I have been helping one of my clients grapple with growth challenges. During the course of our conversations we got around to looking at the business from the standpoint of customers. As such, I asked for an analysis of the customer base by revenue and profit.The analysis shows that the top 10 customers accounted for the lion’s share of the company’s revenues and thus its health and viability.
On that basis I was expecting the management team to have in place a policy, plan, practices and people to take great care of these customers. I was expecting that there would be some kind of game plan: to keep in regular touch with these customers; to stay in tune with their changing needs; to come up with new products and services to meet these needs; and to ensure that any issues were identified quickly and addressed.
What did I find? I found that these customers were signed up some years ago, these customers are getting the service they contracted for, they have made no complaints, and so there has been no communication with these customers other than the monthly invoice.
“Ridiculous!” That was the statement that the MD made when I asked him to reflect on the importance of these customers to the business and the way that his business has been treating these customers.
It occurs to me that so many people – at all levels of the organisation and across all functions – are so immersed in the doing that there is so little reflection upon what is being done, and not done, and the implications. Which makes me wonder, how much of what occurs, and does not occur, in an organisation would show up as “Ridiculous!” if viewed through the eyes of the customer?
So why is it that the management team of this client are oblivious to the importance of their existing customers? The simple answer is that they are fully immersed in:
1) the sexy stuff of ‘developing new products’;
2) the sexy stuff of getting new channel partners so as to acquire new customers faster and grow market share; and
3) dealing with all that it takes to make the organisation work – the people issues, the process issues, the information issues, the financial issues, and the systems issues.
Behind the obvious, is the not so obvious. Is it possible that there is no focus on existing customers because the MD is from a sales background and enjoys the thrill-chase of new customer acquisition? Is it possible that there is no focus on existing customers because the other directors take their lead from the MD?
Is the same kind of thing true in your organisation? How much of what you do, and do not do, would show up as “Ridiculous!” when looked at from a customer view, or a longer term perspective?
Back to my client. The good new is that the MD has taken steps to engage with at least one of his top 10 customers. And there is significant opportunity to create value for this customer by selling them new products and solutions that are more in tune with their current and future needs. Sounds like a win-win to me and as such it shows up for me as being the best kind of business.
BSkyB is the dominant pay TV company in the UK and is more commonly known simply as Sky. Over the recent years Sky has expanded into broadband and fixed line telephony; to use the broadband service you have to get your router from Sky.
Back in December 2009 I signed-up for the triple play (TV, broadband, telephony) with Sky on the basis that this would make my life easier. After a promising start things went downhill fast and I wrote about that in this post: “How to convert an advocate into a detractor – a personal experience”
By December 2010 I had a much kinder, more understanding, perspective on my Sky experience and I wrote about it in the following post: “The value of transparency or why I am no longer mad at BSkyB” As a result of this change in attitude, pressure from my children and an attractive retention offer from Sky I decided to continue to be a customer. And everything was going well until Tuesday 6th April when my broadband router stopped working.
I contact Sky Customer Services and find my competence being questioned
On Tuesday morning I found that I did not have access to the Internet so I went to check the router. I found that the on/off switch had developed a fault: it only worked if I kept it pushed in with my finger. So I decided to phone Sky Customer Services to get a replacement router.
Once I found the Customer Service number (no easy task as none of the statements have a contact number on them) and navigated through the IVR, I was greeted by a friendly female voice. I explained the problem with the existing router and asked for a replacement.
To my surprise the CSA asked if I was sure that the on/off switch was not working. I found myself feeling offended and replied that I was 40+ years old, knew what I was doing and if I said that the on/off switch was faulty she could take my word for it. Why did I become offended? Because it occurred to me that the CSA was questioning my competence.
Company policy takes precedence over doing right by the customer and cultivating loyalty
Once we agreed that a new router was needed, the CSA told me that it would cost me £28. I questioned why I had to pay this cost given that I could cancel my broadband contract (as the twelve month period had already expired), sign-up as a new customer, pay the same monthly charge, and get the router free of charge.
