CVS Health is tying executive bonuses to meeting customer experience targets to ensure accountability for customer outcomes across the C-Suite.
Linking customer experience “to compensation gave us a seat at the table and made people start paying attention, like ‘Hey, if you don't actually address this, you're not going to get paid,’” said Srikant Narasimhan, vice president of enterprise customer experience at CVS Health, at a conference in Boston this week.
Narasimhan, who joined the Woonsocket, Rhode Island-based healthcare giant in 2021, was previously head of customer experience of branch banking at Wells Fargo. Since he joined CVS, he introduced additional customer experience accountability measures for executives across the business.
He noted that linking bonuses to meeting customer experience targets was an important early step in a strategy to ramp up customer experience across the business. It should, however, be a temporary measure because of the effects on morale and risks the approach could be manipulated or gamed over time, he added.
“It's a good thing to do at the start. It's getting us in line, it's showing a commitment the organization has to it,” he said. “I think if you continue down the path, you eventually have to phase it out because it just culturally becomes very detrimental to what you're trying to achieve…I would love to be out here five years from now and say we took that off.”
Narasimhan stressed that companies should look at customer experience key performance indicators as part of a broader swath of metrics evaluated by CFOs and other senior corporate leaders. This is because many business decisions — including those that might not have an immediate impact on customers — affect customer perception of the brand, he said.
One example might be offshoring customer service calls. While the decision may reduce costs, it could also negatively affect customers, especially if they detect a reduction in the quality of service. One way to minimize negative effects on customers, he said, is to make the responsible executive accountable for increasing net promoter scores, a KPI linked to how customers perceive a brand or recommend it to others.
Separately this week, CVS said it was shedding about 5,000 jobs to help cut costs, with corporate positions primarily affected, The Wall Street Journal reported on Monday. On Wednesday, the company said it recorded a $496 million pre-tax restructuring charge for the three months ended June 30 in connection with an enterprise-wide restructuring plan developed in the second quarter, according to its earnings release.