Blind to the obvious – part II

I asserted in my last post that  many if not most organisations working on customer initiatives are blind to the obvious.  What specifically do I mean?

Organisations of all kinds (including businesses) are blind to the need to rethink and redesign the deep structure of the organisational operating system.  A deep structure that is brilliantly designed for the 20th Century (to push out and push on to customers the products and services that the organisation has produced) and totally inadequate for the needs of today.  A structure which encourages substantial investments in marketing and sales to ‘conquest’ customers whilst simultaneously insisting that every effort is made to cut the operating costs associated with supporting these ‘conquests’ in their post-purchase needs – cuts in customer service, field service, technical support.  A structure in which the right mind does not talk with the left – where Marketing is making x-sell and up-sell offers to customers who have already made complaints to Customer Services.  A structure  where there is talk of customer relationships and customer loyalty (which require a long-term play) yet the focus of effort is to do whatever it takes to make the revenue and profit numbers today.  A structure which spends millions on CRM projects whose impact – on the whole is – customer alienation and higher customer dissatisfaction.  A structure which rests on deception: making a set of promises (to the customer) that the organisation knows that it is unable and/or unwilling to deliver.  A structure that encourages keeping the customer at a distance and thus discourages any form of authentic customer engagement lest that customer see behind the veil of the story that the organisation tells to outsiders.

I will look at another perspective on being ‘Blind to the obvious’ in my next post.

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.

How to convert an advocate into a detractor – a personal experience

Sky is doing the right things: it has a product that many want – pay tv; it advertises and makes attractive offers especially when it comes to bundles (tv, broadband, telephone);  it has invested in CRM systems;  it has a big Customer Insight team and so forth.  That was my thinking in November 2009.

In November 2009 I made the decision to bring an end my relationship with my ISP (Zen Internet) and my fixed line telco (BT) and buy a bundle (pay tv, broadband, telephone) from Sky.  My reasons for making the change were to simplify my life (one supplier), get my children access to educational channels and value for money.

In early December 2009 I made my way to the Sky website, I configured my package, provided by MAC code for broadband switchover, entered in my personal and bank details and became a Sky customer.  Shortly after my website interaction I got an email letting me know what I had signed up for and the next steps: who will be contacting me and when.  At this stage I felt good – I felt I had made the right decisions and I was in safe hands.

A couple of days after I got an email letting about the activation of Sky tv: the next steps, the dates, a customer service number to call if I wanted to change dates for the engineer to come out and set up the sky tv.

I also got an email letting me know the next steps on the set-up of the broadband and the telephone line.  The email stated that everything was in hand, the broadband would be activated by 15th December.  And that Sky would contact me five days before the activation date.

At this point I felt reassured: here is a company that knows what it is doing, it is doing the right things – it is moving ahead quickly and keeping me in the picture.

Three or so days later the Sky engineer turned up on the agreed date.  In fact he rang me about 30 minutes before he arrived to let me know he was on the way.  Excellent – giving me advance notice and checking I am in so as not to waste his time.

The Sky engineer was a friendly chap who was clearly comfortable with people.  He told me what he was about to do and how long it would take.  Then he set about his work – installing the dish, setting up the Sky box and checking that everything worked.  In less than an hour I was watching Sky tv – great.  Then the engineer told me and showed me some handy tips.  Just before he left he gave me a card with his name and phone number and asked me to call him if I had any questions.  He mentioned that he did not live far and would be happy to call in on me if I was having any problems with the Sky tv.

At this point Sky had delivered a perfect customer experience.  I was delighted.  At that point I would have given Sky a 10 out 10: in NPS terms a Promoter.  Thereafter things went rapidly downhill.

Given that I use the Internet a lot and tv not much, I was keenly following the progress of the broadband switchover from Zen Internet to Sky.  When Sky did not contact me on the due date – five days before switchover/activation – I became concerned.  Two days later, I still had not heard anything so I called Sky.  This is where the ‘fun’ started.

The Customer Services agent told me that I had phoned the wrong number.  What?  I had phoned the Sky tv customer services number, I had to call the broadband customer services number.  When I stated that I had placed one order with Sky and expected to talk to one person to deal with my order I was told that this was not possible.  It became clear that behind the facade of one bundle, were multiple business units and I would have to deal with each of them to get what I had ordered.  I was not pleased as I felt that I had been conned.

