Could their Experience Have Been Better?

There are a couple of incidents that have been recently reported  to me that made me ask  the question “What could have been done better”

A group of foreign visiting golfers were playing at The Molle Golf Club in Sweden, the weather had been wet but on the day it could not have been better with a cool bright start turning into a lovely sunny day.

The visitors all hired trolleys which were the new three wheeled push type. The course is spectacular but a little hilly and after a few holes one of the golfers was feeling warm and removed his sweater, which happened to be pale blue cashmere, and placed it in a small basket situated below the push handle.

A couple of holes later in order to get to the next tee it was necessary to push the trolley up a very steep slope, as the golfer did this a large quantity of filthy black liquid came out of the joint in the handle and poured over the sweater leaving it badly marked and stained.

On getting back to the pro shop, the golfer complained and showed them the sweater. The assistant said that

a.     They were aware that the trolley frame was liable to fill with water when it rained and create an unpleasant residue which could spill out

b.     They told the golfer that he should not have put his sweater in the basket

The golfer asked what they proposed to do about the situation.

They advised him they would attempt to wash the sweater. He pointed out that they had to leave after the game to get to their next destination 3 hours away.  The answer was a shrug.

What could they have done better?  If you were in charge of the pro-shop what would you have done?  Is a visitor customer any less important? What were the lost opportunities? Will their action prevent a recurrence?

In another incident a group of eight friends were staying at a country hotel on the East Coast of Suffolk in the UK.  After returning to the hotel from a local visit they were asked if they would like to book a table for dinner. As the restaurant had a good reputation they confirmed they would and were asked what time they would like and they selected 8pm. They arrived at the restaurant to find it almost full with a large group of over 20 behaving in a fairly loud manner with the one waiter and waitress clearly struggling to keep up with their needs.

 It took half an hour before the orders for starters were taken from the group of eight and their whole meal took over three hours to serve as the large group clearly was taking precedence. A couple of very measured complaints to the waiting staff during that period produced no results.

 The following morning on check out the manageress enquired if everything had been satisfactory, she was given the bad news by one of the guests in the form of some carefully structured feedback about the service at dinner. Her response was that she had no idea it had happened, apologised and added she hoped it would not influence their decision about staying with them again. . Nothing more.

There seem to be some process management  and communication opportunities lost here

What could they have done better?  If you were in the hotel owner would you be confident that you would get to know about such incidents?  What were the missed process management and communication opportunities. What could be done to prevent a recurrence?

To conclude another thought.  I have just been reading another book on managing the customer experience and observed that this book, like many of its kind, make a number of references of the kind that say “When you next have to persuade your boss that it is worth investing in customer ……………..then show him this or tell him that”

This seems to imply two things. Firstly that the book is not written for business leaders but is aimed at middle management in order to arm them in their relentless struggle for customer experience improvement in an environment that is hostile to the concept. Secondly that all bosses are unable to read such books themselves and are too stupid and over focused on other priorities to be able to recognise the importance of the role of customers in their organisational success equation.

Could it be that all bosses are that stupid or is that the authors have an unrealistic picture of the world?

Philip Forrest

Loyalty as a Sales Growth Tool

Why is growth necessary for business survival.?

 It is one of the great business truths that it is very difficult, probably impossible, to maintain a business revenues and costs at a constant level. There is always erosion of revenues that is rarely mirrored by a reduction in costs. So standing still is not an option unless oblivion is part of the plan.

The erosion of revenues is caused by a variety of reasons, one of them being the loss of customers or low customer loyalty. I recently came across again a piece of old research about why customers defect from an organisation which, whether absolutely correct or not, brings into focus the hard edged commercial value of loyalty.

- 1%   Die
- 4%   Move Away
- 5%   Friendship Links
- 10%   Competitor Activities
- 12% Product  Dissatisfaction
- 68% Indifferent Service Performance

These can be subdivided generally into two groups .

