Companies pay a lot of attention to customer participation - getting customers to play an ongoing role in the business by providing suggestions and ideas on its products and services. Whether this feedback takes place through surveys, comment cards, online forms, or other means, studies have pointed to the advantages of encouraging such dialogue. It can create a bond that enhances customer loyalty and even a willingness to pay higher prices.
However, it also has downsides that many senior executives are not aware of. Indeed, our research, which included interviews and roundtable discussions with 87 executives and 276 employees in a range of service industries, found that enthusiasm for customer participation wanes the closer one gets to the company's front lines. When customers are encouraged to speak up, front-line employees can feel threatened. Even though they are committed to advancing the objectives of the business, front-line employees sometimes see themselves as caught in the middle, torn between representing the views of customers, regardless of how reasonable those views may be, and what they think is reasonable.