The CSA’s response was that it was simply Sky policy to make existing customers pay for replacement routers. And that if I did cancel my contract and signed up as a new customer I would not get the router free of charge. No matter what I said the CSA did not budge: she simply insisted that it was company policy. When I asked about the rationale behind the policy, she did not explain. When I asked her to put me through to the Retentions team she told me that she did not know if one existed. In the end, I agreed to pay the £28 as I felt I had no choice.
Amazon can guarantee next day delivery, Sky can only state that it is likely to take 3 – 5 days
Once I had provided my credit card details, the CSA told me that it would take 3-5 days to get the router to me. I was astonished: Amazon can and have got books to me the next day (guaranteed delivery) and Sky can only promise 3 – 5 days! I think I simply said “3-5 days!”. The CSA responded by telling me that I could track the status of the router via the website. My response was that I had no interest in tracking the router, I simply needed it delivered asap; allowing me to track the router deflects calls into customer services but it does not help me to get my router on time!
Sky does not keep its first promise which makes me wonder about the second one
I then asked the CSA if it was possible to speak to her manager – not about her but about the Sky policy including the delivery time. The CSA was helpful. She went to look for her manager, found her to be in a meeting, took down a contact number for me and told me that her manager would ring back between 9:45 and 10:15. No-one rang back.
How am I feeling at this point? Truth be told, I am cursing my family for wanting SkyTV and persuading me to continue with Sky; I am cursing myself for my stupidity in continuing to do business with Sky. And I start thinking about how to bring my dependence on Sky to an end because it is clear to me that Sky does not care about its customers and cannot be counted on to deliver on its promises. Will Sky deliver the router in the promised 3 – 5 days?
Wednesday 7th April, around 7pm Suzanne from Sky ‘calls into my life’
At around 7pm on Wednesday 7th April I got a call from Sky and found myself speaking with Suzanne. She asks me how I am and I ask her how she is. I am pleasantly surprised by her refreshing honesty: she tells me that she is well and will be even better when it is 9pm and she can go home. Wow, I am speaking to a real human being! I like her already.
Suzanne then runs through the SkyTV package. She compliments my choices and asks me what I watch. I tell her that the SkyTV is mainly for my children and list their favourite shows. After listening, Suzanne brings the conversation back to me and asks if I watch anything at all. I tell her and she replies that she likes one of the shows that I like. I feel comfortable talking with Suzanne – she occurs as genuine and actually interested in me.
Next, Suzanne runs through the services I have and tells me that she can save me £2.50 a month on the broadband if I sign up to another 12 month contract. I reply that no amount of money would entice me to commit to another 12 months with Sky. I say that whilst SkyTV is great, the rest of Sky particularly the broadband bit is absolutely terrible. Furthermore, I say that I simply have no confidence in Sky as a brand: I just do not trust Sky to treat me fairly, to look after me as a customer. Then I relay my previous days broadband router replacement experience.
How I fell in love with Suzanne and she changed my mind about Sky
All the while I was talking and sharing my frustration and disappointment, Suzanne listened – she stopped selling and simply listened. She did not argue with me, try to refute my experience or to change my mind. She simply said that she understood how I was feeling and could understood why I would not want to do business with Sky. Then she asked me to hold on for a moment.
She came back and told me that she was going to refund the £28 I had paid for the router – no strings attached – as a gesture of goodwill. At this point I found myself reluctant to take up her offer as I did not want to ‘owe Sky anything’ – that is how much I loathed Sky! Yet, I found a moral pressure to grant her request: she had treated me with respect and it was now my turn to reciprocate - so I gave her my credit card details. Then she surprised me again.
