Contrary to popular opinion it is easy to become customer centred

Reading the mountain of ink that has been written on all things Customer (strategy, insight, experience, service, CRM) one would be forgiven for concluding that it is a difficult if not impossible task for a large organisation to become customer centred.  You have to come up with a great strategy, to segment your customer base, to work out LTV, to build propensity models, to implement complex CRM systems, re-engineer processes, overhaul the call centre and employ an army of change specialists to get the culture change you want.

Contrary to popular opinion it relatively easy to become a customer centred organisation and Helen Edwards on her latest piece in Marketing magazine (A new consumer champion) has shown the way.

Commenting on the disbanding of the Consumer Focus (the body that sought to persuade organisations to put consumers at the heart of they do) she states that a great way to gain a competitive edge is for marketers to challenge category norms.  She says, get the team together and really get to grips with the following question: “How is our category currently letting people down?”.

What does she mean?  She illustrates by using example from three industries:

  • budget airlines force customers to ‘uncheck’ the insurance option twice.  Why?  Because it makes more money for the budget airlines. 
  • mobile network operators deliberately make their pricing plan complex so that it is difficult for customers to compare apples with apples and also because the operators make more money as customers typically end up on more expensive plans.
  • supermarkets who deliberately put the milk and eggs at the back of the store so as to force to walk past tempting goods and thus make impulse purchases that they never intended to make when they first came in the store.

She goes on to mention that the Virgin brand claims to put this approach at the heart of its business model: it strives to seek out practices that are self-serving and customers find unfair within a category and sets about changing them in a way that creates value for consumers and the Virgin brand.

So there it is.  To become customer centric an organisation simply has to give up self-serving category practices that exploit the customer rather than build goodwill with the customer. It does not involve business process re-engineering, lean, customer service offshoring, multi-million pound investment in CRM systems and so forth.

The question within each category is which organisation is willing to go first? The organisation that is best placed is the category leader and yet the category leader is the one organisation that is least likely to do so. And the category laggards often do not think that they have the luxury of sacrificing the short term for the longer term.  That is why category disrupton falls to the likes of Virgin, Apple, Amazon, Charles Schwab and so forth – organisations that are not invested in the existing way of doing things.

I once did some customer experience consulting with a category leader who had thousands of pricing plans which caused a big headache in the billing systems.  The case for simplifying the price plans was compelling from many angles.  Yet the Tops (people at the top of the organisation) vetoed the change every time the idea was suggested – it had been suggested many times over the course of many years: the company was making substantial revenue and profit from customers that were on out of date, expense price plans!

How to grow a culture that treats customers respectfully

We are embedded – thrown into and always living – in language.  The way that we see ourselves, others, the world at large is shaped by language:  the language that is spoken by leaders, managers, colleagues, friends, family and the media.

Language and culture are two faces of the same coin.  If we want our organisations to become customer focussed or even customer centred then the best place to start is not strategy, not CRM technology, not process redesign nor new metrics.  The place to start is the language that we use.

In the world of business, government, education and healthcare I have come across the following language used to describe the Customer: the market, target, conquest, opportunity, contact, detractor, promoter, advocate, punter, seat, patient …..  When it comes to the  people who work in the organisation, they are referred to as employees, resources, headcount, FTE and so forth.

This language dehumanises, it is the language of the engineer.  By being embedded in this language we strip our fellow human beings (customers, employees, suppliers..) of their humanity: the language makes it possible, even encourages us to treat them as objects – parts of the machinery.

What is our relationship to objects?  Objects are here to serve us and our needs – this is the relationship is it not?.  What do we do with objects?  Are we not always chasing after new objects.  Do we not neglect and often mistreat the objects that are no longer new?

It is this kind of language that calls into being attitudes and actions that:

  • leaves customers feeling misled, neglected, taken advantage of, mistreated; and
  • leads to demotivated employees who when they turn up in the morning for work are looking forward to only one thing – getting to the end of the day so that they can head home.