I proceeded to ring the broadband customer services number and got through to an agent.  She proceeded to tell me that it had not been possible to switchover the broadband as the MAC I had supplied was wrong – the BT system did not accept it.  I asked why Sky had not contacted to let me know that was the case.  She replied that Sky had sent me a letter stating that.  I asked why Sky had not emailed me: I had interacted with Sky using the Internet and email and Sky had done the same.  She did not have an answer.  Her position was that I / Zen Internet had the mistake and that was that.  I told her that I would go back to Zen Internet and check the MAC code and get back to Sky.

At the end of this encounter I felt badly treated.  Specifically, I felt that the Sky agent had not listened, had not made any attempt to help, had been defensive and surly.

I phoned the Zen Internet folks.  I told the agent of my problem and I spelled out the MAC to him.  He checked it and told me that the MAC was correct.  I thanked him, he told me that he was pleased to help, and I called Sky’s broadband team.

When I got through to the Sky broadband team I found myself talking with a friendly chap.  I asked him to call out the MAC.  He could not tell me – he told me that he did not have it on the system.  At this point, I was really frustrated.  I pointed out that I had provided the MAC during sign-up through the Sky website and I shared with him my conversation with the previous Sky broadband agent – the unhelpful lady.  I asked him to take the MAC and move forward with the broadband switchover.  When I got off the phone I was thinking that either the MAC did not get from the web team to the broadband team and that the first Sky broadband agent (the female) had lied to me when she told me the MAC did not work.

A few days later I called the Sky broadband customer services line again to check how they were getting on.  And I felt that I was Bill Murray’s character in the movie Groundhog Day: No, your broadband has not been activated as you have given us the wrong MAC; but guys I checked with the Zen guys and they assure me it is correct; nope, the MAC is incorrect and so forth.

At this point I got that my objective of simplifying my life by switching to Sky had backfired: I was spending more time with Sky than I had done with Zen Internet and the broadband had not yet been switched.  So I called the main Sky customer services to make my complaint:  I placed one order for three products, you guys have delivered only one product and are not delivering the others, so I wish to cancel my order please.  The response was simply this: you have signed a 12 month contract, we are not going to cancel it, if you want to dispute that then write to these folks.  At this point I felt anger – for the first time.  Why?  I was thinking I have been conned and I am trapped – at least for 12 months!

So I went back to the Zen Internet folks and pleaded for their help.  I did not expect it as I was asking them to help me leave them for Sky.  To my utter surprise the customer services agent from Zen sympathised – ‘I understand why you want to switch they have the tv channels you want.  And with the bundle we cannot match their prices.  A shame because we look after our customers.’  He asked me to stay on the line whilst he accessed the BT system and checked the MAC.  He confirmed that the code I  had been given was  the code on the BT system.  He went on to mention that the problem I was facing was a common one with Sky – he suspected that the Sky folks were understaffed and as a result simply did not get around to doing the work to provision/set up the broadband.   Finally he volunteered to stay on the line whilst I called the Sky broadband folks.

Once again I am with the Sky folks, I have to tell the whole story a third time to a new agent.  And ask this person to check/verify the MAC on the BT system – there and then so that if there is an issue he can speak with the helpful Zen Internet agent.  At my insistence the Sky agent checked on the BT system and confirmed that the MAC was correct.  He went on to say that now the switchover can commence.  I thanked him, hung up and thanked the Zen Internet agent.  And hung up.

Finally!  Then it dawned on me that I had another issue: Sky were due to take over the fixed telephone line from BT and they could make a mess of this.  More importantly, I simply did not want Sky to control my access to the fixed telephone line and the broadband services that were sitting on top of that.  So I cancelled the fixed line switch and continued with BT even though I ended up paying £5 a month extra for my broadband service from Sky.

So how exactly did Sky turn me from an Advocate (10/10) to a Detractor (2/10)?  They promoted and then sold me a bundle (tv, broadband, fixed telephone line) and led me to believe that the whole process would be painless and taken care of by Sky.  When it came to delivering on the promise Sky failed.  The most important failure: failing to even acknowledge that Sky had messed up, saying sorry and fixing the issue.

