ESQi: Why is a 20-year-old service measure still so influential?
There are no shortage of customer service metrics - from standard call centre measures such as first call resolution, to broader metrics such as customer satisfaction, all the way through to measures that have become strategic arbiters such as Net Promoter Score (NPS).
But 20 years ago, one business rolled out its own bespoke measurement programme that has proven so successful that it not only continues to shape the entire company's service structure, but it also laid the groundwork for the aforementioned NPS.
The business was Enterprise Rent-A-Car, and back in 1994 it developed a simple but highly effective way of finding out what keeps customers happy, based on the findings from a two-question survey asking:
- How would you rate your last Enterprise experience?
- Would you rent from Enterprise again?
Developed over a number of years, this survey - the Enterprise Service Quality Index or ESQi - was designed to find out what makes loyal customers and who the loyal customers are, based on the concept that making customers loyal is a key growth driver.
The index has subsequently been hugely influential throughout the organisation: incentivising staff, identifying satisfaction drivers and shaping strategic management.
In this article, Enterprise assistant VP Brian Swallow outlines how ESQi has influenced how his company operates, and why this kind of service and satisfaction measurement should also be such a priority to your own organisation.
“Completely satisfied” are two words every company wants to hear from its customers. It’s a simple but effective performance yardstick.
This is the measure that Enterprise Rent-A-Car has used over the past 20 years to assess the quality of customer care offered by branch employees. It telephone surveys 100,000 customers every year just in the UK and measures how many say they are “completely satisfied” with the service they received. This is then rolled into a score - the Enterprise Service Quality Index or ESQi - which drives much of Enterprise's decision-making.
ESQi helps the company go a step further. For rental branches, customer service measures are the performance measure. Employees cannot seek promotion unless their branch ESQi is at or above the average for the company. This ethos stems from company founder Jack Taylor, who believed that if you look after your customers, the profits will look after themselves.
Taylor’s mantra has remained at the centre of our company’s business model. Now in its 20th year, ESQi has not only proved a robust management tool, it has made great customer service a key driver for all employees.
We have watched with interest the heated discussion on the role of digital customer service and how it offers opportunities for businesses and their customers. These new platforms have changed how the consumer interacts with company employees. At the same time, digital platforms have reduced the requirement for companies to deliver customer service in person.
The beauty of these new platforms is that they deliver data that can be easily measured and digested. If customer service is to be improved, information on how effective it is has to be available.
This is why we Enterprise still values ESQi. By giving us a clear benchmark of how “completely satisfied” our customers are, it has enabled us to refine and improve the local service we deliver at each and every branch. It has been absolutely vital in our business success and in helping us to become the largest car hire company in the world.
What is ESQi?
ESQi data is collected on a monthly basis when surveys are sent to thousands of randomly selected UK customers asking about their experience. Customers are asked how satisfied they were with the service they received.
The real value of ESQi as a management tool is that the data is collected at each individual branch.
Branch managers have nowhere to hide if their customer service is not up to scratch. ESQi results – specifically the number of customers who were “completely satisfied” - are included in the branch’s profit and loss statements. Customer service figures are important as any other result.
Why is customer satisfaction as important as profits and growth?
One of the most important lessons ESQi has taught Enterprise is that “completely satisfied” customers are three times more likely to be loyal customers or to recommend Enterprise to their friends than those who were only “somewhat satisfied”.
Ultimately, customer satisfaction is more than just something for a company to be proud of. It is a key component of business success. Promoting customer service is in many ways a no-brainer, but managing it in a way that makes it possible to improve locations that may be underperforming, or reward employees who are exceptional at delivering outstanding customer care, requires a transparent measurement tool. By honing ESQi into a very simple but powerful metric, it sharpened Enterprise’s collective attention on the central role of customer care, making it a mainstay of employee focus.
In this way, ESQi became more than just supplementary data. It keeps managers focussed and reinforces the company message that customer satisfaction is a cornerstone of the business model. Profit on its own is not enough.
Making a career out of customer service
This focus on customer satisfaction continues to determine the sort of person that gets ahead at Enterprise.
ESQi scores follow employees from one job to the next. Managers won’t get promoted without a consistently high ESQi score. It simply doesn’t matter how high your turnover and profit is. Without a good record of demonstrable passion for excellent customer service, reward and promotion will not come.
One big advantage of Enterprise’s business model is the decentralised structure that gives employees a lot of room to take the right actions for their customers autonomously. This aids and encourages employees to really make a difference when dealing with every single customer.
The real focus for management is on the number of “completely satisfied”, not just “satisfied” customers. Customer loyalty is the target, so the aim is to maintain as many ‘top box’ responses as possible.
This approach has proved a success. Over the past five years around 80% of Enterprise customers stated that they were “completely satisfied” with the car rental’s customer service. Together with those customers who said that they were “satisfied” this rate goes up to more than 95%.
Still “completely satisfied”
The impact of ESQi on customer service and galvanising employees to make customer satisfaction a top priority did not go unnoticed by the marketing profession.
ESQi inspired Fred Reichheld to develop the Net Promoter Score (NPS), now used by marketers at Apple, American Express and many others. It differs subtly from ESQi in that it gauges customer loyalty rather than satisfaction, but, like ESQi, it is instrumental in affirming the link between customer satisfaction and business success.
This idea has been central to Enterprise’s business ethos for 50 years, and, since the adoption of ESQi 20 years ago, it has made customer service the major focus of employees. Despite finding its beginnings in the 1980s, making sure your customers are “completely satisfied” is important today as it was two decades ago.
Brian Swallow is assistant vice-president at Enterprise Rent-A-Car.