Imagine for a moment an organisation that speaks of Customers as family.  Our customers are our brothers and sisters.  Or perhaps our parents and grandparents.  Or our children. What attitudes and behaviour does this call into being.  What kinds of attitudes, behaviours and decisions does it rule out?  I helped design and provided the seed funding for a car servicing business that uses the language of family: which sees the customer as brother, sister, mother or father.  This is how this language impacts the business:

  • Car sales:  no car is sold to a customer that would not be sold to the owners mother, father, brother or sister;
  • Car repairs:  the level of care taken in repairing a customer’s care is the same as that which would be taken for the owner’s mother, father, brother or sister;
  • Car valeting:  the valeting is done to the same standard as that which would be done for the owner’s mother, father, brother or sister;
  • Employees: The people who work in the business are treated as family for example the owner goes and buys lunch for all of them and they eat together; and
  • Sales: the business has been in operation for just over 4 years and now 100% of the sales come from existing customers, referrals from existing customers or by word of mouth (reputation).

If the language of family is a bridge too far then how about using the language of tribe – the language of a club, a professional society, a community of interest.  For example I have noticed that solicitors treat other solicitors with courtesy that is born out of profound respect.

My RAC experience: another flaw at the heart of customer theory

Customer relationship theory rests on a set of assumptions declared as truths.  One of these assumptions is that a business will be able to make more profits from established loyal customers as it will be able to charge these customers higher prices and these customers will be willing to pay. Lets take a look at how well this assumption holds up in the real world.

One only has to look at the B2B world to find instance after instance where powerful customers are able to extract favourable terms from their suppliers whether these suppliers are renowned marketing agencies, management consultancies or software/IT companies. If I know I am a valuable customer and I know that you know that I am a valuable customer then I expect you – my supplier – to compensate me for it either through keen pricing, a better (customised) fit between what you offer and my needs, and/or higher service levels.

When it comes to the B2C world my RAC experience is instructive.  For about 10 years I had been a member of the RAC – car breakdown cover.  As the years racked up I noticed that my annual renewal kept going up and up.  At first I did not pay that much attention as the increases were relatively small.  Then two years in a row I spotted increases of the order of 20%+.  This prompted me to think that I was being milked with the automatic renewals so I did a lot bit of shopping on the Internet.

Within five minutes I figured out that I could take out exactly the same breakdown cover with the RAC through the Internet at 2/3 of the price that the RAC was going to charge me through the automatic renewal; I selected the RAC as the comparison shopping showed that the RAC came out top when the factor of price and customer review ratings were looked at together.

Did I follow the theory and say “Look I have been with the RAC for ten years and over that time I have had a several breakdowns and the RAC has looked after me so it is worth paying 1/3 more than I need to pay so lets pay it?” No.  I cancelled the automated renewal by phoning the RAC call centre.  And simultaneously I took out cover with RAC via the Internet. The whole effort took me 5 minutes – in the comfort of my own home.

The principle of reciprocity is simple.  You scratch my back, I’ll scratch yours.  I had been operating on that principle with the RAC and then it became clear to me that the RAC had not.  The result:  I do not trust the RAC and I do not suspect that I will ever trust the RAC.  Furthermore, I now have a decision rule: always, always do comparison shopping before renewing contracts with an existing supplier.

In the real world, human beings – across many societies – are brought up with the law of reciprocity.  Long term loyal customers expect the business to reciprocate by providing better value through a combination of price, the products fit to needs and service: they expect to be treated better than new customers.  This is the opposite of what is supposed and asserted as truth in customer theory.

To conclude: if you are selling customised solutions that take time and effort – from you and your customer – to customise and get right then you can charge a higher price.  However, if you are selling a commodity (like the RAC) then the best way to drive away loyal customers is to milk them by charging them higher prices.

 

Customer centricity: a tale of two clinics

Yesterday I turned up promptly for my 4:45 appointment at the Ascot Chiropractic Clinic as I had been in pain for several days and needed work done on my neck and back.  Upon arriving at the clinic and giving my name I was told by the receptionist that my chiropractor was running very late: she had to finish with her current patient and then see another two before she would get round to me.  I told the receptionist that I was not in a position to wait, she apologised and I left the clinic highly dissatisfied.

Up to that point I had been delighted with the Ascot Chiropractic Clinic; I have been a customer for about a year.  It is on my way to work – so it is convenient.  I like the receptionists – they are friendly.  I like my chiropractor – she is friendly and professional.  And it is relatively easy to get appointments within a day or so – in case of emergencies. So I was able to justify the relatively high price and the fact that I get charged if I do not give 24 hours notice when I wish or need to cancel an appointment.

