The Customer Satisfaction Complex - Getting to the Heart of the Matter

Has this ever happened to you? You bring in great shared services operational results, but instead of congratulations you end up heaped with a new round of complaints. How disheartening to a team that has worked so hard to meet the numbers that reflect their service performance!

Many shared services leaders find that meeting — even exceeding — service levels does not satisfy their customers. Service level agreements and key performance indicators are important indicators of operational performance, but they don’t equate to overall customer satisfaction. Service levels are usually process performance oriented and objective, while customer satisfaction is holistic and subjective. In truth, customer satisfaction is about achieving the overall SSO value proposition from the varied perspective of key client groups.

I propose an expanded model of customer satisfaction with three components:

  • Performance
  • Relationship
  • Value proposition

The performance and relationship components are focused primarily on the SSO.

The value proposition component extends beyond the SSO into the larger organization.

Customer satisfaction—performance

The hallmark of the performance components of customer satisfaction is that they are objective, can be measured using defined standards, are collected by data and system reports and can be audited and independently verified.

When it comes to operational performance, SLAs are the most accurate translation of service expectations into objective performance standards. Appropriately, a large percentage of customer satisfaction should be driven by how well these services are delivered, as measured by service levels. In addition, there are other important performance attributes to monitor, however.

Project management milestones and measures are used for tracking the effectiveness of transitioning and transforming service performance. These are feature, function and time bound metrics which may be tied to financial payments or pricing adjustments. Bringing in transition and transformation projects on time, on budget, and with the planned features, functions and benefits is much harder than running day-to-day operations in a steady state environment. Doing so builds a strong foundation for the relationship.

Another crucial element to satisfaction is the governance process. How well is it working, in terms of communications and timeliness in performance reporting? How hard or easy is it to use the change control process, order new services, etc.?

Financial performance is a more obvious factor: The budgeting or chargeback terms, and the billing and invoicing processes can be sources of irritation unless they are clear, timely and accurate.

The Customer Satisfaction Complex

TRANSITION - TRANSFORMATIONData, systems reportsSurveys, interviewsBoth
RELATIONSHIP - GOVERNANCE FINANCIALSShared services focusedShared services focusedShared services & organization focused


Customer satisfaction—relationship 

In assessing "relationship" elements, the topics are the same as for the performance component, but are now analyzed from the subjective, experiential perspective of the relationship and assessed through key client surveys and interviews. The relationship component focuses on the "how," instead of the "what," bringing in softer attributes and perceptions, which can be the harder part of the relationship to identify and satisfy.

Here's an example:

In 2001, AT&T (pre-SBC merger) entered into a major HR shared services outsourcing deal with Aon Human Capital Services (AHCS). Our SLA was comprehensive, with most service levels typically based on accuracy and timeliness. To assess customer satisfaction we needed a broader approach.

Our contract terms included customer satisfaction surveys of key client groups, with results to be pay impacting for the service provider’s executive team. Key client groups included end users (employees, applicants, retirees, etc.), process owners, HR generalists, HR executives, the governance team, and business unit executives—all with direct experience of the services.

End user surveys were managed by the individual service teams and centrally reported and reviewed as part of the performance reporting process. The annual customer satisfaction survey process for the other key client groups was jointly managed, as part of the governance process. There was a brief survey with a rating scale of one to ten. Each survey was conducted in person, by a member of the service provider’s
leadership team and attended by a member our governance team. Numerical scores were supported by feedback and anecdotes to better illustrate the ratings.

Gathering the "numbers" gave us a year-to-year calibration of where we were and the interviews were useful in maintaining a healthy and valued partnership. None of the issues that arose were a complete surprise, since we had ongoing communications throughout the year. But here, we had no other focus than the relationship. Our key clients had the opportunity to describe what happened and the impact on their
teams, customers and the business. After the surveys were calibrated and the feedback analyzed the results were published jointly and a couple of items were selected as areas for improvement.

On occasion, an issue raised in a key client interview was not owned or controlled by the SSO or vendor. HR delivery can easily be confused with policies, priorities and funding decisions made by the company. These discussions enabled us to address misaligned expectations. Our customer satisfaction process was complex, but it did ensure that governance teams understood the service performance and the health of the relationship. Was it worth it? Yes! Even though we managed through many business changes and stresses, customer satisfaction improved each year.

Customer satisfaction—value proposition 

Customer satisfaction management is very much like managing a brand. Customer perceptions are not always fair and are often impacted by external factors. Some brand attributes are anchored by the product or service and interaction with the company—the tangible elements most under the control of the company. Other brand elements are subjective and only partially influenced by the company—the intangibles. A brand
manager needs to manage both aspects to best effect.

Outlined below are some typical HR shared services value proposition objectives. These vary from company to company, and will change as business conditions and direction change.


  • Performance objectives specific to each service area;
  • Consistent employee experience across business units and regions;


Shared Services

  • Upgraded or new HR data infrastructure (PeopleSoft, SAP, etc.);
  • Expanded Employee and Manager Self Services

Retained HR

  • Free up HR generalist time for strategic activities;
  • Improve HR’s strategic business alignment;

HR Financials

  • Reduce (or control) HR per employee unit cost
  • Maintain costs per financial agreements or contracts
  • Control added/new charges;
  • Achieve retained organization savings;

Scalable Services

Fulfilling the value proposition requires sustained actions by both the SSO and other key client groups. Investment commitments must be met and the organization must be ready for system implementations and process improvements, per agreed timelines. Alternate access channels must be dropped to ensure uptake of Web-based employee and manager selfservices. Retained organization staffing changes are critical to achieving the full financial objectives. Resistance in the retained organization can be costly, and must be addressed.

How do you achieve the overall shared services value proposition? Working with the identified owner(s), conduct a shared services value proposition assessment using business metrics for the objective, as well as surveys and interviews for the subjective, aspects. Start with the business case: What business goals and objectives are to be achieved? Have the business needs changed? Which objectives are driven by decisions and actions outside of the SSO? Are there external factors (news articles or feedback from other SSOs) impacting internal shared services perceptions and expectations? How will the degree of attainment be determined and gaps identified? How will gaps that extend outside of the SSO be dealt with?

You need to address issues outside of your control as well, because it is better to be aware of all the perceptions, including negative ones, than to be blindsided when you least expect it. Unmet, unmeasured or misaligned value proposition expectations will undermine even the best shared services operational performance.

Customer satisfaction—the heart of the matter

Understanding and fulfilling today’s customer satisfaction complex is key to moving beyond effective delivery of basic services into the growth of responsibilities and investment in expanded services. This leads to shared services playing a larger and more strategic role in the transformation of any given function.

About the Author

Linda Merritt has recently retired from AT&T after 25 years of service. She was contract Manager for AT&T’s major business process outsourcing of HR and Payroll services covering multiple HR services and $75 million in annual value which achieved a more than 30% reduction in HR expenses while maintaining service levels and improving customer satisfaction. Merritt was a founding leader of the HRO Buyers Group – Large Markets and is continuing in her role as the Chair of the HR Outsourcing Association’s Research and Standards Committee.