Suzanne asked for my patience explaining that she had asked her manager to do the refund. Why? Because Suzanne does not do refunds – it is not part of her role and she does not have the authority. I totally get that Suzanne has gone out of her way to help me! She did not have to do it, she could simply have wished me well and left it at that when I refused her broadband pitch. And I am grateful to Suzanne and I tell her that. I even tell her that she single-handedly (with the help of her understanding manager) has changed my perception and feelings towards Sky.
When it comes to delivering a memorable customer experience and cultivating loyalty there is absolutely no substitution for caring for your customers. And caring for customers comes down to employing people like Suzanne (and her manager) and allowing them the leeway to be great – to take the right actions, actions that build gratitude. Why? Because gratitude leads to loyalty.
A friendly CSA following the script (as set out in the Quality manual) and adhering company policies is not always enough. It is necessary to take the customer’s individual circumstances into account. In human affairs fairness and helpfulness are critical needs. Violate these rules and you almost guarantee losing the customer. For example, The first CSA I dealt with did everything by the book and was friendly throughout. Nonetheless, she left me feeling that she was a prisoner of Sky’s unfriendly customer policies and practices and so she was unable to help me with my problem.
Company policies and practices are some of the biggest obstacles towards delivering memorable customer experiences and cultivating loyalty. Take a good hard look at your policies and practices. Are they fair? Do they meet customer needs? Do they get the balance right between trusting customers and being taken for a ride? Do they balance the long-term against the short-term focus? Do they help or hinder your staff from delivering great service and establishing an emotional connection with your customers?
Make sure that your people who interact with customers are in a position to explain each and every single policy that impacts the customer in a way that occurs as reasonable in the customer’s world. For example: why does it take 3 – 5 days to get a broadband router when many companies can do next day delivery? Or why do Sky customers have to use routers supplied by Sky? Why can’t I use one of the three routers I have sitting at home?
PS: I have only been able to write and upload this post because I figured out a way of making the existing router work: glue, dice and tape to keep the on/off button pressed in – take a look at the photo below. Lets hope the replacement router arrives before this solutions gives way!
It strikes me that organisations can take a big step forwards in becoming customer centric simply by measuring, reporting and talking about the impact of their actions on customers and the value that customers represent to the business.
Allow me to illustrate this by using a consulting experience at a brand name telco. One of the things that really matters to customers is how easily, quickly, effortlessly, conveniently they can get a replaced handset if they have an issue with their existing handset. The functional department that is charged with this task is the Device Logistics.
What do you think the focus of the typical Device Logistics function is? The focus of the function is, typically, on devices, operating cost and service levels. As a result management talk about and measure the no of devices that needed to be shipped, no of devices on back order, lead time between ordering and receiving handsets, no of devices shipped, no of devices delivered to the customer address within the SLA, productivity and cost of operations.
Not once did I hear conversations about customers, nor the impact of policy and practices on the customer’s life or attitude towards the company.
Now imagine thinking about the Device Logistics function in terms of impact on customers. If such an approach was taken then management would be measuring and talking about the following types of matters:
- How many of our customers have been impacted by our delivery process in the last month?
- How many customers have we lost as a result of our policies and practices?
- How much revenue, profit, lifetime value has walked out of the door as a result of these policies and practices?
- What kinds of customers – Gold, Silver, Bronze, Young, Professional, Older – are we losing?
- What will it cost the business to replace these customers with new customers so as to replace the revenue, profits and lifetime value that has walked out of the door?
- How many potential new customers have we lost as a result of the bad word of mouth from existing customers who have been disappointed by us?
- What is the cost associated with this bad word of mouth?
- How many customers ended up calling the contact centre to ask questions and/or make complaints about the handset replacement process?
- What cost did the business incur in dealing with these customers – their questions, their complaints?
- How many hours did customers spend waiting for us, at home, to receive their replacement handsets? What is the cost to our customers of this waiting?
- How can we do away with the biggest cost and inconvenience – making them staying at home all day – we impose on our customers?
- What would be the impact on customer retention, customer loyalty, as a result of designing the handset replacement process from a customer perspective?