Before becoming a patient of the Ascot Chiropractic Clinic I was a customer of  the Harrison Clinic. Whilst it was a pain to go there as it is 30 minutes drive the wrong way from work, I continued to be a customer for some four months.  This was because the receptionists were friendly, the osteopaths friendly and professional, when I needed an emergency appointment I was able to get one on the same day.  So in many ways the Ascot Chiropractic Clinic and the Harrison Clinic are similar if not identical.

Yet there is one huge difference that I have experienced:  the Harrison Clinic is customer centred and the Ascot Chiropractic Clinic is not.  Allow me to illustrate.

It was about 8am in the morning and I was getting ready to go to the Harrison Clinic for an 8:45 appointment.  Just then the phone rang, the person identified herself as Melina Harrison – I later found out that she is the owner.  She told me  that my osteopath had phoned in sick and so my appointment had to be cancelled.   She apologised, she sympathised with my disappointment and the inconvenience .  She went on to say that my next consultation would be free of charge.  I was double delighted.

The first delight was that I was saved from wasting an hour travelling to the clinic and back, not to mention the frustration and resentment that goes with wasted effort.  The second delight was that the next consultation would be free.  Yet, I remember thinking that the free consultation was not necessary.

When I did turn up for my next appointment, several days later, the receptionist identified me and told me that the consultation was free.  So the people in the organisation talked to each other:  I did not even have to recount my telephone conversation to get the free consultation.  Incidentally, at that point I was not thinking of asking for the free consultation as I felt that the Harrison Clinic had done right by me by alerting me promptly and thus saving me a wasted visit.

This behaviour reminded me of an earlier time when I had to cancel an appointment at the last moment: I was not able to drive to the Harrison Clinic as my muscles had seized up.  When I phoned the clinic and explained the osteopath had waived the fee even though he did not have to do that.  I got that the osteopath and the clinic had treated me well – trusted that I was telling the truth and waived a fee to build goodwill, cultivate a relationship with me.

Now why did no-one from the Ascot Chiropractic Clinic phone me and let me know that my chiropractor was running late and give me the choice of turning up later or rearranging the appointment to another date/time?  After all both the clinics have all of my contact details.  Both are in the same line of business.  And both are about the same size.  The simple answer is simply that the Harrison Clinic is centred around customers – customers as people.  And the Ascot Chiropractic Clinic is not customer centred, it is likely to be profession centred, work centred or revenue and profit centred.

Finding organisations that are customer centred is an exercise of finding a needle in a haystack.  So I have a feeling that I am highly likely to go back to the Harrison Clinic and just put up with the long drive there and back.

More wisdom here than a warehouse full of CRM and Customer Experience books

John Seddon is a management guru that anyone and everyone who is seeking to improve the customer experience should listen to.  This man has more wisdom to share than a warehouse full of CRM and Customer Experience books by academics – usually marketing professors.

I once did work on helping telco that was infamous for the poor service delivery when things went wrong.  Everything that John talks about, I saw in operation:

a) Whilst the espoused value was to serve the customer, the real lived in value was to make the metrics;

b) The metrics were focussed on minimising costs and ended up driving up costs;

c) The people at the coal face knew that the system was absurd yet they were not give the mandate to do the right things – they were expected to do the wrong things righter;

d) The customers continued to bear the brunt of the pain – a poor customer experience.

Here is the link to the video by John Seddon: Deliverology Destroys Service

 

Blind to the obvious – Part III

In the previous post I pointed out that CRM, Customer Experience and Customer Marketing teams are blind to the need to rethink and redesign the deep structure of the organisational operating system.  In this post I want to point out another blindness.

CRM, Customer Experience and Customer Marketing teams (and the elite in their organisations – the Tops) are blind to the fact that customers are more than economic beings or consumers of goods – they are people, they are human beings.

Customers are people:  they are human beings and when dealing with organisations they want, even need, the human touch.  John McKean wrote a book titled ‘Customers Are People: The Human Touch‘ which spells out what the human touch includes: Appreciation (acknowledge me), Respect (treat me respectfully), Trust (your actions must match your promises so that I can trust you).  Personally, I do not believe that John McKean goes far enough.  Today customers have a voice, express that voice through the Internet and want companies to hear and act on that voice – to enter into conversation with them.

