Red’s Whine 5 – an IT pinch, and a punch

In our last episode, “Red’s Whine 4 – Stuart, coffee and bingo”, we left Red in the car with her family on their way to a well-deserved break. We continue, some time later.

It was the end of the second phase of the Better Business project and the pressure had been intense. Despite the team being cut, the remaining three members had still been expected to complete all of the deliverables, and to the original timescale. Red relished situations like this – her years in customer service had made her a real stress-junkie and she realised that she had been missing that since transferring full-time to this project.

The first phase had largely consisted of conversations with the business; about their internal customers’ needs, what the bank was doing right – and what it was doing wrong. The present phase had been about analysing their stated requirements, using the team’s experience to discern any unexpressed needs and applying their understanding of how the consumers expected the bank to treat them (in a word, fairly).

The major deliverables were a stack of documents – the final, ‘100% optimised’, easy to understand, easy to implement, process design that would be used across all the customer service departments and all contact channels. Allegedly, this would (magically) lead to improved customer satisfaction scores, higher retention rates, and improved lifetime value (and profits!), once the new IT systems were in place.

But who knew when that might be? The in-house development team did not have an unblemished record when it came to delivering to time and to budget! The sign on the Development Manager’s office door perfectly encapsulated their attitude – "Do you *really* want it Friday, or do you want it to work?". The implied threat must be enough to prevent most requests for faster delivery. "Rather like not sending back cold soup in a restaurant for fear of what might happen to it in the kitchen", Red thought.

They confidently predicted a six month project – which they would start just as soon as they had finished all of the other urgent, important corporate projects on which they were already working.
"What could be more simple?" Red had spoken the question out loud, but had not expected an answer from the rather dilapidated stretchy – or was that squashy? – stress ball on the desk in front of her. She was not disappointed, and had to supply her own reply.

"Listen to what the customer is telling you, ask them for additional information, understand their needs and deliver changes to the business that improve their experience. Pure genius!"

The final presentation meeting to Stuart (Head of Retail Banking) had gone really well – to start with. In fact, it went well right up to the moment when Red was summarising the work of the first two phases. The beautifully designed final PowerPoint slide showed the steps – Listen, Ask, Understand, Deliver. Much to her annoyance, Stuart had dared to interrupt her at this point.

"Lord!", he’d said. "Lord?", queried Red (a master of the quick-witted reply). "No, laud. L-A-U-D". He had spelled it out. "It’s an FLA". Humouring him just this once, Red had wearily asked the question that Stuart so obviously wanted her to. "Okay, what’s an FLA?" With a huge, self-satisfied grin on his face, Stuart had chortled "You mean, you don’t know? I thought everyone knew that. It’s a TLA – a three letter acronym – that means four letter acronym. Clever, huh?"

Red walked slowly but purposefully across the room and punched him squarely on the nose. Well, in her mind’s eye she did. In reality, she just muttered under her breath, "How pathetic!" for the very last time.

 

(c) 2008 Respond Group Ltd,  First published in Customer magazine (www.customermagazine.co.uk). Reproduced with permission.

The experiment ends …

Fascinating! I have left it more than 100 days since my last post – deliberately, I hasten to add. I was intrigued to know how long it would be until there were no visitors to the blog.

Well, the numbers have certainly decayed, but still they come! Only a handful on any one day, but still interest there. And the most popular post remains “Is 5 (or 8 or 7) the magic number – and not 1 after all?” As I say, fascinating! There must be statistics or information somewhere that explains the ‘half-life’ of blog postings; if I can find anything I’ll post it here. If you know already, please leave me a comment.

Anyway, normal service will resume momentarily….

A completely cloudy outlook for software vendors?

The present economic climate is causing particular problems for traditional software vendors; indeed all companies that rely on large capital investments by their customers face the same challenge. That is, the lack of funds available to their prospects for investment and the impact on the vendors’ cash-flow as the time between licence sales lengthens.

