Why culture is the Achilles Heel of your customer experience efforts (Part I)

The future of most customer efforts has already been written: take a look at your culture

I came to see, in my time at IBM, that culture isn’t just one aspect of the game – it is the game.”  Lou Gerstner

Many large companies are playing the Customer game and most of them will fail.  They may succeed in improving marketing campaign ROI and reducing churn through customer analytics.  They may succeed in reducing customer service costs by implementing making it harder for customer to contact the call centres and by replacing people with self-service systems.  Yes, they may win a ‘battle’ here and their.  Nonetheless, at the strategic level (‘war’) they will fail: they will fail to build customer loyalty and reap the rewards of that loyalty.  Why?

Culture.  If you scratch the surface you find the culture within many large established companies is one of “do whatever it takes to make the numbers!”  Why is that?  Because the Tops are judged by only one thing: making the numbers.  In general, Tops do not care about people – not the flesh and blood ’employees’, nor the flesh and blood suppliers/partner, nor the flesh and blood ‘customers’.  Nor do they care about or have an intimate understanding of operations.  How can they?

They are embedded in a structure (‘system’) which views customers as objects to be manipulated and wallets to be emptied; employees are simply resources which inconveniently come in a human form and are costly hence the focus on replacing them with technology; suppliers are also resources and the objective is to pay the lowest price; laws are simply inconvenient hurdles that one can find ways around; and the rightful role of the Tops is generalship (‘strategy’).  In the world of the Tops (business or politics) the only thing that matters is making the ‘numbers’: the end justifies the means.

This grim picture is mostly hidden from view.  It is the elephant in the room that no-one wants to acknowledge as it is too threatening – it conflicts with our espoused words and values.  Yet, occasionally this elephant burst on to the world stage in a dramatic fashion:  in the USA there was Worldcom, Enron, Andersen and recently the financial crisis; and in the UK we had the MPs expenses scandal, the financial crisis and recently the News of the World phone hacking scandal.

When you exit the ‘matrix of customer babble’ you will tend to find that the real agenda and system structure can best be described as “extracting maximum value at the expense of the customer” – to borrow Fred Reicheld’s words.  Large companies and the people within them resort to any manner of tactics to pry open the customer’s wallet and get as much out of it as possible right now in this transaction, in this quarter, in this year – to make the numbers.   You can see it in the marketing dept where marketers are busy devising all kinds of ‘bait and switch’ tactics.  You can also see it in the love of ‘neuromarketing’ using insight into the human mind to manipulate customers to do what we want them to do.  You can see it in the relentless dumbing down and depersonalising of customer service…….

What is usually missing is any genuine interest in the flesh and blood customers (or employees, suppliers and partners).  And this is obvious to many of us customers and that is why we use TripAdvisor or Epinions or turn to our social networks to get at the ‘truth’ rather than the marketing claptrap.

What is often missing is any sense of fair play: honesty and integrity between words and actions.   Who is best placed to know the reality of organisational life?  The employees.  In one large publicly quoted company the Tops forced all the Middles and Bottoms to sign an ethics policy.  The following week I learned that these honorable Tops had devised a way to get around the law by using a Greek smuggler to do the dirty work and thus distance themselves from any risk.  Does that sound remarkably similar to the News of the World where policeman and private detectives were used to the dirty work.

Is my experience unique?  Not according to employee surveys, one survey that springs to mind highlighted the following:

  • 49% of employees (who responded to the survey) do not have “trust and confidence” in their company’s senior management;
  • Only 36% of employees believe that their leaders “act with honesty and integrity”;
  • 76% of employees stated that, during a recent one year period, they have personally illegal or unethical behaviours at their companies.

How can you build any kind of meaningful relationship with customers with a culture like that?  I will examine that question in part II of this post – coming soon.