Uncontrollable Customer Loss and Controllable Customer Loss.

The first 4 factors (20% ) are more or less uncontrollable. Those that die definitely will not buy much in the future and the others are difficult to manage on a strategic basis. This indicates that an organisation with a customer churn of 20% is likely to have to replace 4% of its revenue simply to maintain the status quo. However. if it does not pay attention to the Controllable Factors (80%) then another 16% of its revenue is at risk and at that rate it is not difficult to see how rapidly oblivion could arrive. Yet it is very rare to find an organisation whose sales or growth plan includes an element that addresses the controllable loss issue. The sales focus usually is very heavily on new business, new sales to new customers. Whereas repeat/additional sales to existing customers (loyalty) figures less prominently.  So if the major strategic growth plan abandons the controllable 16%  of revenue that is at risk by not addressing its root cause, poor product and service performance, and sets sales off to replace the whole 20% necessary to get the revenue level required to stand still is this the most sensible approach? 

If the controllable losses could be entirely eliminated the same sales effort and energy would produce 16% revenue growth, or alternatively the sales costs required to maintain the status quo could be reduced. There is of course a cost to resolving the controllable loss issue but that is usually more of an investment in improved product, premises, process and people performance which when done remains a permanent on-going performance improvement and competitive benefit to the organisation likely to yield protection from controllable losses in the future

Depending on the sector in question It is possible to produce simple or very complicated mathematical models to justify an investment  in loyalty as a sensible business strategy to substantially reduce the sales effort required to achieve a given growth objective.

Many markets are still in uncertain economic times so would it be better to resolve the loss of revenue caused by poor service performance and thereby enable the organisation to focus its sales effort on getting the number and kind of customers it needs to achieve it growth objectives  rather than having to chase the need to get as many customers as it can simply to replace lost revenue?

Many organisations manage sales and loyalty within different functions which  raises the question that if growth optimisation is dependent on maximising the combined effect of loyalty and sales are organisations structured in a way that gives them the best opportunity to grow revenue?

Philip Forrest     
 

Signs of Satisfaction!

The “Premises” category is one of the 5 P’s in The International Customer Service Standard that The International Customer Service Institute offers to organisations on a worldwide basis. Within that category is a section regarding signage. I am sometimes asked both how Premises generally affect customer service quality and specifically about the role of signs. Setting aside the need to manage potential liability in a world ever becoming  increasingly litigious from the all-pervading influence of health and safety, the role of signs is to help customers optimise the usefulness of their interface with the organisation. Good signs should communicate to customers to either:-

 Inform,

Direct,

Assist,

Persuade,

Propose,

Clarify or

Confirm

with information that helps them have a satisfactory experience.

Seems simple enough, or is it?

The following examples may, in an amusing way, illustrate that not everyone gets it right every time.

Good Direction?

Stupid but Honest

You Have Been Warned!

Frankly Bizarre

Refreshingly Different

The Last Word In Customer Choice?

The serious question to ask yourself when producing a sign for your customers is whether or not it clearly communicates what you want your customers to know.

So do all the signs in your organisation make sense, if they don’t we would love to see them before you change them.

Philip Forrest

Male of Female - Who Delivers The Best Service Quality?

Over the past year a number of high profile women chief executives in the services sector have been asked or forced to resign on the grounds that the organisations which they lead failed to deliver the necessary standards of service to their customers. Some desk research did not uncover a similar pattern among male CEO’s, although plenty of them have been forced to resign for other reasons particularly in the financial services sector. This raised the question about whether men or women deliver the best service quality and at what level? The most interesting fact to emerge so far is that a straw poll among a relatively small sample of academics and business specialists was mystifyingly inconclusive – “ Why would I ask such a question?” and a search on the internet produced no published work on the topic. Given that the comparison between the relative performance of men and women appears to be debated in most other areas it is curious that this should be a factual vacuum.

