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

 

When The Market Is Flat No Room For Fat!

In the current economic climate thousands of organisations have had to respond to the challenge of operating with reduced resources. Typically declining revenue increases the pressure on costs if margins are to be maintained or protected. The standard response is to reduce costs but the success of this tactic is of course finite and carries the risk of emasculating the growth potential and inhibiting the service levels of the organisation.

Could there be another way of looking at the situation. One of the truisms in the world of commerce is that  “All organisations have to have cost but no organisation has to have waste”. So should the first response be to search for and eliminate waste rather that cost?

What is waste?. It is a word that has a myriad of dictionary definitions but one which describes well ineffective management is:-

 “To use, consume, spend, or expend thoughtlessly or carelessly – to expend without valuable return”

Experience has shown that in every organisation there is waste, whether at the lowest level of SME when over ordering envelopes through to major public sector investments in poorly specified technology programmes, but it seems that it takes a crisis to bring such actions into sharp focus. Then, when a crisis hits, and everything comes under scrutiny more effective solutions are sought in a frantic scramble to protect results. Often one of these solutions is a focus on the performance of the customer base both in terms of those segments or organisations which currently are the most valuable and those which potentially present the greatest opportunity. The wisdom of such an approach is unarguable.

Losing customers is waste. Some of it is not preventable, typically up to 15% dependent on the sector but most of it can be avoided.  The waste occurs in two main areas, firstly from the loss of revenue from the lost customers but secondly from the sales and development costs plus the organisational energy associated with replacing the customers and their revenue base to a level that simply maintains the status quo.

So why wait for a crisis?

Imagine your revenue will fall by 20% in the present financial year, what effect would such a scenario have on the financial results of the organisation and the service levels provided to customers? Could your organisation find the difference by eliminating waste that exists throughout its operations?  What are the “must have” activities and what are the “nice to have” activities that perhaps do not deliver value? Is there a better answer than simply reducing price? Could the supply chain be more effective?  Is the organisation delivering the right levels of service to its most valuable customer segments or does one size fit all? Also what of your competitors, if they have a similar thought then will your best customers become their best potential opportunities?

One answer is to have the elimination of waste as a key on-going organisational endeavour not just in a TQ/RFT mind-set but to ensure that the optimum possible resource is available to “expend with valuable return” to deliver to the customer and thereby to the organisation. The ethos to drive such an aim was captured by the last school teacher on the now uninhabited Stroma Island in The Pentland Firth, Scotland with her advice to her classes

“Good, Better, Best - Never let it rest

Until Your Good is Better - And your Better’s Best”

Philip Forrest

Seeing Round Corners – Beyond Benchmarking

Someone once said  “ If you walk in the footsteps of others you will never get to the front” and another similar quote about The Husky dogs who pull sledges states that “If you are not the lead dog the view ahead never changes”.  So if benchmarking is an organisation’s principal way of developing service quality performance improvement is it axiomatic that they will never achieve a true leadership position?

A look at the international leaders shows that their innovation and improvement are achieved not by benchmarking but from a leadership desire to be the best at what they do for their customers. That raises a couple of questions - How do they do that....? And what is their driver for using benchmarking, is to check up or to catch up?

Leadership desire can be described as a function of an internal motivation not just to be among the best (in the so called upper quartile) but to actually be the best because it will make a key contribution to the organisation being successful. Substantive to that is the belief that they actually can be the best and that is expressed in the Values of the leadership of the organisation and it is such values that communicate things it takes to be important and drives the way the organisation behaves.

However, belief without some realistic sense of what can be achieved actually can descend easily into the realm of day dreaming but with realistically expected results as a guideline the leading organisations create policies (a means of bringing resources to bear on an issue) that guide the organisation to develop and implement the strategic and tactical activities that their management and staff can implement. The best  to be never comfortable with mediocrity and that is why they look everywhere in their organisations and beyond to examine every dimension of every process to learn, improve  and apply in a process that never stops, is never satisfied and never gives up. They also never use clichés (Service with a smile / Our customers are our greatest asset) unless there is a real delivery structure behind the words.

What role has benchmarking to them? Perhaps it is to do with learning rather that copying? To copy   exactly is difficult as no two organisations are the same but learning how principals and techniques may be applied can be very useful. For instance if an organisation has multiple outlets discovering a process for how they can develop best practice from the observed successful behaviours of their individual outlets rather than from the centre may be a useful lesson to learn. Or seeing how an organisation obsessed with service quality engages its entire supply chain in the endeavour. I recently came across a Turkish drinks company whose relentless pursuance of service excellence throughout every step of their supply chain’s processes had given them huge market and price advantage.

The leading organisations use benchmarking in a way rather similar to the way the scientific community uses peer interaction as a dimension of their research structure to test their theories and process ideas as well as to listen and share thoughts and experiences with others but always in pursuit of advancement or improvement. There is a trend towards the use of Big Data mining techniques to uncover customer preferences, priorities and propensities to purchase.

While understanding WHAT customers really want is always the primary step but knowing HOW best to deliver it now and in the future is the real key to success. How can benchmarking help not only to better understand these key points but also anticipate service expectations in the future? But if  the leaders of an organisation do not have the desire, courage and confidence to create a new service quality paradigm will they implement what they see around the corner?

One key observation is that the most successful service organisation really do understand the value of being the best, know where they stand in the pecking order and are never really satisfied until they are at the top. As an award winning CEO remarked to me recently “If you don’t really and truly believe in the value of customer service then don’t do it, but remember that survival is not compulsory”.

So will others walk in your footsteps or will your view never change?

 

Philip Forrest