If you don’t answer this question correctly then your customer efforts are simply putting lipstick on the pig

Yesterday British Banks Gave Up The Fight Against Compensating Their Customers
Yesterday the British Banks (HSBC, Barclays, Lloyds, RBOS…) that ‘own’ the retail banking market gave up, reluctantly, their legal fight against compensating the millions of customers who were ‘mis-sold’ payment protection insurance (PPI): ‘Millions in line for PPI redress’.

The British banks are notorious for delays especially when it comes to handling complaints and refunds.   Today the FSA has instructed these banks to accelerate compensation payments: ‘Financial Services Authority wants banks to speed up PPI payouts’.

Was it ‘mis-selling ‘ or deliberately ‘ripping-off’ customers?
Whilst the newspapers use the term ‘mis-selling’ consumer groups and others describe PPI as a ‘rip-off’ or ‘racket’.  ‘How the PPI scandal unfolded‘  makes it clear that “Britain’s banks have been aggressively selling ‘ineffective and inefficient’ – but highly profitable – payment protection insurance for more than a decade.”

This is what the Citizens Advice Bureau said about PPI:  “Payment protection insurance (PPI) is sold to borrowers with the promise of peace of mind and reassurance that credit or mortgage payments will be covered if their personal and financial circumstances change for the worse.  However, many CAB clients find that they cannot make a successful claim on their policy because of exclusion clauses and administrative barriers to making a claim.  Premiums for PPI policies can add 20 per cent or more to the total amount to be repaid on a loan agreement, thus increasing people’s indebtedness rather than preventing it.”

The one key question that lies at the heart of the customer-centric orientation
If you read widely you will see there are all kinds of views on what it means to be customer-centric and no shared agreement.  As such all kinds of people and companies are claiming to be customer-centric.  If you believe you are customer-centric then I put this question to you:

  • Is it ok for you to make money by taking advantage of your customers trust, ignorance, biases and other cognitive weaknesses?

If it is ok for your and your organisation to take advantage of your customer then you are not and will never be customer-centric.  Why? There are two ways to answer this question.

The blunt answer is that you are self-centred and selfish. Given that, it is simply not possible for you to be other-centred including customer-centred.

The polite answer is that long term relationships are central to a customer-centric orientation and these relationships rest on trust.   Trust, in turn, rests on the three key pillars: honesty, fairness and competence.   As Peppers & Rogers say in Rules to Break & Laws to Follow:

Customers may forgive honest mistakes but will never forgive dishonesty.

This point is articulated rather well by Nils Pratley in the following piece: ‘The moral of this PPI tale: don’t rip off your customers’.

Incidentally, dishonesty literally sucks the heart out of many of your employees: how many people genuinely want to exert the best of themselves in dishonest activities?

If you wish you can stop reading right here.  However, if you have the interest then follow me and lots explore/probe the customer-centric paradigm a little further using the Be-Do-Have framework.

Have: what you want to get out of your ‘relationship’ with the customer
What does top management (‘Tops’) really care about? They care about what they are measured and rewarded on. And what is that? Ultimately it comes down to exceeding analyst expectations on revenue, margins and profits. This and the behaviour that it generates are discussed in this HBR interview with Roger Martin.

Do: the actions that you take to get what you want
Things get a little trickier when we get to the Do part. What do you have to do to get the results that you want? You can make the numbers through a whole array of actions. For example:

  • locking customers into longer contracts for example by moving from 12 to 18 month contracts for mobile phones (e.g. telecoms);
  • take advantage of your customers ignorance and sell them products (e.g. PPI) that are not fit for purpose (e.g. banks);
  • deliberately making it difficult for your customers to work out which product is the best fit for their needs so that they buy the more expensive product (e.g. telecoms);
  • making it difficult for them to stop doing business with you and switch to another supplier (utilities, broadband, financial services, hi-tech..);
  • cutting the investment in customer service by making it more difficult for customers to contact you and if they do then having the call handled by someone in a distant country;
  • ensuring that your products do what they are supposed to do, that they are easy to use and have high resale value (e.g. Honda);
  • making it easy for your customers to do business with you (e.g. Amazon, eBay); and
  • standing for a set of values, practices and products that connect with a specific segment of the population (e.g. Virgin, Apple); and
  • viewing yourself as being in the business of ‘delivering happiness’ (Zappos).

