Santander and Barclays Bank disclose the value of the customer experience

It occurs to me that practical experience can be and often is the best guide to showing the value of theoretical constructs. And practical experience can also act as great tool for making sense of and distinguishing between theoretical constructs like service, customer service, and customer experience.

Santander

I take care of my personal banking needs through Santander.  And I find myself to be a happy customer.  Why?  Because it is easy to get my banking jobs done.  Specifically, it is easy for me to get these banking jobs done online.  It is easy/quick for me to log in, see my accounts, view my transactions, move money around accounts, set-up payments, make payments……  Which is why I cannot remember the last time that I rang Santander’s Customer Services team.  And it is also why I rarely visit/use the Santander branch network.

By getting the online banking customer experience right Santander has assured itself of my continuing business AND in that very process/act  almost cut out the demand that I make on the Santander ‘Customer Services team’ – whether that team is in the call-centres or in the branch network. Put differently, architecting and delivering the right customer experience has allowed Santander to make our relationship sticker and improve the profitability of this relationship.

Barclays Bank

I do my business banking through Barclays.  When I set-up this bank account some 9 months ago,  I opted for an account that allows and encourages me to do almost all of my business banking online.  Why?  Because of the online banking experience I am accustomed to with Santander.  How did things turn out?  I got an unpleasant surprise.  The Barclays online banking experience occurred as fiddly and even tedious compared to my Santander experience.

With Santander I pull out my debit card which I tend to have with me wherever I am and enter the card number into the log-in screen. The next screen comes up with a personal phrase that I have chosen so that I know that I am dealing with the genuine Santander site.  And seeing that is the case I enter two PINs that I have chosen and so can remember easily.  Which means it takes me about 30 seconds to be into my account doing my banking.

To do online banking with Barclays – over the PC – I have to go and find a lever arch file, the debit card, the PinSentry card reader.  That is just the start.  To get into my account I have to: find and type in the account number that is sitting in the lever arch file; enter four digits of the number on the debit card; insert debit card into PinSentry reader; type in a PIN into PinSentry; push the right button (three to choose from); read the security code issued by PinSentry and type that into the website log-in screen.  Guess what tended to happen? Not remember the numbers, making mistakes by entering the wrong numbers, and getting locked out of my account.

As a result of several failures, call then bad experiences, I noticed that I was reluctant to use the online banking service.  It just occurred as too much hassle and prone to going wrong.  So what did I end up doing instead?  I ended up ringing up the Customer Services team. I rang them up when I was trying to make sense of the process including which PIN to type into PinSentry as I had been given several PINs – one for telephone banking, one for online banking, one for the debit card and it was not obvious to me which was which.  I rang them up when I could not get into my account. I rang them up when I had tried to log in successfully several times and got my account blocked.

By not paying attention to the customer experience Barclays ended up creating work for me, making online banking show up as an unpleasant, difficult, tedious process.  Drove up their costs because instead of serving myself effortlessly, like I do with Santander, I ended up calling their Customer Services team. And in the process made me ask myself if I should close down the Barclays account and open one up with Santander.

What exactly did Barclays not pay attention to?  First, they did not pay attention to the joining experience from my perspective.  I got several letters, at different times, from different parts of Barclays when I joined up.  Each of which supplied me with numbers and it was not clear to me when/how those numbers should be used.  I remember thinking why all these PINs?  Second, Barclays did not pay attention to the online banking experience itself.  The job of addressing security risks gets in the way of job of making it easy/quick for customers to do online banking.

Why have I ended up staying with Barclays?  Because their mobile banking app is great.  It provides me with an online banking experience that works just right.  It is easy to download and set-up.  And once it is set-up it takes me no time at all to be into my banking account doing what I need to do; all it takes is for me to enter a five digit code that I have chosen and can easily remember!

What is the learning here?

There is no fixed relationship between Customer Service and Customer Experience.  I draw your attention to the assumption that working on customer service (and the folks that work in the call-centres) is an essential part of improving the customer experience.  Not necessarily. By getting the online customer experience right Santander has made Customer Services (the call-centres) and the branch network disappear from my horizon.

By creating value for me Santander creates value for itself.  In getting the online customer experience right Santander creates value for me – saving me time, effort and money. And at the very same time  and through the very same act, Santander creates value for itself. How? By reducing its cost base thus enhancing its profitability. And by creating a sticker relationship – increasing the level of voluntary lock-in.

By not thinking through the joining process Barclays made the already cumbersome online banking process even harder.  By allowing the job of online security swamp my need to easily/quickly access my account Barclays made it hard for me to access the core service that I had hired Barclays to provide.  By making it harder Barclays forced me to use the more costly Customer Services (call-centre) channel that I did not want to use.  So a poorly designed customer experience drove up costs for me (time and effort) and costs for Barclays (unnecessary calls coming into the call centres).