If I look at the failure in detail I see the following:

  1. Failing to tell me that whilst I placed one order I was actually entering into three contracts with three separate Sky businesses and thus would have to deal with three businesses.
  2. Not using my preferred channel (email) to communicate with me even though I had interacted with Sky through the Internet and supplied Sky with my email address.
  3. On the broadband side of the order Sky simply did not do what they promised to do by the date they promised to do it.  The MAC should have been checked when I entered it into the website – so that if there was a problem then it could have been flagged there and then.
  4. No one person within Sky owned the whole order (tv, broadband, telephone line) that I had placed. Thereby forcing me to the be the person who owned the order and took on the role of making sure that the products I ordered were being provisioned.
  5. Unhelpful customer services agents who clearly put the failure to activate the broadband on my shoulders and on the shoulders of Zen Internet and who gave me the impression that they were too busy to help me, they had other more important things to do and gave me the impression that I was a nuisance.
  6. Not acting on my request to cancel the order as Sky had failed to do what it had promised. Instead telling me that I had signed up for a 12 month contract and to get out of it I had to pay the full amount: not showing any moral standing, no human empathy.
  7. When the Sky broadband was activated I found that some of my computers could not access the Internet because the signal from the Sky router was too weak.  When I reached out to Sky broadband customer services I got the same helpful service: no, you cannot use your old Vigor router Mr Iqbal, you have to use this one, how about moving your computers so that they are closer to the router…….

So how does this story end?  First although Sky have sent me letters and called me to cross sell, I have refused their advances.  Second, I am looking forward to December when I can be free of Sky.

Now lets look at this from a Sky perspective:

  • Sky will earn some £420 for the 12 month contract;
  • Sky has paid for the advertising, for the engineer to come out and install Sky tv, the dish, the Sky set-top box and the Netgear router;
  • So how much profit will Sky make on this contract?

The irony is that the customer acquistions team will be congratulating itself on what a great job it has done: look how many new customers signed up!

Why customer efforts tend not to deliver what the customer wants

Many large organisations have been soaked by the waves of CRM and Customer Experience.  Money has been spent on CRM software, teams have been set up to change processes, call centres have been outsourced or brought back in-house, CRM teams have been set up and some organisations even have Directors and VP’s of Customer Experience.

Yet the divide between what customers expect and what they experience when interacting with large organisations continues to be a large – customers are not satisfied.  Churn rates are high in industries where it is easy for customers to change supplier. And many CRM and Customer Experience team leaders are burnt out and/or have become cynical.

This got me thinking on why it is so hard for organisations to become customer centred.  Then I thought about it differently:  why do must CRM and Customer Experience teams struggle to make a significant impact on the quality of the experience that the customer receives? The answer is quite simple if we use a computer analogy.

The possibilities and limits of a computer system, in the final analysis, are set by the operating system; computers are simply pieces of metal or plastic without the operating system.  That means that we cannot take a software application such as Microsoft Word and make it run on a UNIX operating system – they are simply incompatible.  That is what is just so.  Microsoft Word has been designed to work with the Microsoft family of operating systems e.g. XP, Vista, Windows 7.

Now the funny thing is that I have never come across an instance when someone has attempted to run Microsoft Word on a UNIX platform.  Yet that happens all the time in the world of business.  That is what many organisations are doing when they attempt to impose CRM and Customer Experience programmes into / onto the organisation.

Organisations also have an operating system that primarily consists of strategic objectives, executive mindset, culture (what we consider to be important, how we do things around here), organisational structure (typically functional), business processes and the technology infrastructure.

Many, if not most, organisations are running operating systems that are simply incompatible with CRM and Customer Experience programmes.  These operating sytems are used to talking at the customer not listening to the customer; ‘changing/moulding’ the customer to meet the organisation’s needs not changing the organisation to meet the customer’s needs; treating all customers the same not treating different customers differently; focussing resource on conquesting new customers rather than doing the hard work of building sustainable relationships with existing customers and so forth.

Which is why most CRM and Customer Experience teams and initiatives struggle and many fail to deliver.

Focus your customer efforts on cultivating “share of heart”

Marketers are concerned with conquesting a “share of mind” on the belief that if they stake a position – occupy valuable real estate – in the customers mind then the customer will seek out their brand.

CRM orthodoxy speaks of winning and growing a “share of wallet”.  The objective is to find ways of incentivising the customer to spend more and more with you.  A good example is Tesco – it has branched out into clothing, into electrical goods, into financial services, into mobile telephony and so forth.

If you want to build sustainable competitive advantage on the basis of creating customer loyalty then focus on growing a “share of the customer’s heart”.  The mind can be reasoned with.  Volvo may own the ‘safety’ real estate today and someone may be able to claim that real estate tomorrow.  The heart cannot be reasoned with so lightly.  The heart is much sticker.  The more that you grow a share of heart the more you will cultivate reciprocity – the customer will want to pay you back for the good heartedness that you have shown him.