Given the breadth of choice that you have,  limited only by your imagination, how do you decide what is the right course of action?   You may be thinking that brand values might help here. They can if they are lived in values. They are useless if they have been dreamt up for marketing (influence / propaganda) purposes.

The BE domain is the source of all guidance on what courses of action are ruled in and ruled out.  So let’s take a look at that.

BE: existence, stance, character and values
The BE domain is NOT concerned with the personality you put on for show – to seduce the people that you wish to seduce.  Nor is it concerned with what you say or your intentions.

The BE domain IS concerned with your authentic self.  Specifically it deals with the issues of purpose, stance, character and values as an integrated whole.  A different way of looking at this is to examine how you behave when you are under pressure: what are you willing to do or not to do no matter what the personal cost?

At the organisation level you face a fundamental choice.  To BE the kind of organisation that prospers through honest dealing and creating superior value for customers.  Or to BE the kind of organisation that does whatever it takes to make the numbers – treating people (customers, employees, suppliers..) as objects to be manipulated for one’s own benefit.

The default setting, as illustrated by the British banks in relation to PPI,  is that customers are seen as objects to be manipulated for the benefit of the organisation. Where concessions are made to customers it is because of regulatory pressure or because competitors force that move.  In Martin Buber’s view this is the ‘I- It’ orientation.

Are your customer efforts simply an exercise in putting lipstick on a pig?
You and your organization become customer-centric when you refuse to make money by taking advantage of your customers.   That means practicing and living honesty and fairness.  Until you do that all of your Customer experience, customer engagement and loyalty initiatives are simply an exercise on putting lipstick on the pig.  You might reap the rewards now yet sooner or later the pig will show through and you will pay the price.  Let me end by quoting from Peppers & Rogers once more:

If being fair to customers conflicts with your company’s financial goals, then fix your business model or get a new one.

Do you care about your customers? Suzanne from Sky does and that I why I love her!

Background

BSkyB is the dominant pay TV company in the UK and is more commonly known simply as Sky.  Over the recent years Sky has expanded into broadband and fixed line telephony; to use the broadband service you have to get your router from Sky.

Back in December 2009 I signed-up for the triple play (TV, broadband, telephony) with Sky on the basis that this would make my life easier.  After a promising start things went downhill fast and I wrote about that in this post: “How to convert an advocate into a detractor – a personal experience”

By December 2010 I had a much kinder, more understanding, perspective on my Sky experience and I wrote about it in the following post:  “The value of transparency or why I am no longer mad at BSkyB” As a result of this change in attitude, pressure from my children and an attractive retention offer from Sky I decided to continue to be a customer.  And everything was going well until Tuesday 6th April when my broadband router stopped working.

I contact Sky Customer Services and find my competence being questioned

On Tuesday morning I found that I did not have access to the Internet so I went to check the router.  I found that the on/off switch had developed a fault: it only worked if I kept it pushed in with my finger.  So I decided to phone Sky Customer Services to get a replacement router.

Once I found the Customer Service number (no easy task as none of the statements have a contact number on them) and navigated through the IVR, I was greeted by a friendly female voice.  I explained the problem with the existing router and asked for a replacement.

To my surprise the CSA asked if I was sure that the on/off switch was not working.  I found myself feeling offended and replied that I was 40+ years old, knew what I was doing and if I said that the on/off switch was faulty she could take my word for it.  Why did I become offended?  Because it occurred to me that the CSA was questioning my competence.   

Company policy takes precedence over doing right by the customer and cultivating loyalty

Once we agreed that a new router was needed, the CSA told me that it would cost me £28. I questioned why I had to pay this cost given that I could cancel my broadband contract (as the twelve month period had already expired), sign-up as a new customer, pay the same monthly charge, and get the router free of charge.