So is it an irrelevant issue and is the group of high profile female failures a coincidence or are their other reasons? Could it be that women have had to struggle with all of the other leadership issues, like vision, culture, finance, process, politics etc.to reach the top in a largely male dominated environment that they have taken their eyes off the raison d’etre of their organisations, service quality? Service quality is a leadership issue so has the poor performance of their organisations been simply that their lack of focus did not identify it as a priority and is that a failing that can be solely attributed to being female or not?

And what of other levels of performance?  Do female managers do a better job than their male counterparts in managing service quality? Are there instinctive qualities that they exhibit in managing the customer experience which make them more naturally suited to such roles? In a white paper which I wrote a few years ago based on interviews with highly successful women they felt that they had higher natural levels of empathy when dealing with customers and staff and that factor had been a valuable contributor to their success.

 Are female staff better at delivering higher standards of quality at the operational level? The straw poll I conducted suggested that the answer to that question was highly dependent on the product or service in question and hinted that men probably did better in the more technical product/service areas. From my own experience I have had outstandingly high levels of service from female staff in both the motor industry and telecommunications sector and appallingly bad service from their male counterparts in the same sectors with the converse being the case in financial services.

So is there a gender performance issue here or not?  Circumstantially nobody I have asked, beyond the instinctive emotional response,  has a clear opinion and is quick to identify a range of qualifying factors before giving an answer?

Or is it an area worthy of some professional research which may uncover data that could create significant competitive advantage in some sectors or at some levels of management? If so would such outcomes encounter an implementation barrier by breaching equal opportunity legislation?

Philip Forrest

The Same or Different?

I happened to be in Istanbul during the recent protest events which raised an interesting service quality question.

Are there any parallels to be drawn or transferable skills to be learned from comparing Citizen Service provided by governments and Customer Service provided by private sector organisations?

It is not a simple question, especially in this case where a government was elected democratically with a very clear majority and as in most democracies was voted into power on the back of a manifesto which outlines their “proposition” to their customers, the citizens.  So does that power create responsibility to honour the specific detail of the proposition or does it create the freedom for the government to deliver services in a way that it interprets as best to suits any given situation?

A commercial organisation makes “propositions” to its customers who are able to test the organisation’s ability to deliver on such promises by becoming customers and acquiring the proposed goods and services in exchange for payment, usually in the form of money. If the company fails to deliver its customers have the ability to complain or “protest” and if the protest is unsuccessful then customers can, (unless it is a monopoly) take their custom and their money away from that organisation and go to a competitor.  A company which fails to listen to such protests from a significant proportion of its customers is usually on its way to limited growth at best and failure at worst. Also in the commercial world it is highly unusual for customers to protest as a group, except perhaps in the legal arena of class actions.

In the case of governments, the case is different. Government is by its very nature a monopoly, if a government fails to deliver on its proposition, or embarks on a course of action which was not in its manifesto and is not expected by its citizen customers, then its citizens can complain (and can in some cases even take the government to court, but not everywhere). If the complaints are unheeded, or deliberately ignored then citizen customers can and do join together to complain/protest.

The first rule of managing customer service, (or indeed managing any form of criticism,) is to ask the question “Are they right?”, and of so in which area or combination of areas of service quality management has the failure occurred. Is it Policy, Product/Service, Processes, Premises/Environment or People that have led to the failure? Most professional, successful commercial organisations do listen, do analyse the complaints/ protests and recognise the huge value of using that data as a tool to drive improvement.

In the case of a government there is, at one level,  no commercial imperative to either listen or to act in accordance with the perceptions of its citizen customers, there is no need in fact to do anything at all and no sanction for such inertia other than the ballot box at the next election. Governments of all shapes and persuasions can be very good at ignoring their citizen customers. However because a citizen customer has been ignored does it not follow that they have given up and forgotten the issue? If citizen customers, in an attempt to assuage their frustration, choose to come together to complain in the hope that a group of voices will have a better chance of being heard then that is in most democracies, including Turkey, their right. On another level there is a huge commercial imperative if foreign investment, tourism and other international revenue sources are involved and the way a government manages citizen customer complaints may well influence how those investment/revenue customers perceive and react to the situation.

