No payoff from good customer service and customer friendly focus?

Is Richard Bove on to something?

When an anomaly comes along and/or someone questions that which is taken for granted by a community we can either ignore it or we can dive into it, grapple with it, and see what we can learn.  This piece by the New York Times about the poor service Richard X. Bove experienced at a Wells Fargo branch caught my attention.  And in particular the following statement

“I’m struck by the fact that the service is so bad, and yet the company is so good,” said Mr. Bove, an analyst with Rochdale Securities. “Whatever it is that drives people to do business with a given bank, in my mind, now has to be rethought.

Lets be clear on this.  Richard Bove has come across unhelpful bank tellers, unexplained monthly fees and fumbled mortgage application.  On the other hand, as a securities analyst, he observes that the bank is doing well financially.  And on that basis he questions the value of banks being good to their customers as opposed to pushing products and managing risk.

I say great, we should keep an open mind and question the taken for granted.  Further, I say that there is no simple relationship between customer service/customer focus and financial performance. What mattered yesterday might not matter today or tomorrow.  What did not matter might be critical in the future.  In any competitive industry, one has to be mindful of competitors and consumer needs/behaviours.

Is it really possible to treat your customers badly and do well financially?

Why might it be possible for a bank to do well financially despite lacking the customer orientation and not delivering good customer service?  The simple answer is that customers keep doing business with the bank – they keep accepting poor service from the tellers, accept/don’t notice unexplained monthly charges and put up with fumbled mortgage applications.  So the question becomes: why do customers stick with their existing banks and not move to other banks?

It is fashionable to peddle the view that many customers will take their business elsewhere if their existing supplier treats them badly.  I am not convinced that this is actually the case for the majority of customers. I say that customer surveys get access to what customers would like to do (switch after a poor experience) as opposed to accessing what customers actually do.  Why the difference? We stick with what is convenient and we accept what works well enough.  Furthermore, we get used to being lied to, being hit with unexplained charges, difficult to use/irritating IVRs, company staff that are clueless ….. And we learn to cope.  For example, we use online banking as opposed to going to the branches.

My experience, UK experience, suggests that many if not most customers are firmly convinced that one bank is pretty much like any other bank. Furthermore, they are convinced that it is a difficult, time consuming, chore to move banks.  Lastly, they are convinced that the process will go wrong and then they will have to expend more time trying to get hold  of unhelpful banks and companies to fix what is gone wrong.  Given this, it is no surprise (to me) that banks have some of the highest ‘customer loyalty’ levels around. I wonder if some of this also applies to the USA.

At this point you are most likely to be thinking that I am in agreement with Richard Bove: that treating customers right simply doesn’t matter and banks should focus on pushing products and managing risk.  Not quite.  To get a rounded perspective we have to deal with competition and time.  Let’s start with competition.

Lets consider the impact of time and competition

Where each player in the industry works to the same theory of business and thus goes about business the same way customers really have no choice.  However, when a new entrant comes along and does things differently then the opportunity for disruption occurs.  Think Amazon.  Hasn’t Amazon fundamentally changed the book buying and reading experience and in doing so attracted and retained hordes of book readers. Has it not thrown the incumbents to the wolves?  Think Apple: how many sleepy/cosy industries has Apple disrupted?

So my key point is that as and when a new entrant shows up in the banking industry and offers a superior value proposition centred on honesty, convenience and customer service in the banking industry it will be interesting to see what happens. In the UK I am watching the progress of Metro Bank with interest.  Also, it will also be interesting to see if Richard Branson and the Virgin Group do anything interesting given that they are looking to buy branches from the existing banks.

Time matters.  The best way for me to make this real is to share the example of Tesco.  For ten years or so Tesco did extremely well financially, it was the company to beat in food retailing in the UK.  That is no longer the case as this piece shows.  What happened?  In the UK Tesco failed to invest in the customer experience.  Specifically, Tesco failed to invest in the stores and in the people that served customers.  Over time the customer experience became poorer and competitors caught up.   Then the recession arrived, customers went to competitors, Tesco lost market share, issued a shock profit warning and the value of the company dropped by £5 billion.