The CSA’s response was that it was simply Sky policy to make existing customers pay for replacement routers.  And that if I did cancel my contract and signed up as a new customer I would not get the router free of charge.  No matter what I said the CSA did not budge: she simply insisted that it was company policy.  When I asked about the rationale behind the policy, she did not explain.  When I asked her to put me through to the Retentions team she told me that she did not know if one existed. In the end, I agreed to pay the £28 as I felt I had no choice.

Amazon can guarantee next day delivery, Sky can only state that it is likely to take 3 – 5 days

Once I had provided my credit card details, the CSA told me that it would take 3-5 days to get the router to me.  I was astonished:  Amazon can and have got books to me the next day (guaranteed delivery) and Sky can only promise 3 – 5 days! I think I simply said “3-5 days!”.  The CSA responded by telling me that I could track the status of the router via the website.  My response was that I had no interest in tracking the router, I simply needed it delivered asap; allowing me to track the router deflects calls into customer services but it does not help me to get my router on time!

Sky does not keep its first promise which makes me wonder about the second one

I then asked the CSA if it was possible to speak to her manager – not about her but about the Sky policy including the delivery time.  The CSA was helpful. She went to look for her manager, found her to be in a meeting, took down a contact number for me and told me that her manager would ring back between 9:45 and 10:15.  No-one rang back.

How am I feeling at this point?  Truth be told, I am cursing my family for wanting SkyTV and persuading me to continue with Sky; I am cursing myself for my stupidity in continuing to do business with Sky.  And I start thinking about how to bring my dependence on Sky to an end because it is clear to me that Sky does not care about its customers and cannot be counted on to deliver on its promises.  Will Sky deliver the router in the promised 3 – 5 days?

Wednesday 7th April, around 7pm Suzanne from Sky ‘calls into my life’

At around 7pm on Wednesday 7th April I got a call from Sky and found myself speaking with Suzanne.  She asks me how I am and I ask her how she is.  I am pleasantly surprised by her refreshing honesty: she tells me that she is well and will be even better when it is 9pm and she can go home.  Wow, I am speaking to a real human being!  I like her already.

Suzanne then runs through the SkyTV package.  She compliments my choices and asks me what I watch.  I tell her that the SkyTV is mainly for my children and list their favourite shows.  After listening, Suzanne brings the conversation back to me and asks if I watch anything at all.  I tell her and she replies that she likes one of the shows that I like.  I feel comfortable talking with Suzanne – she occurs as genuine and actually interested in me.

Next, Suzanne runs through the services I have and tells me that she can save me £2.50 a month on the broadband if I sign up to another 12 month contract.  I reply that no amount of money would entice me to commit to another 12 months with Sky. I say that whilst SkyTV is great, the rest of Sky particularly the broadband bit is absolutely terrible.  Furthermore, I say that I simply have no confidence in Sky as a brand: I just do not trust Sky to treat me fairly, to look after me as a customer. Then I relay my previous days broadband router replacement experience.

How I fell in love with Suzanne and she changed my mind about Sky

All the while I was talking and sharing my frustration and disappointment, Suzanne listened – she stopped selling and simply listened.  She did not argue with me, try to refute my experience or to change my mind.  She simply said that she understood how I was feeling and could understood why I would not want to do business with Sky.  Then she asked me to hold on for a moment. 

She came back and told me that she was going to refund the £28 I had paid for the router – no strings attached – as a gesture of goodwill. At this point I found myself reluctant to take up her offer as I did not want to ‘owe Sky anything’ – that is how much I loathed Sky!  Yet, I found a moral pressure to grant her request: she had treated me with respect and it was now my turn to reciprocate – so I gave her my credit card details.  Then she surprised me again.