Is the way a government responds, either by listening and engaging in dialogue to explain/negotiate their point of view or by another, perhaps heavier handed, approach  a measure of how they see their duty of service delivery  to any significant group of citizens?  In the case of Turkey, it appears that any failure on the part of the government is not Product, Process, Premises or even People related it appears more to be a function of Policy failure. The policy supporting the government re-action to the initial complaint was not expected by the citizen customers and appears to have taken them by surprise (and it is well known in service quality management that people can take good news and bad news but they do not like surprises).

In the commercial world research indicates that, failure to resolve a policy issue between organisation and customers results in permanent, unrecoverable loss of the customer. Perhaps that is why so much angst and frustration is generated by such issues.

So in answering the question :

Are there any parallels to be drawn or transferable skills to be  learned from comparing Citizen Service provided by governments and Customer Service provided by private sector organisations?

In the commercial world there are a number of data sources available to inform the scope of service delivery policy, e.g. nature of the complaint, deviation from the customer proposition, volume of complaints, impact on revenue, indication of a pending paradigm shift or a deeper area of dissatisfaction, complaints coming from the key target market - all of which can be tested against a robust management model. Is the stumbling block for governments the way in which the monopoly position bestowed upon them by a major electoral majority creates a situation where, like it or not , all citizen customers are their target market so if relationships are not managed carefully in any key sector  then polarised confrontation could become a potential outcome?

What can governments learn from the commercial world?  Perhaps anticipating, listening and responding to complaints in a way which recognises the gap between the citizen customers’ expectations of their proposition and its delivery might be a good start.  Could establishing an early dialogue, which is a key part of effective customer complaint management, to attenuate the potential for confrontation be helpful?  Would a published complaint resolution process be useful?

Many of the more enlightened governments already recognise the concept of citizen service and it is an interesting observation that those leading this field have the continuous development and improvement of citizen service quality high on their policy agendas.  That is a function of clear leadership and as the most powerful and effective form of leadership is conditional upon the identification of a mutually acceptable destination for all involved perhaps that is a lesson for both sides if disagreement descends into confrontation.

What can a commercial organisation learn from a government response, such as the one in Istanbul?

Probably that driving a policy agenda through regardless of customer reaction is a risky strategy with a high potential for customer dissatisfaction and defection. Also that water cannon and tear gas may not the best customer relationship management tools – companies could try them but they are risky and unlikely to build high levels of trust and loyalty – but this should not be mentioned outside this blog in case the international banks adopt it as an exciting new tactic!!

All members of almost every population are both customers and citizens so should they expect to be treated differently depending upon who is delivering the service?

 

Philip Forrest

Greedy and Disloyal Too

I refer to my previous Blog Nov 12 2012 Sloppy and Greedy Too, discussing the behaviour of the banks. While specific personal experience cannot be an objective driver of general observation a recent personal experience left me believing that in spite of the CEO of Barclays Bank, Antony Jenkins, declaring that there needs to be a radical culture change in their Bank my view is that across the industry these leopards will never change their spots, even at gunpoint. In spite of the amount of media and government investigation into their behaviour towards their customers they continue with the same dangerous mix of arrogance and complacency that could forebode another international financial drama.

So what is it that has triggered my response? I am normally loath to name names in my blogs as, in my view, the general point at issue should be enough to shine a light into the gloomy corners of service failure or point the spot light clearly on the kind of performance that delights the mere mortals that provide the revenue to our suppliers. In this case my disappointment overcomes such reluctance. The Bank in question is SG Hambros a subsidiary or similar of Societe Generale. A bank with whom I have had an account for well over 30 years.  I have remained an undemanding customer throughout that period. I retained a relatively substantial deposit balance with them for many years even when their interest rates were below market levels. When, due to the financial crisis in which it appears SG had a fairly well reported on stage role in the disaster, they stopped paying any interest on deposits and I was thereby forced by dint of common sense and impending poverty to place funds elsewhere, but I did not abandon them, conforming to their minimum account requirements of the time and continuing to make regular deposits with them.

