Understanding the Difference between Outputs and Outcomes: A Comparative Analysis in Customer Support

In the realm of business analysis and design thinking, it's crucial to distinguish between outputs and outcomes. While these terms are often used interchangeably, they represent fundamentally different aspects of performance and impact. To elucidate this distinction, let's examine two contrasting approaches in customer support within the utility sector.

Definitions

• Output: Outputs are the immediate results of an activity or process. They are typically quantifiable and measure what is produced or delivered. Outputs focus on the efficiency and volume of work, often without considering the quality or long-term impact of the work.
• Outcome: Outcomes refer to the broader, long-term effects and impacts that result from the outputs. They emphasize the value and benefits delivered to stakeholders, such as customers, and align more closely with strategic objectives and overall success.

The world of customer support:

We all have experienced speaking to a customer service agent, and you have a taste of the mindset of the process architect on ways the service has been delivered. Let us look at the customer support process of two imaginary utility companies.

Scenario 1: Output-Focused Approach

At the first utility organization, the customer support processes were designed with a strong emphasis on outputs. The focus is on:

• Time Limitation: Agents were required to resolve customer calls within a strict 3-minute timeframe.
• Commission Based on Volume: Agents receive commissions based on the number of calls handled, incentivizing them to maximize call volume.
• Minimal Concern for Customer Satisfaction: Agents do not need to consider how customers perceive the interaction or service quality.

In this scenario, the primary output is the number of cases closed or calls answered within the stipulated time. This output-centric approach prioritizes speed and volume, often at the expense of keeping, growing, and bringing customers back to love the brand – a key tenet of customer support. While it may seem effective in increasing productivity and saving FTEs, it overlooks the customer's experience and the effectiveness of problem resolution.

?Scenario 2: Outcome-Focused Approach

In the second utility organization, the customer support department adopts an outcome-focused strategy with a focus on:

• Relationship Building: Agents are trained to build a cordial relationship with customers, identify root causes, and customer pain points, and address issues empathetically.
• Focus on Customer Happiness: The design principle emphasizes improving customer satisfaction and transforming customers from merely satisfied to raving fans.
• Get issues resolved at once: Agents are confident and can make decisions without passing complaints through convoluted workflows.
• Alignment with Strategic Goals: The approach aligns with the organization's broader strategic goals, aiming for long-term customer loyalty and enhanced brand reputation.

Here, the focus is on achieving positive outcomes such as increased customer satisfaction, improved loyalty, and a stronger brand image. The outputs, such as the number of calls handled, are secondary to the strategic goal of enhancing customer experience and fostering long-term relationships.

Key Differences

• Measurement: Outputs are measured by immediate metrics like call duration and volume. Outcomes are assessed by longer-term indicators such as customer satisfaction scores, retention rates, and overall customer experience.
• Value Proposition: Output-focused processes may lead to high efficiency in terms of call handling but may fail to deliver real value to customers. Outcome-focused processes prioritize the value delivered to customers, resulting in greater satisfaction and loyalty.
• Strategic Alignment: Outputs may support short-term efficiency but may not align with strategic goals. Outcomes are designed to align with and support the organization's strategic objectives, such as customer loyalty and brand reputation.

Conclusion

The distinction between outputs and outcomes is crucial for effective business analysis and process design. The first utility organization’s output-focused approach may lead to short-term gains in productivity but risks damaging customer relationships and satisfaction. While the company is saving funds in the customer support department it is expending capital in lead generation and marketing activities.

Conversely, the second organization's outcome-focused approach aims to create lasting value and align with strategic goals, leading to more meaningful and sustainable success.

By focusing on outcomes rather than just outputs, organizations can better serve their customers, achieve strategic objectives, and ensure that their processes contribute to long-term success and satisfaction.