Set Customer Service Kpis Mit Sloan Management Review

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Mag Spring 2022 Outcome

The Quest for a Killer KPI

How radically simplifying performance metrics helped one visitor align employee behavior with organizational goals, make smarter investments in the business, and foster a culture of learning and cooperation.

March 08, 2022 Reading Time: 17 min

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Performance metrics are amid managers' most powerful tools: Setting the right goals and tracking progress accurately can help you have your business where yous desire information technology to go. To exist effective, though, goals and metrics need to be clear and simple, and the fewer the better.

In our growing company, nosotros've learned that simplicity increases our odds of achieving what we desire. When our goals were too numerous and as well complex, employees' decisions didn't sync up within or beyond teams, which meant groups and individuals were tugging in various directions and failing to produce desired outcomes at calibration. So we set out to place a single cardinal performance indicator that would unify beliefs within ane major client-facing group — the unit that designs, creates, and manages our online storefront — and could also serve every bit a shared currency across teams, enabling united states of america to make smarter investments in the business. But we realized that going all in on a KPI without putting some sort of cheque on information technology could have serious unintended consequences. We knew that whatever principal goal had to be bounded by a constraint, equally in, "Maximize X without reducing Y."

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This is the story of how Agoda, the Asia-based subsidiary of the Booking Holdings online travel group, made its manner to a unmarried "KPI + constraint" approach that helps united states of america run a skilful scrap of our business.1 Information technology took some trial and fault to get there; the KPIs we adult and tested along the way promoted both positive and counterproductive behaviors and outcomes. Gradually, however, we found our guiding principles, implemented them, improved our business outcomes, and fostered a civilization of learning and cooperation in the process.

Because we believe that our experiences and insights may exist helpful to other companies, both within east-commerce and beyond, we're sharing them here.

We Tested Our Mode Toward a Metric

Since the company's earliest days, Agoda has focused on continuously improving its forepart, or storefront — the website and mobile apps through which customers search for, select, and purchase travel products — to convert website visits into sales. By increasing its conversion rate, a digital business organisation tin can target its marketing more effectively, because existing customers are easier to appoint than new ones.

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About the Authors

Omri Morgenshtern is the chief operating officer of Agoda, a subsidiary of the Booking Holdings travel group. Robert Rosenstein is a cofounder and the chairman of Agoda. Peter Fifty. Allen, formerly Agoda's vice president of people, is a faculty member at Hult International Concern Schoolhouse and principal people officer at APL Grouping.

References

ane. Agoda, which is independently run, has offices in more than 35 countries. Information technology provides operations and marketing back up to other Booking Holdings companies globally.

2. One is Canary, a front-end analytics tool that operates somewhat similar Google Analytics only is specifically designed for our systems. Canary summarizes customer activeness, letting us see how many people hover, interact, click, volume, and drop off for every element of our hotel page (images, maps, ratings, and so on). When an element converts well, nosotros find ways to emphasize it and increase its effectiveness through design choices like size, color, and position. Canary too learns automatically when new elements are added to the front finish.

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Source: https://sloanreview.mit.edu/article/the-quest-for-a-killer-kpi/