The Barclays mobile banking app has through necessity forced Barclays to get rid of the complexity.  And in so doing Barclays have come with a banking experience that is just right.  So right that both my wife and I turn to the mobile banking touchpoint to do our banking with Barclays.  And my phone calls to the Barclays customer services team have stopped.

It occurs to me that the smart way of reducing the costs associated with the Customer Service function is to look outside of the Customer Services team.  Where?  At each and every touchpoint associated with the customer becoming aware of, learning about, buying and using the core service.  Why?  It is the failure of these touchpoints to meet the needs/expectations of customers that drive customers to call the Customer Services teams.

Bill Price makes a great point when he says the best service is no service.  Which makes me wonder if the prize, in cost terms, of getting the customer experience right is that the cost of Customer Service is zero because nobody is needed in the call-centres to take calls from customers – there are no calls because all the primary touchpoints work just right, deliver the right customer experience.  What do you think?

A skeptical look at 2012 and best practices

Skeptic does not mean him who doubts, but him who investigates or researches as opposed to him who asserts and thinks that he has found. [Miguel de Unamuno, “Essays and Soliloquies,” 1924]

What shows up for me when I reflect back on 2012?  It occurs to me that most of what is written on all things business – including customer – is driven by the need of people and organisations to sell something: a product, a service, a solution, themselves.   Put differently, it is marketing.  The job of marketing is not ‘truth’ nor ‘usefulness’.  No, the job of marketing is to bypass the mind and pull the heart strings so as to move the human being to act in accordance with the wishes of the marketer.  And as such that which is written – including every post that I write – should be questioned.  More accurately, it should be tested to determine if it is science or merely philosophy masquerading as science.

I say that the area that needs the most urgent and critical examination into that which is merely philosophy masquerading as science is  in the areas of customer theory (CRM, Customer Experience, loyalty) and best practices.   

Why go to the trouble to question, research, investigate and test stuff out for ourselves?  Because there is a world of difference between genuinely useful theory (‘good theory’ the term used by Clayton Christensen) and that which masquerades as useful theory.  What do I mean?  I’ll let Clayton Christensen speak on the matter:

“Consider, for example, the history of mankind’s attempts to fly.  Early researchers observed strong correlations between being able to fly and having feathers and wings.  Stories of men attempting to fly by strapping on wings date back hundreds of years.  They were replicating what they believed allowed birds to soar: wings and feathers. 

Possessing these attributes had a high correlation ….. with the ability to fly, but when humans attempted to follow what they believed were “best practices” of the most successful fliers by strapping on wings, then jumping off cathedrals and flapping hard … they failed.  The mistake was that although feathers and wings were correlated with flying, the would-be-aviators did not understand the fundamental causal mechanism … that enabled certain creatures to fly.  

The real breakthrough in human flight did not come from crafting better wings or using more feathers.  It was brought about by Dutch-Swiss mathematician Daniel Bernouelli and his book Hydrodynamica, a study of fluid mechanics…. he outlined …. a theory that, when applied to flight, explained the concept of lift.  We had gone from correlation (wings and feathers) to causality (lift).  Modern flight can be traced directly back to the development and adoption of this theory.”

I say that most of what is pushed as “best practice” in business – including the areas of CRM, CXP, customer loyalty – is merely anecdote and correlation.  And putting in place these ‘best practices’ and expecting to win the game of business is about as sane as strapping on feathers and wings and expecting to fly! I say that you should adopt/live the best practice of deeply questioning best practices.

If you disagree with me then please share your perspective.  I am particularly interested in anyone who thinks they have found the equivalent of lift (causal mechanism) for business success, for engendering customer loyalty.  Please know that I am open to being proved wrong, to be shown the error of my ways – and I mean that genuinely.  Or as Clayton Christensen puts it:

“But even the breakthrough understanding of the cause of flight still wasn’t enough to make flight perfectly reliable.  When an airplane crashed, researchers then had to ask, “What was it about the circumstances of that particular attempt to fly that led to failure? Wind? Fog? The angle of the aircraft?” Researchers could then define what rules pilots needed to follow in order to succeed in each different circumstance.  That’s a hallmark of good theory: it dispenses its advice in “if-then” statements.”

And finally, I recommend Clayton’s book How Will You Measure Your Life.  It is a great read. And if embraced it will make a contribution to your life, your business.

Skeptical musings on ‘treating different customers differently’ and the expertise of business gurus

You may know that I value skepticism in the sense of questioning the taken for granted.  In this post I question the  central tenet of the customer business.  And I question the insight and expertise of customer gurus and management consultants. Let’s start with the central tenet.

What is the right basis for treating different customers differently?

If there is a central tenet of the whole customer business (CRM, CXM, customer retention & loyalty) then it is this: treat different customers differently.  How does that work in practice?  There are two options: you can treat different customers differently based on their needs or based on their financial value.  Which should take priority?

