with guests
Situation Insight Action
As an international restaurant
chain that differentiates
on the dine-in experience,
Hard Rock Cafe knows
the important role
manager interactions
play in ensuring customer
needs are being met.
But to quantify the service
standard’s impact and make
sure it was being executed
consistently, they decided
to use their customer
measurement program
to look into the data.
Results
Pairing the results of the
service standards question
with Overall Satisfaction
scores, Hard Rock Cafe
learned that guests who
interacted with a manager
were consistently more
satisfied than those who
didn’t—unfortunately,
these interactions were
only happening 40%
of the time.
Having made sure restaurants
were staffed appropriately
during peak times, they
knew it was lack of
execution—not limited
resources.
01 | Included Manager
Interaction scores in internal
communications as a key
performance metric
02 | Distributed monthly
communications to
restaurant and regional
managers to call out top
and bottom performers
03 | Invited SMG team
to company conferences
to relay the importance
of front-line execution
Overall Satisfaction3+ pts
Problem Resolution
6+ pts
of locations improved
Manager Interaction scores
%81
Reduction in call
center volume
12 %
Key learning: Improving in-restaurant can lead to reduced call center volume
© 2016 Service Management Group | Confidential | All rights reserved 27
Connecting drive-thru timers + VisitView scores
Key learning: Getting it right is more important than getting it fast
Overall Satisfaction
SMG restaurant client – Drive-thru times by Accuracy and OSAT
Accuracy
31% 47% 57% 71%
27% 43% 53% 68%
25% 41% 51% 65%
18% 34% 45% 59%
Dri
ve-T
hru
Tim
es
Worst Poor Good Best
Fast
est
Fast
Slo
wS
low
est
© 2016 Service Management Group | Confidential | All rights reserved 28
Fitting room cleanliness saw the largest, most
sustainable improvement following a remodel
41%
50%
44%
40%
61%
50%
43%46%
41%
36%
43%
36%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Non-Remodel 1–2 Months
After
6+ Months
After
% T
op
Bo
x
Restroom Cleanliness Fitting Room Cleanliness Ease of Locating Depts Store Cleanliness
Key learning: Remodel data can be linked to VisitView data
SMG retail client – Fitting room remodel vs. non-remodel
© 2016 Service Management Group | Confidential | All rights reserved 29
The best method for your business
© 2016 Service Management Group | Confidential | All rights reserved 31
Take action
Determine which metrics are valued within your organization01
Identify data owners and location 02
03 Share with your SMG project team for analysis