Yet, to get that time matters we do not have to go beyond the financial services industry.  Look the banks made a fortune over the last 30 years.  More and more deregulation delivered more and more revenues and profits. Then the financial services industry as a whole went bust.  Yes, bust.  Time caught up with financial services industry – it just took 30 years for the consequences to catch up with behaviour. And we, through our governments, have socialised the losses.  It is only because the citizens/taxpayers have taken the hit, a big hit, that the banks continue.

Summing up

Wells Fargo may be doing well today because it is reaping the fruits of yesterday and/or sacrificing the future.  Yes, you can always boost short term revenues and profits by milking lazy, confused, gullible and helpless customers.   Put differently, the only way we can know if Wells Fargo can get away with poor service by bank tellers, unexplained monthly charges and fumbled mortgage applications is to see how things play out in the next 10 years or so.  If you are tempted to take your customers for granted then I urge you to reflect on: what Amazon did to the book publishing/selling industry; what Apple has done to numerous industries including music, mobile phones, computing; and how the mighty like Tesco, Nokia, RIM have fallen.

Note: This is my first and last post for August.  I am taking time out and intend/expect to be back in September.  For my part, I wish you well and thank you for taking the time to read what I write and share your views.

eBay: biassed, incompetent, indifferent or all three?

Fairness and a transparent, responsive, timely process for getting justice matter to us

There are a number of situations, events, processes that are guaranteed to generate contempt, anger, rage.  One such situation is when we perceive that we have been punished when we should not have been.  Yet, this anger arising out of our strong sense of justice, is likely to melt away if there is access to an easy to use, impartial, transparent process for dealing with complaints.  Yesterday, the UK consumer affairs tv program singled out the DVLA and  Microsoft (Xbox 360) for their tyrant like behaviour towards their customers.  Fo example Microsoft disconnected customers in mid August. Why?  Microsoft asserted that the customers had violated the terms of usage. When customers complained (including mums and their young children) what did Microsoft Customer Service say?  Something like “We are right, you are wrong. And we never make mistakes.  If you want to carry on playing XBox 360 you have to get a new console!” Does this remind you of the behaviour that Dave Carroll was subjected to by United? Then when Watchdog got involved Microsoft recanted: we made a mistake due to a software fault!  Today, I want to look at eBay and share a more personal story withyou.

eBay: biassed, incompetent, indifferent? – I’d say all three!

Imagine that you trade on eBay, it is the early part of September and you list an item (headphones) for sale.  You describe the details of the item and you set out the price.  Because you do not want to create any problems for anyone including youself  you go further on your listing: you clearly state in a large font size that the headphones will be shipped out by 24th September 2011.  Before you know it people start buying these headphones.  You are on holiday and when you can access the internet you (the seller) remind the buyers that the headphones will not be shipped out until 24th September as you are on holiday. As it happens you get back a little earlier and start posting out the headphones on the 21st September and complete the task by 23rd September – you have to pack and post some 50 packages.  And you have a proof of postage from the local post office to show exactly when and to whom you have posted the headphones.  At this point you might be feel happy as you are shipping the goods out to your customers earlier than you had promised.

Well the story did not have that happy ending because the seller did not take into account the whims of some his customers and the bias of eBay towards buyers.  Around the 21st September some of the buyers started filing complaints against the seller stating that they had not received the headphones.  You, the seller, get on the email and remind the buyers that the listing clearly stated that the headphones would not be shipped out until 24th September.  And that you have now posted the headphones – they are on the way to the buyer.  At this point you might think that everything will work out fine – you are wrong.