Imagine that you are in pain doubled up in the waiting room of a hospital emergency room. It is late at night during the new year holidays and there is a shortage of doctors.  So there are some ten people there with you in the waiting room – each of whom is keen to get seen to quickly.  What basis should be used to decide who gets access to the scarce/valuable ‘resource’ (the doctor) next?  Should the basis be first come first served?  Should it be the person who is in most need of urgent attention because his/her life is at risk?  Should it be the person who is willing to pay the highest price – the one that represents the most financial value?  What do you say?

What would the ‘customer guru’ say if he was to act consistently with his business philosophy?  He would say that if the hospital is a business then the people in the waiting room should be divided up (segmented) first by their financial value (to the hospital) and then by their medical needs.  Which means that the person who is going to make the most money for the hospital and who is most in need of urgent attention should be the next one to get to see the doctor.

What actually happened?  I was that person in the waiting room doubled up with pain.  And the lady next to me was in a lot of pain as well.  We were talking and complaining about the shortage of doctors, how slow the process was, how long we had been waiting – over an hour. We both hoped that we would get seen to quickly – ideally next.  Then a mother came in with a young child who was clearly in a lot of pain.   What was our reaction?  Both of us were adamant that the young child had to be seen next and seen immediately; we forgot our pain, we no longer thought about ourselves, our humanity reached out to that young child who was suffering so much!  And I noticed that all the other adults in the waiting room forgot themselves and collectively we gave one big sigh of relief when that young child was taken to see the doctor after a couple of minutes. Clearly, the hospital got this because they were seeing us on the basis of our need – how serious our condition was.  And that  is what allowed us all to bear our pain and go with the system: the system occurred as fair, as just – as one that does justice to human dignity.

I hope that you get what I am getting at here.  If you do not then let me spell it out for you.  What the ‘customer gurus’ espouse contradicts certain ingrained values that go with being human.  Most of us have a sense of ‘right’ and ‘wrong’ including that which contributes to our human dignity and that which takes away from our human dignity.  Visibly treating different customer differently is a minefield because it brings out into the open the question of human dignity.  It occurs to me that only people who are not called to by these values are economists, MBAs, business gurus and management consultants.

Why you should be skeptical about business gurus and management consultants

First and foremost, I say, you should be skeptical of any business guru and every management consultant.  Why?  Because business gurus and management consultancies are in the business of passing of philosophy as science, as scientific management, as truth, even if they are not aware that this is what they are doing.  Put differently, when you take a thorough skeptical look then you find that the business gurus and management consultancies are like the king who was not wearing any clothes – it just took a child to see it and call it.

At his point, I wish to introduce you to Colin Shaw because has written a post that has generated high emotion.  Colin is the CEO of Beyond Philosophy – a customer experience consultancy which  makes a big point about the importance of tapping into the irrational side of customers and says it has a scientific proven method for doing so.  On LinkedIn Colin describes himself as “Author 4 Customer Experience books | Consultant | Customer Retention & Customer Loyalty | Keynote Speaker” 

His latest post hasn’t got the kind of reaction (comments) that he was expecting. I think it is fair to say he shows up as being totally surprised by the reaction as expressed through numerous comments many of which are not supportive of him and his point of view.  Which occurs to me as interesting given that the heart of  all things customer is a good grasp of the human condition.  Colin starts off his latest post (Missed opportunities to identify high value Customers – Virgin Atlantic Case Study)  with the following:

“I fly a lot. I have Diamond status on the Delta airlines loyalty scheme, the highest you can get. I really fly a lot! On my briefcase and all my bags I have the Delta Diamond tags. This is like wearing a beacon that says ‘this guy flies a lot’!

My question is, “When I fly with other airlines, do they ignore this display that says I am a high value Customer and could be one of your best customers?” It seems that my badge has the cloak of invisibility as everyone ignores it. Why?

Back in my past career, when I used to run call centers, I remember saying, “Wouldn’t it be great if we knew how much potential revenue the caller could spend with us”. The reality was if I knew someone could spend $1m dollars I would treat them differently to someone that could only spend $10. Airlines seem to ignore this in the choices they make when designing their Customer Experience. This is a lost opportunity. 

Let me give you five examples from a recent experience with Virgin Atlantic on how they are missing these opportunities:”

What kind of reception did this post receive?  An emotional one!  A human one, that discloses reality as experienced by the ordinary airline customers: the lived experience rather than theory. Allow me to share some of the comments that showed up as particularly interesting:

1. “Welcome to the real world Mr. Shaw!”

2. “is this dude serious?”