Don Peppers, CRM ‘guru’ and founder of Peppers & Rogers consulting, argued several years ago that the scarcest business asset was customers, much more so than cash. Whilst it remains true today that finding new customers in most markets is a major concern, the impact of the widespread recession means there are even fewer prospects willing to purchase. But, it also true that the squeeze on available credit means that cash is now also a scare resource.

So, companies are caught in a double bind – a lack of new customers and little or no money to invest in the future of their business. This is exacerbated by the unpredictability of sales and the ‘lumpiness’ of revenues resulting from the nature of charging upfront for perpetual licences.

How should these vendors react to the challenge? One possible approach is to change their business model and include SaaS* in their offerings. This may be difficult or impossible depending on their technology platform, but it does at least offer the promise of dependable, recurring revenues – smoothing cash-flow.

The migration of user applications to the ‘cloud’ has been validated in many peoples’ eyes by the success of SalesForce.com. However, many large corporate vendors like Oracle and SAP have struggled to replicate this with their own software suites – not for the want of trying and millions of dollars invested.

It seems that every conversation I have had recently (with vendors and customers) has included this topic of cloud computing and I wonder if the recession is actually causing a step-change in peoples thinking? Is this the moment that software applications as a ‘utility’ really comes of age?

In fact, is migration to the cloud the only viable strategy for software vendors? More to the point, will this rapidly become the only model that customers will purchase – consigning up-front licence fees, and companies that offer it, to history?

I’d love to know what  you think ….

 

* SaaS in this context taken to mean hosted applications which are offered and charged on a periodic ‘per-user’ or rental basis.

Painting by numbers – to keep customers

Technorati Tags: responsive enterprise,complaints,customer is king

The question of how to justify customer loyalty programs and retention strategies often hinges on some form of ROI – the investment will not be made unless it can be shown, in a business case, that there will be a positive return. There have been many different approaches to this problem and all sorts of different statistics banded about to prove one type of correlation or another.

In truth, the link between delivering great customer experience and enhancing the lifetime value of customers is well established, but it can still be hard to pin it down exactly enough to satisfy the guys in Finance who sign off the projects. When I was at CDC Respond we developed the Complaints Impact Calculator – an online tool to help evaluate the negative impact of poor customer service on customer churn and revenues at risk. This was based on the original work by Bernd Stauss and Wolfgang Seidel in their 2005 book Complaint Management: The Heart of CRM, and validated later by Gartner Group.

Recently, I discovered a website that takes this notion of proving the value with numbers to its logical conclusion – a concept called Customer Math.

What started as a Rs. 9,000 mistake in 1997 by Avinash Narula, turned into the enlightening concept of Customer Math. Customer Math gives mathematical proof that customer satisfaction and retention not only pays for itself but is also very profitable.

Customer Math turned Avinash Narula into a BELIEVER in the concept of “Customer is King.” Customer Math convinced him to tap the enormous power of the customer both as a customer as well as an entrepreneur. His aim here is also to turn you into a BELIEVER by making you a Customer Mathematician so that you will also start tapping the enormous potential of the customer to your advantage.

 

Avinash Narula not only writes on the subject, but has built a community website that enables customers to confront the companies with whom they are dissatisfied in a very unexpected way. It also provides support and knowledge to companies wanting to grasp the nettle and improve their retention, using the same mathematical ideas. Amongst other merchandise, the posters illustrating the ideas make a welcome change from the usual motivational wall decorations! [Although in truth, I am more a fan of the de-motivators from Despair]

 

But my favourite idea on the Customer Math website is definitely the cards – these are just brilliant! The effect of consumers sending one of these to a company that is not fast enough to resolve a complaint is hard to imagine, but I am pretty sure it would result in action being taken. Or what about a concerted campaign of lots of dissatisfied customers sending them in – I am sure the message would be heard. Here is an example.

Direct consumer action backed up by financial impact on the company – fantastic!!

All we need now is an electronic version …

What do you think? Great idea, or too hard for most people?

Red’s Whine 4 – Stuart, coffee and bingo

(c) 2008 Respond Group Ltd,  First published in Customer magazine (www.customermagazine.co.uk). Reproduced with permission.