Whislt some of your buyers get that that you have kept your word, other buyers are not happy.  And you find yoursef unable to resolve the issue with these buyers.  How can you?  You have shipped out the headphones and you have proof of postage.  The case escalates to eBay and eBay sends you an email to let you know that they have judged in favour of the buyer.  So you appeal.  You ask eBay to look at the listing (and they will see that it clearly states the goods will not be shipped until the 24th Sept) and you spell out that you sent the goods before the 24th.  And you offer to send a copy of the proof of postage.  You might think that eBay would ask for the proof of postage, look at the eBay listing and then rule in your favour.  You would be wrong, instead you get this:

If you take a look at this notice you will find that no rationale is give for why eBay has ruled in favour of the buyer.  There is absolutely no response to your assertion that the listing clearly stated that the headphones would be shipped by the 24th Sept, the buyer bought knowing that, you shipped as promised on the listing and you are happy to send the proof of postage to eBay.  And there is no contact number – there is nobody that you can speak to.

I’d love to share the listing with you so that you can see it for yourself.  Unfortunately, eBay has suspended the sellers account and so no-one can see the listing:

One final piece of the story: you the eBay seller have contacted both eBay and PayPal to understand what is going on, to put your case forward, to provide the documentation.  What is your experience?  The eBay folks tell you that you have to contact PayPal and get this sorted out.  The PayPal folks tell you that you have to contact eBay folks and get this sorted out!  No-one at eBay or PayPal wants to stand up and work with you to sort this out.  And they cannot or will not tell you what rules you have broken!  Just that you must have broken some rules.  Does this remind you of Microsoft’s treatment of its XBox360 customers?

What can we learn?

You cannot count on your customers to read what you have written even if ask them to read it and/or display in large size fonts right there on the screen.  This is one of the issues that plagues the insurance industry, for example, people buy insurance without reading the policies to find out what is and is not covered under what circumstances.

Many customers do live up to their side of the bargain including acknowledging their mistakes (if these are pointed out gently) and apologising.

A small number of customers cannot be reasoned with as they are convinced that they are always right and if something is not working out as they’d like then it has to be your fault.

In the West we live in a world of instant gratification if you are selling online then it is best to assume that the customer is expecting delivery within the next day or so.

If you are a seller then you cannot count on eBay to treat you fairly because eBay can get away with treating you unfairly.  Buyers are more important by the simple fact that if you are not selling then someone else will happily take your place.

Power leads us to dehumanise others.  Which is why the bigger and more powerful the organisation (eBay, DVLA, Microsoft) the more likely it is to treat customers, employees, suppliers etc badly.  I wrote a post on that about a year ago.

A final word

The eBay seller is related to me which is why I know this story so intimately.

If you from eBay or PayPal: I issue you a challenge lets make the facts of the case (publish the listing, the emails, the proof of postge) clear to the world.  And let the world at large judge who is in the right and who is in the wrong.  If you are convinced of your justness then you should have no issue in taking up my challenge.

Bad customer experience: power to the people?

This is a guest post from Karl Indigne – a marketing professional that specialises in services marketing.

We have a choice, we can do something to effect change

Thanks to social media, you and I, can have an impact on bad customer service.  I agree, it can take a while, before things actually change in a structural way. But we have a choice, we don’t have to stay indifferent, we can do something to effect change.  We all know, it is not always the people that “help” us that are the problem. It is more like the procedures of the company and lack of good alternatives. But sometimes, somebody stands up and than it is not just a company that responds, but a society. Youp van’t Hek is a well known Dutch comedian and he almost, accidentally,  initiated a crusade against bad customer service.  The story starts in Holland in October 2010.

T-Mobile angers the wrong person

van’t Hek Junior (“vKJunior”) the son of Youp, has his mobile phone stolen. So he goes out and buys a new phone signing up to a new long term contract with T-Mobile. This new phone breaks and he sends it to be repaired; he was paying an additional monthly insurance to cover these kind of events.  vKJunior does not get his phone back.  So after a few weeks vKJunior rings the T-Mobile call centre to find out when he is likely to get his phone back.  After a long wait (several hours) he learns that T-Mobile couldn’t repair it and they will not replace it nor pay for vKJunior to buy a replacement.   Why?  Because the mobile phone they have on the system is vKJ’s old phone – the one that had been stolen.  He goes to the store (where he bought the phone) and asks for help – they say they cannot help.  He rings the call centre (again)….  At some point the call centre agent tells him to write into the company and make a complaint if he is not happy with the situation.   All of this takes place over a period of several months and is rather messy – I have given you the simple version.