When I telephoned them about a completely unrelated topic I was told I was to receive a letter from them telling me they no longer wanted my business and unless I deposited £250,000 (a quarter of a million!) pounds with them in the next two months my account of 30 years plus would be closed and my loyalty to them so repaid. On the telephone I pointed out that, apart from the fact that not many people have the odd £250k lying about, their bank’s lack of a competitive standing in the deposit account market made their policy disappointing. At this I was told that they, should I place the sum they required with them, would be happy to invest my £250,000 on a six month basis at 0.6%!! A mildly intelligent Orangutan could do better on the banana futures market and even the UK Post Office can show that a clean pair of heels by some margin to that proposition.

After 10 days the letter had not arrived. I rang them to be told it would go out soon(they were currently very busy with courses and visits to London) and then I would have 30 days to close the account. I pointed out that the arrangements I had to make with others also required 30 days. I was told that as the impending closure had been mentioned to me over the telephone they assumed I could go ahead. I pointed out that after thirty years a letter was the very least courtesy I would expect. They would try to email the letter to me within the next week!! I also discovered my account was now moved to the “ Privelege” team. What this clearly means is that I should be grateful for the privilege of being allowed to bank with them.

When the letter did arrive by email it was a delight to enjoy their skilled word craft and the caring way in which the news was communicated to me. I quote “ I wish to advise you that, following a strategic review, we will be closing the above account”

No apologies, thanks for your custom, compensation, help in re-arranging things ideas clearly not on their radar.

So what is the message here? To me primarily, that to people like SG Hambros, customer loyalty is an alien concept, secondly they clearly demonstrate that that the disruption and inconvenience their policy causes to their customers is a matter of supreme irrelevance to them and thirdly, in spite of the fact that their proposition is massively uncompetitive, they believe they are right. 

Sadly it doesn’t astonish me. Bank’s customers for one reason or another do place  a relationship value on those who manage their money, the response of the banks appears to be to conduct themselves in a way that puts that Value At Risk (VAR from another viewpoint).  As a general observation, and with remarkably few exceptions, the banks appear to see the duty of their customers (and governments) is to provide a service environment which meets their needs and not vice versa. In the meantime their leaders sail on unaffected unless deeply unfortunate enough to be forced to resign as a result of getting caught conducting shady or illegal dealings.

In The June 2013 edition of The Marketer (the journal of the Chartered Institute of Marketing) there is an article by Philip Graves on “ Cupboard Love” where he reveals his response to being ”downgraded” by his bank. He finishes by saying “It astonishes me that, 30 years on, some large organisations haven’t learnt how their customers’ brains work. Feel free to recommend and alternative bank in the comments section”. Not an easy thing to do! 

Philip Forrest

 

The Science of Service

The fact that the customer is the sole source of revenue for every organisation arguably moves the management of service quality to the centre of an organisation’s priorities and positions it as the most important management skill of all. It is an area of skill that has become infested by the philosophies of half right prophets (e.g. Recruit for attitude, train for skill; Satisfied staff = satisfied customers) some of which have some value but none of which provide a truly effective management platform.

There are many advocates of service quality that point to fact that commercial success is inextricably linked to service excellence and there are as many measurement techniques for looking at customer satisfaction as there are days in the year but there does not appear to be a general approach where the measurements that examine the role, purpose and value of the customer as the driver of present and future success can be viewed from a strategic management perspective. What can help to move the management of service quality away from its perceived status as more of an art form and position it squarely as a management science that uses proven measures to provide real insight and hard edged decision making data to improve the performance of their sole revenue source? It is difficult to argue that such information would not only be valuable but critically important to the development of the organisation.