 

Stuart (head of Retail Banking) had at least had the courage to deliver the bad news personally. It had not been a surprise as projects were being cut in all departments; but all of the Better Business Initiative team had thought their elevation from departmental to corporate project would have protected them. At least the project had not been completely cancelled, only scaled back. And Red remained as a full-time seconded member of the team along with 3 others.

The initial feeling of disappointment had been replaced by excitement; she had decided to treat the whole announcement as good news. One of her original objectives in joining the team was to raise her internal profile and a reduction in team size was a distinct advantage in that respect. And besides, she had been kept on the team – that must mean her work there was valued, mustn’t it?

Red had one major reservation about continuing on the project and his name was Davi Posso – one of the new international team members. Her initially good impression of him had declined and then completely evaporated over the last few weeks. He was a larger than life character whose personality had come to dominate meetings and email conversations alike. The only relief these days was to play meeting bingo as Davi delivered another round of seemingly endless stories of his ‘adventures’. Getting “win fast, win often” on your bingo card was a sure-fire winner as Davi helpfully included this into almost every sentence, whether it made sense or not!

After another exhausting week of meetings and conference calls, Red bumped into Stuart as she got into the lift on her way home. She was leaving for a long weekend break with the family. Conversations with Stuart had become less strained as Red had worked more closely with him, but why was it that he still intimidated her? They exchanged greetings and then stood in embarrassed silence. This was not like Red, she was normally outgoing and gregarious, relishing every opportunity to find out what was going on elsewhere in the bank – but not on this occasion. She noticed a slight tension in the air and that seemed to be holding them back.

Eventually, Stuart asked if she had five minutes to spare and suggested a quick cup of coffee in the nearest “branded coffee experience” (his exact words). She reluctantly agreed – she didn’t really like coffee and anyway, she really wanted to get home. They perched awkwardly on stools and faced each other, “I have wanted to talk to you for some time”, began Stuart. Her heart sank; she knew him well enough to realise this was going to be much more than a five minute chat! Imagine her surprise when he did not launch into a tirade about the project and the constant slipping of dates and deliverables, but instead wanted to know more about the meeting bingo. It seemed that he thought it a brilliant idea to liven up dull meetings. That completely spoiled the whole idea for her. Stuart’s interest was somehow like a teacher trying to take part in lunchtime games – whose only purpose was subversive – a bit distasteful and slightly weird.

The long and tedious commute was made even more arduous by Red wondering if there was something more significant that Stuart had wanted to talk to her about. Arriving home, she was almost glad for the distraction of excitable children and a flustered-looking partner. Loading of the car with all the luggage and paraphernalia needed by a travelling family was something of a challenge but finally they set off for the coast and a well-deserved rest.

Sighing as she settled into her seat, Red felt herself relax for the first time in a very long while, safe in the knowledge that her skills as a navigator wouldn’t be needed for some time. Almost immediately, the children started to squabble. Pulling a small box from the bag of new toys that had been especially purchased for this trip Red shook her head – Travel Bingo! “How pathetic”, she thought, not for the first time.

10 things you should know about customer complaints

Results from three years reading and working in the world of customer complaints management. These are my top 10 ‘must knows’ when designing the customer experiences to remove or eliminate dissatisfaction, in no particular order.

1. More than 50% of people who complain simply want a sincere apology – nothing more;
2. Consumers who complain are, in fact, loyal and not disloyal as many believe;
3. Consumers whose complaint is handled well are 8% more loyal than consumers who never had a problem (source: TARP Worldwide);
4. 10 – 22% of total revenue may be at risk or lost annually as a result of ineffective handling of customer dissatisfaction (source: Complaint Management: The Heart of CRM);
5. The expression ‘satisfied customer’ is a misnomer for ‘indifferent customer’;
6. It is easier to turn a dissatisfied customer into an advocate, than a satisfied one;
7. Consumers want you to fix their issue and fix the problem so that it doesn’t happen to anyone else;
8. Telling customers that you have fixed the root cause of their issue generates phenomenal levels of positive word of mouth advocacy;
9. Ask frontline staff what they think goes wrong. Many times they know the key problems and what needs to be done to fix them. This is much rarer than it should be;
10. “A Complaint is a gift” – no, really and should be treated accordingly!

