10 MIT SLOAN MANAGEMENT REVIEW FALL 2019 MICHAEL GLENWOOD GIBBS/THEISPOT.COM
FRONTIERS
C
ompanies pay a lot of attention to customer participation — getting customers
to play an ongoing role in the business by providing suggestions and ideas on
its products and services. Whether this feedback takes place through surveys,
comment cards, online forms, or other means, studies have pointed to the advantages
of encouraging such dialogue.^1 It can create a bond that enhances customer loyalty and
even a willingness to pay higher prices.^2
However, it also has downsides that many senior executives are not aware of. Indeed,
our research, which included interviews and roundtable discussions with 87 executives
and 276 employees in a range of service industries, found that enthusiasm for customer
participation wanes the closer one gets to the company’s front lines.^3 When customers are
encouraged to speak up, front-line employees can feel threatened. Even though they are
committed to advancing the objectives of the business, front-line employees sometimes
see themselves as caught in the middle, torn between representing the views of customers,
regardless of how reasonable those views may be, and what they think is reasonable.
[CUSTOMER FEEDBACK]
Avoiding the Pitfalls of
Customer Participation
When front-line employees feel torn between representing
the customer and what they believe is reasonable, they need
to know the company has their back.
BY OMAR MERLO, ANDREAS B. EISINGERICH, HAE-KYUNG SHIN,
AND ROBERT A. BRITTON
For example, customers sometimes
expect front-line employees to convey
information to management that goes
against their interests. This might include
complaints about them or their colleagues
or suggestions that could add to their
workload. When the requests have bearing
on the workers’ careers and job security,
resentment can ensue. Companies that
place too much emphasis on customer
participation may be setting up a dynamic
in which front-line employees are ex-
pected to tolerate poor customer behavior,
such as verbal abuse, for their own sur-
vival. This can have negative emotional
and behavioral consequences, leading to
feelings of betrayal and frustration by
employees who feel the company values
customer-generated information more
than their well-being. The perceived im-
balance can have insidious effects on
internal morale.
For organizations, the stakes are high:
While customer participation can be
beneficial, if managers don’t get it right,
front-line employees could decide to pas-
sively undermine it — or even actively
sabotage it. To protect themselves against
these potential negatives of customer
participation, businesses must keep
employees engaged and confident that
management has their back. In light of
our findings, we suggest five guidelines
for managers.- Don’t overemphasize customer
feedback in performance evaluations.
Paradoxically, when managers evaluate
front-line employees on the basis of cus-
tomer feedback, they can undercut their
objective of supporting customer satisfac-
tion. Workers sometimes respond by
focusing their efforts on minimizing com-
plaints and qualifying for financial rewards
rather than creating customer value. In fact,
consistent with prior research, we found
that rewarding employees for tasks they
would otherwise do can weaken their moti-
vation to serve customers.^4