Now it is quite possible to acknowledge a person in a way that the person does not feel acknowledged.  Too many organisations are collecting data and passing this onto their front line staff so that they can ‘acknowledge’ the customer.  Yet the humanity of the acknowledgement if missing – try it for yourself with the world ‘hello’.  You can say this word with reverence, with affinity, with care or you can say it in a rushed way or in a robotic way.   This is one practical example of being blind to the fact that customers are human beings with human needs, there are plenty more  – which I will not go into right now.

As a business coach I worked with my brother when he set up his car sales, servicing and valeting business.  At the end of the design phase we agreed some simple rules that drive the way that his business treats his customers:  treat each and every customers as if he/she is father, mother, brother or sister.  As a result of practicing this philosophy all of his business today – several years later – is referral business.  Customers come back again and again and they bring their family, friends and close work colleagues with them.

When you get that customers are people – human beings – you get that Customer Service in the fullest sense is the key: how you greet, welcome, talk with and treat customers when they are buying from you, when they have problems with using your products or service.  In this world, marketing as usually practiced has only a secondary and limited role to play.  Why? To a large extent your customer do the marketing for you – you can make it easier for them to do that by providing a platform like Amazon does to rate vendors and the products.

Curse of the functional-activity-efficiency mindset: my British Gas experience

Reading the press I notice that British Gas are recruiting a Customer Journey Manager.  Without a change in the functional-activity-efficiency mindset it is highly unlikely that this personal will do anything that makes any real difference to customers.  Allow me to illustrate.

Functional-activity-efficiency thinking is rife in just about every business.  The business is organised into functions.  The primary units of work that are managed are activities (not task – too small).  And the metrics that are in place to manage the resources linked to activities are mainly efficiency metrics.  The illusion is that this way of thinking, organising and managing business operations is the smart way.

I can categorically state that from a customer perspective it is not – a more ineffective and wasteful way is hard to imagine.  Let me share with you my experience with British Gas – this happened some two years ago.

I was on the phone to the customer services agent at British Gas to inform her that the pipe feeding the main radiator in my living room was leaking and I needed someone to come and fix it urgently.  The job was entered into the system, a date was agreed – the next day and an engineer was booked.  So far so good: I was relieved that my wooden floor would not be immersed in water.  I felt good at having taken out a £400 a year top of the range Homecare agreement with British Gas.

By 18:30 the next day the engineer had not arrived.  I become concerned so I rang customer services.  The agent told me that that engineer had been cancelled as they did not have enough engineers.  To which I asked why I had not been informed given that I had taken the day off work to be at home: it was that important to me to get the leak sorted out.  I did not get an answer, I did get an apology.  And we booked another date and another engineer.

Two days later the engineer arrived.  I welcomed him to my home as my saviour, offered him a tea/coffee and showed him the leaking pipe in the living room.  He spent some five minutes looking at it. Agreed that there was a leak and that it needed to be sorted out.  Great.  Then he told me that he did not have the equipment to do the job.  He went on to say that he would inform the office, place the order and an engineer would come out to fix the leak.  I was not happy.

I rang British Gas customer services and complained that I did not need an engineer to come out and tell me what I already knew and which I had already told the first customer services agent that I had spoken to.  The agent whilst polite was unhelpful – she did not have access to the engineers system so could not see what he had written.

Two or so days later I called customer services again.  I had to explain the issue from the beginning as the original ticket / job had been closed out as completed.  I was overjoyed at having to spend ten minutes or so to put this agent into the picture.  We agreed another date and another engineer.

The second engineer turned up on the due date; a second day that I had to take off work.  I welcome him, offered him tea/coffee and showed him into the lounge.  Groundhog Day!  He did exactly the same as the first engineer: this is a big job, I am not equipped to do a big job, need to order equipment, someone will be in touch to rearrange another date. Well no-one did get in touch so I rang Customer Services after several days.

Surprise, surprise the second ticket / job had also been closed.  So the customer services agent opened up a new ticket / job and I had to share an even longer story: the issue, the first engineer visit and the second engineer visit.

