How To Cause Customer-Centricity By Shaping The Work Context (Part 1 of 3)

The Challenge

Imagine that you are the CEO of InterLodge. You face a big problem: your share price has been falling for some time. You need to do something to deal with the issues of high costs and low profitability. You find that the occupancy rate and the average price point per room are too low. And the surveys suggest that Interlodge’s customer satisfaction levels are well below where they should be.

Over to you. What are you going to do about this? What approach will you take?  What levers will you use to address the issues?

What Did The Top Management Team Do? 

The management team did what most management teams do? It restructured and reengineered. Specifically:

  • It created a shared service initiative to serve groups of hotels by region.  Why? To cut costs and drive up quality.

  • It redefined roles & responsibilities of hotel employees. Why? To improve productivity and focus resources on driving up quality.

  • It rolled out a new computerised yield management system. Why? To improve the occupancy rate.

Did the desired outcomes show up?  No. The authors of Six Simple Rules state:

A year later, none of these changes had produced any of the improvements the management team sought …… The share price continued to slide.

What Did Top Management Do Next?

Top management took a bold step. InterLodge’s management committed, via a public announcement, to doubling its share price within three years.  Why did management do this? Clearly to support-boost the share price and at the same time to energize the hotel employees. Did it work?  The authors say that it had a powerful effect on InterLodge employees.  The opposite of what management intended: terrified rather than energised. Why?

Because these hotel managers were expected to increase occupancy rates, raise the average price point, and improve customer satisfaction whilst working within the parameters set by the centralised yield management system, the shared services offer, the organisational design and staffing levels set by the centre.

So the hotel managers acted on the one measure that they felt they could make an impact on: customer satisfaction levels.  They acted on the hotel receptionists. Why? Because they came to the conclusion that: the hotel receptionists were young and didn’t care about doing a good job; they lacked the right customer handling skills; and they were not selling rooms to travellers who arrived late in the day even when rooms were available.

So what did the hotel management do?  Three things. One, they clarified roles, processes and scorecards. Two, they  put the receptionists through a soft skills training course to improve their communication and guest engagement. Third, they set up an incentive plan to motivate the receptionists to sell more rooms and increase the occupancy rate.

Did it work?  Here’s what the authors of Six Simple Rules say:

Six months later, however, the problems remained. In fact things had gotten worse. The occupancy rate had dropped further. Average price point was down. Customer surveys showed lower levels of satisfaction. Receptionist turnover had risen.

So what did management do next?  It looks like they hired a bunch of smart consultants. What did these smart consultants do.

First, Seek To Understand The Work Context At The Concrete (Lived-Experienced) Level

The consultants sought to understand the work context of the receptionists at InterLodge.  Please note that the work context is not the objective situation. By work context I am pointing at the work-context as experienced-lived.  How does one get to terms with the work context? In this case, the consultant spend a month observing and talking with receptionists at various hotels. What did the consultants uncover?

  1. The most difficult, most unpleasant, part of the job for the receptionists was dealing with angry customers;

  2.  The receptionists had to deal with angry customers on their own – by the time customer’s rang down to complain the maintenance folks had gone home; and

  3.  The maids cleaning the rooms were best placed to spot problems and alert maintenance. Yet, they did not do so due to the silo based performance metrics to which they were held accountable – productivity in cleaning rooms.

What is the insight that eventually hit the consultants?  Here it is in their words:

the goal of the receptionists was not to earn a financial incentive by improving the occupancy rate. No, the goal of the receptionists was to avoid the unpleasantness of dealing with unhappy customers.

How did the receptionists deal with the situation that they found themselves in?

  1. The younger receptionist sought to fix the problem themselves. This meant they found themselves running back and forth between their front desk and the problem rooms.  This behaviour didn’t work for the customers who arrived at the front desk and found nobody there. And so had to wait.

  2. They kept rooms in reserve so that they could placate customers. Why? Because even if the new room wasn’t so much better, angry customers appreciated the receptionist who went out of his/her way to help.