Eventually, the son calls his dad (Youp) and asks for his help.  Youp, who is preparing for a show in Flanders, calls T-Mobile in an angry mood and asks to speak to the manager in charge of the call centre. They call centre agent refuses – the company policy states that they can’t put through angry customers . In a rage, Youp tweets: “The terror of T-Mobile is funny. For every mistake they apologize and they refer you to the customer service. Wait time 4 hours…” Minutes after his tweet he gets a call by a guy from T-Mobile, with a melodious voice, who wants to settle the matter. This manager tells Youp that vKJ (the son) can get a replacement phone, immediately, from the store. The son flies to the store, gets his replacement and thanks his dad.

The T-Mobile voice calls Youp back to ask if everything is ok now. Youp is furious. “Why can’t you treat all of your customers like this? Why is it that I, who happens to be famous, can settle such a matter so quickly”. He keeps on tweeting, gains 5.000 new followers and hits the news – national television and newspapers cover the story. People start complaining about all kinds of bad customer service especially in the areas of telecoms and energy in the Netherlands. And this spreads to Belgium – the country which shares a border, language and culture with The Netherlands.

“Hello, is it me you are looking for?”

In Belgium, Radio 1 (a national Flemish Radio Station), starts a program inviting people to talk about their bad experiences with call centres. Now, two nations are talking about the subject. Why are customers treated that way? Are call centre employees trained to embarrass customers? Why does the sales story seems like a fairytale and the customer service so awful? Shouldn’t advertising have some truth in it?

Some Belgian comedians play a practical joke. They have a large lorry size container dropped in front of the Mobistar (a Belgian Mobile Operator) car park in the early hours of the morning.  Result: the employees arriving for work cannot get into the car park.   On the outside of the container is a contact number -put there deliberately by the comedians. The security officer of Mobistar calls that number to get the container removed.  Call after call the comedians take the calls, invent excuses, stall, give the security guard the run around, hang up on him and so forth.  In total they stall him for 3 hours and 20 minutes.  Every time the security guard rings they put him on hold and play Lionel Ritchie’s”Hello, is it me you’re looking for”.  You can watch the joke being played here (English subtitles!) – it is funny!  By the way, the guard was congratulated because he stayed calm and polite despite the run around he was given call after call.

Eventually, the Belgian Federal Minister urges companies to do something about the matter. He finds it unacceptable that too much time is lost before getting to speak to a real person. In June 2011 the companies with the largest contact centres in Belgium signed up to a charter: to limit the waiting time to 2,5 minutes and to use a minimum service level. It is not a law, it is an intention.

 Conclusions

Consumers have more power than ever before, a complaint can go viral now, but the transition from bad service to good customer service does not happen overnight.

As a marketer it strikes me that it is very hard to break through silos within a company and put the customer experience first.  In the case of Telecom operators, most customers only have a choice between bad and worse. Consumers have long term contracts, companies are organized in a specific way.

Is improving the service at the contact centre level enough? In my opinion, the issue of good service is too focussed on the management of contact centres.  For example, why can’t the mobile operators select the right, best, call plan for me?  The giffgaff example on this blog, shows the advantage of a more holistic approach.  My point is this: the customer experience goes far beyond the contact centre only – it is the whole chain of the service across all touchpoints on the customer journey.

The core of the problem is that call centres are too often considered as a cost. The whole telecom industry is managed by the same mantra. This means that contact centres have to work efficient and should process a number of calls within a specific timeframe, I’m afraid we have to wait for new entrants to the market… or keep shouting it out on social media.

Final words

In his book Delivering Happiness, Tony Shieh, CEO of legendary Zappos, explains that for them logistics management and the call centre are considered as the core competences of the business. The call centre doesn’t use any script. They are trained to make people happy on the phone by helping them, even if that means they have to refer a customer to a competitor. And that message goes viral too.