In some organisations science is not only accepted it is expected. From medicine, through electronic technology and communications to Formula One motor racing any organisation not applying a scientific approach will not be taken seriously for long and will, by virtue of not delivering to its customers an efficacious proposition, will fail.

A number of different elements are at work in such different organisations. Pure R & D is applied to discover, innovate or design. Testing is used to prove, improve or analyse benefits. Application is used implement and reap the rewards of success. All of this is conducted in a carefully managed and monitored process that only accepts what will work and rejects or reworks that which does not.  As in pure science an hypothesis is tested to reality or destruction by experiment and observation.

Has this approach ever been applied to service quality?  There are organisations that genuinely do place serious emphasis and effort on measurement and the application of results to performance improvement but how many of these use such techniques in a reactive rather than proactive way?

How many organisations look at the service proposition and analyse it from a customer experience standpoint and then develop an hypothesis that very specifically proposes that “If the service proposition was developed to include/exclude “x”then active loyalty would improve by “y” and the bottom line would increase by “z” and then set in train a scientific process using both a live sample and a blind test sample of customers? (“Active Loyalty” is the definition of a customer that has a supplier as their preferred candidate for a given product/service and uses them as first choice for all purchases)

Given that customers who spend regularly are the key source of revenue is that too difficult to consider, especially when contrasted with the amount of “scientific” effort that goes into attracting sales from new customers? If one of the first laws of improving sales performance is to “Fish where the fish are” then at least with existing customers the organisation knows where they are!

Customers use a supplier’s products/services to meet a range of general or specific needs. Do organisations really place enough emphasis on researching with scientific thoroughness their understanding of these needs and the degree to which the service element of the proposition can develop their business?

A couple of brief examples where organisations not normally associated with high service quality propositions have used such understanding to grow their business.

Rational AG a German manufacturing company make specialist cooking equipment for hotels and restaurants. At first glance it could be a traditional manufacturing company. However the reality is that is that the company delves deeply into the needs of every customer, it has the deepest understanding of the locations and limitations of where its equipment will be placed, it understands that because its technology is innovative and different there is a need to develop the skills of its customers’ staff to optimise its benefits and, because it employs many ex chefs in this role, it knows where the pinch points in the production process are likely to occur and have used R & D to address such issues. As Rational AG is  also an international supplier it has learned how its equipment should be used to produce food to suit the needs of different ethnic societies. All of this service quality “science” has helped them to grow their top line exponentially and to be one of the most profitable businesses in Germany. The facts that their equipment is bespoke, quicker, more environmentally friendly, take up less space in a crowded kitchen and cost less to run are treated as secondary in importance to their focus on having a proven understanding of their customer’s needs.

Screwfix Direct is a British company that started life as a purely online supplier of materials primarily to the construction sector. A good, successful business model offering value products with rapid despatch from an effective online only platform. Their delivery standards were and are of the highest quality, with overnight despatch a standard. However a more scientific understanding of their customers’ needs identified that a high number of their trade customers, by virtue of the nature of their business, could not know what they required the following day as many of their product needs would only become apparent in the course of their work so next day delivery could mean the loss of a part of the current working day with the attendant loss of revenue to the tradesman and the knock on of dissatisfaction to their customers. Having scientifically analysed the potential the solution has been to develop the distribution channels by opening “retail” shops where the tradespeople can go to get the products they need instantly. Result, an increase in happy actively loyal customers and greater satisfaction for their customers plus new customers and an interesting interactive effect where they report online is driving up retail sales and retail is driving up online sales.

In pure science an hypothesis is tested to reality or destruction by experiment and observation. In both these cases it was not some soft skills, arty approach which created success but a quantified understanding of their customers’ needs that was used as the foundation of a service development hypothesis which was tested and proven to create higher levels of active loyalty and substantial improvement in commercial results.

Is there an opportunity for a more scientific approach in your service quality proposition?

Philip Forrest