  3. They adjusted the room rate downwards.  The customer harnessed their new found guest engagement skills to negotiate a refund, rebate, or voucher to deal with angry customers.

What Can We Learn From This Understanding of The Work Context?

The authors have something powerful to say and I urge you to listen, really listen:

… the young receptionists were forced to bear the adjustment cost caused by the behaviour of the back-office functions [Housekeeping, Maintenance]. They had little choice in the matter, somehow, they had to deal with the angry customers. The adjustment costs they suffered were simultaneously financial (they didn’t achieve their bonus), emotional (they were blamed by both managers and customers), and professional (at a certain point they would become so burned out that they would quit….).

But customers were also bearing adjustment costs in the form of poor hotel experience. And of course, so were the shareholders in the form of declining returns….

Receptionists could never fully compensate for what the back-office functions [Housekeeping, Maintenance] could have achieved had they been cooperating with each other

Once the management team took time to understand the context of the work in its hotels, it came to realise that the problem was not that the receptionists were badly trained, or had some psychological issue or attitude problem, or needed more incentives. Rather, their behaviours were rational solutions to the problems they faced.

What actions did the InterLodge management take to shift-shape-transform the work context?  And what kind of results showed up?  I will share these with you in the next post.

Customer Centricity: A Sunday Morning Religion?

It occurs to me that customer-centricity has become a religion in many ways. And as such is characterised by a particular philosophy-ideology, rituals and practices. We have many books-articles published on customer-centricity, customer experience, CRM, customer service etc.  We have many gurus expounding their particular philosophy of customer-centricity. We have many consultancies pushing their flavour of customer-centricity and associated paths to customer-centric nirvana. We have the IT industry pushing an array of systems under the customer-centricity and customer experience banners.  And, we have many conferences centred on the topic of customer-centricity in one or more of its flavours.

What difference does all this make when it comes to lived experience – the real world of business?  I say that customer-centricity has become the new game to play: a charade. And in this sense, customer-centricity shows up for me as a Sunday morning religion.  This was brought home to me, recently, when listening to the advice given by an engagement manager to a project manager. It went along the following lines:

“Looks like you have a happy customer. Ring up the customer and ask if he would be willing to give us a 10. If he is willing to give us a 9 or a 10 then send him the NPS survey.”

Am I faulting the engagement manager? Not at all. The engagement manager through his instruction has simply made visible the game that has become the norm under the religion of customer-centricity.  How many Christian’s who turn up on Sunday morning are actually Christians?  By that I mean how many embody-live the principles-values-practices embodied by Jesus Christ?  Please note, I am not attacking Christianity. I find that the same has occurred as regards Islam: rare is the person I encounter who calls himself a muslim and shows up for me as being as such.

I ask you consider, be with, reflect on the following sage speaking by a sage:

The intricate maze of philosophy of different schools claims to clarify matters and reveal the Truth, but in fact they create confusion where no confusion need exist. To understand anything there must needs be the understanding being. Why worry about his bodies, his ahankar, his buddhi, creation, God, Mahatmas, world – the not-Self – at all? Why not remain yourself and be in peace? Take Vedanta, for instance: it speaks of the fifteen pranas, the names and functions of which the student is asked to commit to memory. Will it not be sufficient if he is taught that only one prana does the whole work of maintaining life in the body? Again, the antahkarana is said to think, to desire, to will, to reason, etc. Why all these details? Has anyone seen the antahkarana, or all these pranas? Do they really exist? They are all conceptual divisions invented by teachers of philosophy by their excessive analysis. Where do all these concepts end? Why should confusion be created and then explained away? Fortunate is the man [person] who does not lose himself in the labyrinths of philosophy, but goes straight to the Source from which they all rise.