Allow me to share my personal story with you.  Lets start with Amazon.  I have been doing business with Amazon since the beginning.  My relationship with Amazon was a mental (logical) one – it is easier and cheaper to buy from Amazon so I will continue to buy from Amazon.  Then one Christmas I received a present:  Amazon sent me a letter to let me know that I am a valuable customer and with the letter came a coffee mug.

Amazement and delight. I was simply amazed that Amazon had acknowledged and thanked me for being a customer – no organisation had ever done that before.  By that act alone Amazon had staked a place into my heart. How?  By acknowledging my existence, my contribution, my worth; acknowledgement is a fundamental human need.

Several years later Amazon went on to grow  its share of my heart by treating me well when I needed Amazon to fix a problem.

Two or three years ago I was planning to go on holiday in North Africa and I ordered some travel books.  And I was eager to get them quickly so that I could do the research and reserve flights and accomodation.  Well the books did not arrive when they were due to arrive.  I waited several days and became agitated that Amazon had failed me when I needed them.

I decided to contact Amazon by phone as I wanted to deal with the issue there and then.  By looking at the Amazon website I easily found a telephone number to ring.  When I did ring that number someone answered the call quickly.  At this point I was prepared to do battle with the Amazon rep.  Instead I was greeted by a friendly voice.  The voice asked me what my problem was and actually listened.  The voice empathised with my situation.  The voice told be that the books had been despatched many days ago.  The voice apologised that I had not got the books and the upset that had caused me.

The voice asked me what I wanted.  Amazing – the voice did not tell me what Amazon policy is, it asked me what I wanted.  I said that I needed Amazon to get the books to me the next day or to cancel the order so that I could go and buy them from a physical store that day.  The voice told me that a fresh set of books would be despatched that day by special courier and be with me the next day.   By the time I got off the phone I was relieved and delighted with the humanity of the interaction.  That Amazon employee had grown “share of heart”:  wow, this is an organisation that makes it easy for its customers to contact them and then treats them as human beings, as friends, as family.  In short, I had been treated with respect – a fundamental human need.

The next day, the books arrived exactly as promised – on time and in perfect condition.  That sealed the deal.  At that point Amazon had grown its share of my heart to 100%. How?  Amazon had delivered on a third and incredibly important human need – trust.

Since that day I give Amazon the first bite at the cherry and almost always they get my business even when they are more expensive.  Why?  I trust them.  They have treated me well and it is my turn to reciprocate.  I want them to grow, to be healthy – so that they can continue to treat me and the rest of their customers well.

Now Sky, despite its great marketing, is a completely story.  Through its marketing it had won a “share of my mind”.  So that when I was looking at a pay-tv, broadband and telephone bundle I went with Sky.  Then Sky went on to do the opposite of Amazon.  That is a story that I will save for another post.

Most of what passes of as CRM is not CRM

CRM as practiced is not CRM.

CRM is about taking the seed of the initial enquiry, inital order, intial sale and turning this into a mutually beneficial relationship through hard work.  Work that creates value for the customer AND which allows the supplier to take a share of this value and put it into his revenue, profit margin and profit buckets.  This kind of work is best thought of as applied R&D –  an iterative process that requires investment now to create valuable profit streams over the longer term.

CRM requires considerable interaction and dialogue between the supplier and his customers.  It involves closing the physical and emotional distance between the company and the customers.  This is best done by allowing these customers voice  on products, marketing communications, retail stores, website, customer services, billing etc.  And by seeking out customers and getting them to submit ideas and vote on changes that are being considered by the company – a radical extension of this train of thought is the introduction of prediction markets in which customers are invited to participate.  All the listening has to result in changes that create value for customers.

CRM rewards the customers engagement – interaction and dialogue – by intelligently acting on what has been learned from customers.  Action that leads to changes in the way that the company does business.  Changes that address the needs of customers. Changes that create value for the customer – in some way making the life of the customer better.

Most of what passes for CRM are efforts to make the Marketing, Sales and Customer Services functions more effective and efficient – usually through changes enabled or driven by information technology.    In short, CRM as practiced is often about either operational effectiveness or/and operational efficiency.  And efficient and effective operations  may or may not lead to compelling customer experiences that build customer engagement and customer loyalty.  Often they don’t as optimising the parts often degrades the performance of the whole.  And the customer experiences the whole.  This may explain why customer’s satisfaction, engagement, loyalty towards big businesses continues to be less than great despite the money, time and effort spent on CRM projects and programmes