Suzanne asked for my patience explaining that she had asked her manager to do the refund. Why?  Because Suzanne does not do refunds – it is not part of her role and she does not have the authority.  I totally get that Suzanne has gone out of her way to help me!  She did not have to do it, she could simply have wished me well and left it at that when I refused her broadband pitch.  And I am grateful to Suzanne and I tell her that.  I even tell her that she single-handedly (with the help of her understanding manager) has changed my perception and feelings towards Sky.

The lessons

When it comes to delivering a memorable customer experience and cultivating loyalty there is absolutely no substitution for caring for your customers. And caring for customers comes down to employing people like Suzanne (and her manager) and allowing them the leeway to be great – to take the right actions, actions that build gratitude.  Why?  Because gratitude leads to loyalty.

A friendly CSA following the script (as set out in the Quality manual) and adhering company policies is not always enough.  It is necessary to take the customer’s individual circumstances into account. In human affairs fairness and helpfulness are critical needs.  Violate these  rules and you almost guarantee losing the customer.  For example, The first CSA I dealt with did everything by the book and was friendly throughout.  Nonetheless, she left me feeling that she was a prisoner of Sky’s unfriendly customer policies and practices and so she was unable to help me with my problem.

Company policies and practices are some of the biggest obstacles towards delivering memorable customer experiences and cultivating loyalty. Take a good hard look at your policies and practices.  Are they fair?  Do they meet customer needs?  Do they get the balance right between trusting customers and being taken for a ride?  Do they balance the long-term against the short-term focus?  Do they help or hinder your staff from delivering great service and establishing an emotional connection with your customers?

Make sure that your people who interact with customers are in a position to explain each and every single policy that impacts the customer in a way that occurs as reasonable in the customer’s world. For example: why does it take 3 – 5 days to get a broadband router when many companies can do next day delivery?  Or why do Sky customers have to use routers supplied by Sky?  Why can’t I use one of the three routers I have sitting at home?

PS: I have only been able to write and upload this post because I figured out a way of making the existing router work: glue, dice and tape to keep the on/off button pressed in – take a look at the photo below.  Lets hope the replacement router arrives before this solutions gives way!

If you want to improve the customer experience put fairness into the contracting process

Focus on reducing the effort that customers make

A recent HBR article titled Stop Trying To Delight Your Customers the authors argue that delight does not deliver loyalty if companies fail to get the basics right.  They argue that companies should focus on reducing the effort that customers make in doing business with them. 

The importance of the contracting process

Now what can be more basic then making it easy for customer to figure out what they are signing up for?   I’d argue that the contracting process is the start of the relationship and the vendor has a responsibility to make it absolutely clear to the customer what she is signing up for.  And in particular, it is critical that the vendor makes the customer aware of anything that the customer may find an unpleasant surprise after she signs ups.  Why?  Because we dislike unpleasant surprises.  We feel cheated when what we signed up for is not what we think we signed up for.  It erodes trust.  And trust is the foundation of all ongoing relationships.

How are UK companies doing in making contracting fair, easy and transparent?

So it is with interest that I read the following article: Problem contracts cost consumers £3b, OFT says.   Here is paragraph that leaps out at me:

“Common problems included a lower quality of service than expected, firms interpreting contracts to their own advantage, problems accessing a service, and poor customer service.”

The OFT study goes on to say: “The highest instance of problems occurred with telecoms and internet access packages, with 10.3% of consumers surveyed affected.”

Is taking advantage of your customers limited to these two industries? No.  The study says:

“Telecoms and internet access aside, of the 32 sectors investigated by the OFT problem areas included home entertainment, home deliveries, home improvement, travel, mobile phones and in-home services and repair.”

I wonder if all this talk about customer focus is simply talk

How hard is it to make the contracting process easy and fair?  I contend that it easy if you want to do it.  So why are companies not making their contracts fair, easy to read and easy to understand?  Bear in mind that the worst culprits according to the OFT, the telecoms companies, have been on the Customer Experience bandwagon since about 2002.