– Ramana Marashi

I say put aside customer lifetime value. I say put aside share of customer wallet. I say put aside big data. I say put aside data mining and predictive analytics. I say put aside CRM and CRM systems. I say put aside Voice of the Customer and Customer Experience. I say put aside customer loyalty programs….

Now ask yourself some really hard questions and answer truthfully:

  1. am I/we willing to put the needs-concerns-wellbeing of the customer at least on par with our needs-concerns-wellbeing?

  2. am I/we willing to sacrifice revenues and profits (‘bad profits’) that I/we are making from taking advantage of our customers?

  3. am I/we hungry (passionate) about coming up with products-services-solutions-experiences that simplify and enrich the lives of our customers?

Who Are the UK’s 2013 Customer Experience Leaders And What Can We Learn From Them? (Part 2)

This post continues the conversation started in the earlier post which disclosed the UK’s Top 10 Customer Experience brands and provided an analysis of the Top 100 brands by industry.

Nunwood’s Six Pillars of Customer Experience

The folks at Nunwood claim “we have used advanced text analytic techniques to derive and then statistically validate the six most important factors that customers talk about when it comes to great experiences”.  What are these factors?

Personalisation: using individualised attention to drive emotional engagement

Time & Effort: valuing the customers time – minimising the effort and creating frictionless processes

Expectations: managing, meeting and exceeding customer expectations

Integrity: being trustworthy and engendering trust

Resolution: turning a poor customer experience into a great one

Empathy: achieving an understanding of the customer’s circumstances to drive deep rapport

What can we learn about these six pillars of Customer Experience by looking at the Top 10 brands?

In their report Nunwood list the top brands by each of the Customer Experience pillars. So:

  • Amazon sits at the very top for the Personalisation and Time & Effort pillars;
  • Virgin Atlantic is the leader in the Expectations pillar;
  • John Lewis leads when it comes to the Integrity pillar; and
  • QVC leads in both the Resolution and Empathy pillars.

What is not easy to do, from the report, is to see at one glance what each of the Top 10 brands does in terms of these six pillars. So I have taken some time to piece that together for you and here it is:

Top10 CEE Six Pillars Analysis

Coming Next

In the next and last post, I will share with you details of the “brands that have cracked the code” and are making major leaps forward – according to Nunwood. And in particular I will single out one brand that shows up for as being truly innovative in its business model, in customer engagement, in being social and making online community work, in putting its customers truly at the centre of its way of doing business.  I also happen to be a customer of this brand.

Why Stop at Satisfaction When You Can Generate Happiness and Gratitude?

Are you present to the big difference between a satisfied customer and a happy-grateful one?

There is a satisfied customer. There is a happy customer. And there is a happy-grateful customer.  Too often we are not present to these distinctions. You and I can create satisfied customers simply by taking care of the functional aspects of the customer experience. To create a happy and grateful customer requires the human touch that evokes positive, life affirming emotions.  And, I say that the human touch makes all the difference when it comes to repeat business and customer advocacy in a services centred business.  Allow me to share a story with you.

“I like Hussein.  He’s friendly, kind and genuine.”  That is what my daughter said to me, with a big smile on her face, as we were leaving The Daruchini, our local Bangladeshi restaurant in Binfield.   I found myself feeling the same way.  What had turned a usually satisfactory experience, at this restaurant, into a happy memorable experience this time?

How do you create a memorable customer experience? 

On a cold windy rainy day, my daughter and I had turned up at The Daruchini, a Bangladeshi restaurant, to pick up the takeaway meals that my wife had ordered.  Walking up to the bar, a young man greeted us with a smile. We did not know him, yet he seemed to know us.  He confirmed the order and the price with me. Whilst he was doing this his colleague spoke to him in a language that I did not understand.

