You may have heard of “leading indicators” from economist Geoffrey Moore, personal development guru Stephen Covey, or James Harrington of Six Sigma fame. But if you haven’t, read on to see why you should be thinking of this as a key way to predict and prevent bad customer experiences.
Leading indicators are early warning signs for key events. Good indicators are noticeable before an event, allowing you to take action to ensure good outcomes.
When you think of “leading indicators”, think of the practice of drawing a line from a bad customer experience that just happened into the past events that lead up to that. Nobody wants their customers to be angry, or even disappointed, so what can we learn by retracing those steps to see where things went off the rails. Done individually, this is informative and should be understood to help remedy an individual incident, but that’s not what we’re talking about here. We’re talking about studying the aggregate of a customer segment, or even all customers to find indicators or pivot points that can lead to good or poor customer interactions down the line.
The classic example of a leading indicator is the level of restaurant customers’ drinks. Popularized by Danny Meyer, the founder of Union Square Hospitality Group in his 2006 book “Setting the Table: The Transforming Power of Hospitality in Business”. He has written extensively about the importance of observing and responding to subtle cues from guests and drink refills became an such indicator. The reasoning is that if a customer has nothing left to drink, or has to flag down a waiter to get a refill, then they are likely going to have a bad experience. By implementing a habit of walking past their assigned tables, a waiter can ensure that their customers have everything they need to enjoy themselves. You’ve likely seen this implemented with additional walk-bys from the waitress, other restaurant staff, or even a manager checking in to make sure your drinks are full and you’re having a good time.
Keys to good leading indicators: relevant, measurable, and predictive.
1. They align with your customer journey and have an impact on your business.
2. They can be identified and counted or measured regularly and reliably.
3. They are historically and logically connected to customer outcomes and are reliable early warning signs.
Now to be certain, drinking 5 glasses of Dr. Pepper doesn’t ensure that you’ll have a great restaurant experience! But the mechanism implemented to ensure that I do get those refills will also support other indicators leading to a good or bad experience, ensuring the restaurant can consistently provide a good experience across all customers.
The practice of identifying and responding to leading indicators is, in my opinion, a leading indicator of the success of your business management! So what are your organization’s leading indicators of customer experience, and what are you doing to manage them?