3. “Colin…here is part of the issue that people are having with your rant. I also fly quite a bit, but simply not enough to get this kind of status. When I go to the airport, I have to wait in a security line while people with “status” have their own priority line, and the airport decides that having the two lines converge on the same TSA agent is a good idea. This means that people without status feel that they are being held up because you have your fancy Delta tags. Then the boarding begins and they do the same thing…..put lines converging on a door where people with status move to the front and cause others to wait. Then there is me – a frequent flier who is in the airport enough to hate travel, and not enough flights to get the airlines to recognize how unpleasant it is to travel…..A significant part of that unpleasantness is the fact that I have to be put aside by a wave of people like yourself who have that level of status. Think about every other industry where status matters. Credit cards offer status to high value customers, but recipients of the cards do not inconvenience other card holders when they make a purchase, so no resentment exists. The backlash you are feeling is from people who have to witness and be inconvenienced by what we all know you deserve. Virgin should take care of you, but not at the expense of other travelers.

4. “Wait, it gets better. So now (in your clarification) you’re saying that Virgin could buy your loyalty back by putting you in a shorter check-in queue, and giving you a $48 rebate on your excess baggage, and accepting responsibility because you had lost your headphones? So, not only are you arrogant and self-important, you have no brand loyalty – Delta should value their relationship with you so highly that they treat you like a king, but you value YOUR relationship with Delta so little that after years of good service, upgrades, priority check-in, etc. you’d defect to Virgin for $48 and a check-in queue that is 3 minutes shorter. In other words, for you brand loyalty is a one-way street. As one of the previous comments asked, who exactly do you consult for? I bet they’d be interested to know your new views on asymmetric brand loyalty, and on exactly what can be bought for $48 and 3 minutes…… Then, in your next follow-up, you suggest that you should be treated better than other economy class passengers because you travel more often! So now you’re expecting Club Class treatment while flying economy! Amazing! I drive far more than average, should I have a booklet of “get off with speeding fines” vouchers, or my own special lane as a reward for being a frequent driver? With each post your position sounds more and more ridiculous. Please, stop digging, it’s becoming embarrassing.

5.  “Over 700 million a year fly a year. What makes you any different? Are you military flying back and forth from deployments? No I didn’t think so. Those are the only people that deserve to be treated like royalty when flying. Though I’m sure you’ve given up your first class seat multiple times for a military member haven’t you. No, I didn’t think so. Should people that ride the bus to work on a daily basis be treated better than a person who only rides it occasionally? Did you once think why they have to limit carry on size? Maybe they have calculated the capacity of the overhead storage and this allows all customers to be able to store the same amount of carry on luggage. Its ok cause you fly so much everyone else should have to suffer so you can carry your oversize bags. I bet that $48 dollars will make you think twice before trying to carry on a small suit case next time. Then again if your so high value, I’m sure $48 is pennies to you People try to do this all the time, carry on large bags to avoid waiting at the luggage belts. I fly with Virgin anytime I fly home to the UK with no complaints. Then again I don’t expect to have my A#$ kissed everytime I fly. If thats what your looking for, maybe you should be looking at different services. 2 christmas ago I got stuck in London due to blizzard that hit the east coast of the U.S. While other airlines had their customers sleeping on air port floors, Virgin paid in advance for hotel for 3 nights and even paid 75% of my expenses. Its funny you pick Virgin to bash on when customer service is so terrible and a lot worse in so many other services. Have you tried to call your cable recently or tried making a large purchase at Best Buy during the holiday season? Try bashing them for not bowing down before you go after airlines.”

6. “”Try replacing the word airline with wife/husband/partner. I used to take her out to nice restaurants, go on romantic holidays, buy her presents. Then I left her for someone closer to work. The other week I thought I’d pop round to see her. With my new kids. Showed her pictures of us on holiday. And then (and this makes me really angry), she says she’s moved on!!”

7. “You seem to be a very important man. How disconnected from real life you must be…”

And finally

I say that if you want to excel at the game of Customer then cultivate the human. My experience is that to excel at the Customer game one has to have an intuitive feel for the human in the human being.  How do you do that?  By putting yourself into real, commonplace, human situations and being present to what shows up for you.  By reading the right kind of literature – that means avoiding business and management books!

I say be skeptical about any advice coming from Tops, business gurus, management consultants, MBAs and economists. Why? They are disconnected from real life – the real world experienced by most of humanity, most of your customers.  And, like all philosophers they fall so in love with their philosophy that he forget that it is just philosophy – at best a partial view of reality. I really do believe that Colin Shaw thinks that he is not doing philosophy and that is why he has called his business Beyond Philosophy.

Please note, I have only used Colin Shaw and Beyond Philosophy as an example to illustrate a point simply because this landed on my lap at the right time.  Recently, there was the much publicised demise of The Monitor Group a strategic consultancy established by the king of strategy (Michael Porter).  Which is my way of saying that I am talking about academics, consultants, gurus and not any one single person or organisation.

What do you say?