- How can we engage our customers in the handset replacement process so that we all come out as winners?
Thinking in terms of customers and impact on customers – in terms of customer satisfaction, customer retention, customer loyalty, word of mouth, brand reputation – can be applied to every single function that touches the customer.
My assertion is that organisations will only make the transition towards becoming customer centred, designing and delivering better customer experiences, when the organisation as a whole and silo’s in particular think about operations in customer terms. Specifically, the impact of operational practices on customer retention, customer loyalty and word of mouth.
What do you think? Have you seen this in practice? If so where?
Ok, you have just got a new customers and you want to keep that customer happy: you want to keep her and thus build an annuity stream from her. Looking at the situation from a service centred (and I would argue normal human perspective) you have three strategies available to you:
- Do your best to make sure that there is agreement on expectations and that you don’t create problems for your customer;
- Make it easy for the customer to get hold of you by prominently displaying your customer services number;
- If and when the customer contacts you then deal with her problem or complaint there and then with empathy.
Where is the leverage in this? Surely the leverage is in the first of the three strategies: doing your best to ensure you and the customer have the same expectations and that you do not create problems for your customer.
So why is it that so many companies do such a poor job of this? Let me give you just three examples:
- I know of one brand name etailer that knows that their shopping process causing big problems for them and their customers and yet continues to do nothing. When you place an order the website forces you to enter your credit card details leading you to think everything is done, settled. Yet, this credit card data is only processed later when the ordered items are despatched. As a result some customer payments do not go through because the card is no longer valid or because the details supplied by the customer were incorrect. Of course this comes as an unpleasant shock to the customer who was left thinking that their credit card had been accepted – when she had placed the order.
- Mobile phone companies continue to sell mobile phones that they know have faults. They know because they keep a track of which phones are failing and sent back by their customers. They even know what the main defects are on these phones. Yet they continue to sell them to new customers knowing that it will lead to trouble down the road!
- When I joined BSkyB and took out a bundled (pay TV, broadband, fixed telephone line) package with BSkyB to simplify my life I found that it did nothing of the kind. Whilst BSkyB did a great job of setting up Sky TV I had a horrid time getting the broadband set up. And when I wanted to get the issue fixed or later cancel the order I found myself bouncing between different customers service teams and different customer services numbers. In the end I was not able to cancel my order because I found out that I had actually been signed up for three different orders – each with different start dates, different end dates and different conditions!
What if these companies practiced transparency? What might be the results?
Lets take a look at my BSkyB experience – particularly why it was that I was so mad with BSkyB and am not anymore. What has made the difference? Well as a result of research I now know what I did not know before. Specifically, I have found out that:
- BSkyB has made up of product divisions, TV belongs in one division, Broadband in another and so forth;
- The contact centres for Sky TV are outsourced to one company, the contact centres for broadband are outsourced to another company and so forth
From this information I can now make sense of my baffling experience. No wonder that I had to contact one set of people to get the TV services installed and another set of people to get the broadband set-up. No wonder the SkyTV contact centres did not have a clue about the order I had placed nor about my broadband issues. No wonder that the Broadband folks had no idea of my total order and were not able to deal with anything other than broadband stuff.
Being a human I can empathise with the human beings who were on the end of the phone – in some of the most infuriating interactions I recognise that I was talking to the wrong people because I had a faulty map of the territory!
But why did BSkyB not make this clear to me? Why did they give me the impression on their website that I could simplify my life by buying the bundle of products from them? Why did they give me the impression that they would take care of it all and I would have a single point of contact?
If they had told me then it is possible that I might not have signed up and become a customer. It is also possible that I would have signed up and very clear on what to expect and as such would not have experienced a horrid time dealing with BSkyB.
Yet I cannot help thinking that in a structure where customer acquisition is separated from customer retention, this kind of behaviour is simply what occurs. So the access to transformation in behaviour is to change the structure: to integrate getting customers and keeping customers under the same person, the budget, the same department.