About two weeks after first contacting British Gas, the third engineer came and took a look at the leaking radiator pipe.  This one took a good look at the central heating system.  After about 30 minutes or so he told me that my British Gas Homecare policy would not cover me for the work that was involved – someone would have to dig up my living room floor to get access to the pipe, find and fix the leak – as it involve an engineer for more than two-three hours.  And that if I wanted the work done then I’d have to ring British Gas, make the payment and schedule the work.  He then packed up and left.

Back on the phone to British Gas Customer Services to make a complaint.  I get an apology and another – new – ticket / job has to be set up.  And I have to explain what the problem is and what has happened to date.  At this point I have lost my patience.

The fourth engineer arrived, I offered him a tea/coffee and showed him into the lounge.  He took a good look around like the last engineer.  Then he told me that to fix the problem pipe was a big job and would destroy my living room floor.  So I asked him if there was another way – a way round the problem.  He took another look at the central heating pipes and said yes.  We agreed to just cut the flow of water to that pipe and put in another pipe to feed the radiator.  Excellent – we have a plan.  Not so excellent – he tells me that he cannot do the work that day.  That he has to schedule the work for another day.  I ask him why.  He tells me that each engineer is given only so long to do a job.  And if the engineers make the figures then they do well financially.  If they do not then they lose out financially.

Now it made sense.  Each of the engineers got that if he did what needed to be done to solve my problem then he would end up being penalised for not making his metrics: time taken to do the job, number of jobs done during the day.

I am now in my fourth week and I am waiting for the engineer to cut the flow to the existing pipe and put in a bypass pipe. I have taken another day off work and the engineer has not turned up.  I ring customer services and the agent tells me that the engineer is ill so the work has to be delayed.  I am utterly frustrated at this point.  And decide to continue as I am truly intrigued as how long it will take to get the job done and what more hurdles I have to go through.  Meanwhile, I continue to put buckets to hold the leaking water, use the mop to clean up the water on the wooden floor.

By the end of week six the work is completed. The fourth engineer the one that was helpful, resourceful, truthful came back and spent half about half a day to do the work. I have cut the story short: in the end the job got done because I had got utterly fed up of repeated failure, I had escalated my complaint and finally the field services manager for my region had called me and told me he was sorry for my experience and he took personal responsibility to get my problem fixed.  He was a man of his word, thank you and all the best wherever you are.

Why did it take six weeks to fix a leaking radiator pipe? Why did I have to make numerous phone calls to customer services – each time explaining the whole thing from the start?  Why did it take a total of six engineer visits to do what turned out to be a four hour piece of work?  What was the total cost – customer services time, engineer time, travel costs, field services manager time – to British Gas?

Did I have such a poor experience because the customer services agents or the engineers were incompetent.  No – they were all too competent they did what the system incentivised them to do.  So what did the system incentivise them to do – to make the functional-activity-efficiency metrics.  Specifically:

  • Each customer services agent was keen to make her metrics (time to close the call, first time resolution) so she took the details, booked the engineer, closed the customer services ticket; and
  • Each engineer (except the last one) saw what needed to be done, flagged it up as a big job needed special equipment, made it someone else’s problem and closed the job in his system so he could make his metrics;

So what was missing, if it had been present, would have encouraged more effective behaviour – the work gets done in one engineer visit taking four hour and a satisfied customer:

  • Making one person, one department responsible for the customer – to take ownership of the customer problem, keep the customer informed, see the job through to completion, anticipate and deal with things that can or do go wrong;
  • Looking at the work that needs to be done and the impact that it has from the customers view and putting in the metrics that go with that: for example time from when ticket is opened to when it closed and confirmed as being closed by the customer; number of calls the customer has to make to the customer services; number of engineer visits; number of days customer has to take off work etc

The benefits of looking at the work from an integrated / customer perspective is that it results in less wastage (one engineer one visit rather than four engineers and six visits) and satisfied customers (the leaking pipe could and should have been fixed the next day).

How did the story end?  I did not renew my Homecare agreement with British Gas. Why?  Because when I shared my story with my social circle I found that they had had a similar experience.  Like me they had found that British Gas did a great job of coming out and fixing small jobs – toilet overflow, leaking taps, stuck water valves, annual boiler service – and a poor job of dealing with the more important jobs: boiler breakdown, central heating leaks etc.