To my surprise, this young man turned to me and apologised for speaking his native language.  So I asked him what language they were speaking. “Bangladeshi” he told me.  Then he asked me where I came from, originally.  I told him that I came from Pakistani administered Kashmir.  At this point, he turned to my 12 year old daughter and asked her, in a friendly way, if she had ever been there.  My daughter shook her head. I said that I had not been willing to take her there as I considered it too risky. The young man agreed with me and told me that I had made a wise choice.  Right there I felt accepted, acknowledged, validated, understood. I noticed a connection and found myself asking for his name.  He told me his name (Hussein) and I shared my name with him.

Then our takeaway food order arrived. Hussein opened the refrigerator where the drinks are kept. And he asked my daughter if she drank Fanta (fizzy drink).  She smiled and said “Yes.”  Hussein hand her a can of Fanta.  I noticed that I was surprised.  I noticed that I was feeling happy. And I noticed that I felt gratitude toward Hussein for his kindness towards my daughter.  I thanked Hussein and we left the restaurant.

We got into our car and were about to drive off when Hussein caught up with us.  He told us that it was likely that our food order had been mixed up with another food order. So he asked to take the food order away so it could be checked. He apologised for the mix up. And told us that he would be back in a couple of minutes with the correct order.

Shortly, afterwards Hussein was back, walking across the car park in the rain.  He apologised for the mix-up and for keeping us waiting. Then he told us that he had given us an extra dish, free of charge, to make up for keeping us waiting.  Once again, I found myself surprised and feeling happy.  This is when my daughter said “I like Hussein.  He’s friendly, kind and genuine.”

What is the lesson here?

It occurs to me that how Hussein showed up, his attitude and his little acts of kindness, cannot be scripted.  They cannot be turned into process . It occurs to me that your organisation will either create space for these qualities to show up or will suppress them.  With that in mind I have three questions for you:

1. Does your organisation recruit and retain people like Hussein?

2. Does your organisation create a space for your people to be genuinely friendly, responsive, and kind with your customers – to respond to the unique customer situation?

3. Does your organisation call forth the best of your people – their humanity, their ability to connect with your customers?  Or does your organisation suppress the best of your people through rules, scripts, process and fear of breaking the standard rules?

What Is There To Be Loyal To?

It was my birthday recently and during the course of it I got birthday cards.  I want to share one that I got from one of my sons:

To Papa

I wish you a happy birthday. Love you lots and thank you for all the things you have done for me over the years especially taking me back and forward to college.

Thank you for being a great, caring and loving papa.

As I read this card I got present to the “…especially taking me back and forward to college.”  Why is it this matters so much to him?  Why is it that this leaves him feeling cared for and loved?

To make sense of this it is worth pointing out that my son is responsible for getting himself to college and back home.  Most of the time (90%+) this works out great.  And there are times it does not.  There are times that the bus does not turn up on time. He rings me and if I can do so then I drop everything and take him to college. There are times when there is simply is not enough time to get from college to work.  When this is likely to occur he asks me if I would be willing to collect him from college and drop him off at his place of work. And, when I am working from home, I say yes and help him out.  There is the odd occasion he gets up late and asks me to take him to college and I take him to college and start the day 15 minutes later than I had planned.

This got me thinking about business and customer loyalty.  What is it that businesses do to cultivate customer loyalty?  What is it that businesses do beyond ‘business as usual’ to generate goodwill with their customers?  Where do business go the extra mile when it matters to the customer?

I want to share with you with this assertion by Matt Watkinson in his book The Ten Principles Behind Great Customer Experiences:

Customers churn between suppliers to find the best deal, not because we are all extremely price sensitive, but because there is nothing to be loyal to.

Let’s look beyond customers and consider employees and ask the same question.  What is that businesses do to cultivate employee engagement and loyalty?  Where and in what ways do businesses go the extra mile to enrich the lives of their employees? What is it that businesses do to generate goodwill with their employees?

I say let’s not stop here. Let’s look further and consider suppliers and ask the same question.

As I reflect on the question of loyalty and ask what is the equivalent of “…especially taking me back and forward to college.” I find no compelling answers. Yes, there are a handful of businesses that come to mind. And, they are only a handful.