How did you do? Anything new for you?

How did I do?

Red’s Whine 3 – technology, re-organization and cuts

(c) 2008 Respond Group Ltd,  First published in Customer magazine (www.customermagazine.co.uk)

In  part 1, we met our hero and in part 2 she went to lunch ….

Suddenly remembering the impending project review meeting, Red turned to her PC frantically trying to remember where she had filed the latest plan and status report for the Better Business Initiative. She had long ago mastered the intricately connected set of spreadsheets and home-grown databases that underpinned the customer services operations, but much of the world of computers and IT remained a mystery to her. She understood and enjoyed dealing with people – even angry customers, but computers? Now they were a different species altogether!

Finally, she found the document in a folder called ‘Miscellaneous’. “That was a touch of genius”, she thought; not entirely sure whether she was congratulating herself on finding it, or chiding herself for burying it in obscurity in the first place. Triumphantly, she selected Print and walked over to the printer, wondering whether the malevolent error light would be blinking at her as usual – printing was always a bit of a lottery. “Well, I’ll go to the foot of our stairs!” she exclaimed on finding a neatly stacked pile of paper in the out-tray. It had worked, first time. The warm glow of satisfaction quickly evaporated as Red riffled through the pages to check it was complete. Thirty blank sheets was not a good result after all and she returned to her desk frustrated by her lack of success..

Is 5 (or 8 or 7) the magic number – and not 1 after all?

I thought that one was the magic number, but there seem to be many other candidates for the title.

 

There are many models proposed that seek to describe the broad area of “customer experience”. The Gartner CRM maturity profile has five levels (Aware, Developing, Practicing, Optimizing, Leading – see ) but seems to have been largely superseded by their eight building blocks (see here for an introduction).

Bruce Temkin of Forrester Research also has a five stage maturity model for customer experience (Relationship tracking, interaction monitoring, continuous listening, project infusion, and periodic immersion). He has recently presented at the ‘09 Net Promoter Score conference in San Francisco. Jessica Tsai, writing at destinationCRM.com, gives a very insightful account of that presentation here. Bruce has added some final thoughts on his own Customer Experience Matters blog, describing how the one ultimate question aligns within his model as part of relationship tracking.

I have worked in the world of customer feedback management for the last several years, and have developed a seven level Feedback Maturity Model, that we use as part of understanding an industry/organization/individual’s readiness for certain messaging and information around the voice of the customer as expressed by unsolicited customer feedback – both positive and negative.

The underlying principle is that a critical part of increasing satisfaction, loyalty, advocacy and improving customer experience is listening to customers, analysing the feedback and acting on that feedback to drive learning and change back into the business. This is abbreviated to a simple phrase “reduce and eliminate dissatisfaction”. Hence the seven levels are referred to as RED 1 through RED 7, briefly described below.

RED 1	“Customer Oblivious”	No interest, ignores any and all forms of customer feedback
RED 2	“Customer Tolerant”	Handles complaints Feedback is a nuisance, not welcomed, may misuse CRM app to log and process them
RED 3	“Customer Aware”	Manages complaints. Interactions are handled in a professional manner, possibly by dedicated staff
RED 4	“Customer Oriented”	Manages all forms of feedback. Feedback and complaints can be initiated at any customer touch point and through any channel
RED 5	“Customer Focused”	Uses feedback to learn (tactical and ad-hoc changes). Analytical and transactional systems are interfaced/ integrated and data is shared
RED 6	“Customer Centric”	Systemic use of feedback in continuous learning environment. Knowledge gained from feedback analysis is embedded into evolving policies and tools
RED 7	“Customer Driven”	Automated feedback management, a “sense and respond” approach to maximize performance. Highly automated, zero-latency responsive enterprise.

So, what is the magic number? Fred Reichheld has long promoted one as the answer through Net Promoter Score. Analyst organizations seem to favour five (or eight) and me, I like seven.

I guess you have to make your own mind up! I’d love to know what you think. Where are you on the RED scale? Your organization? Your industry?

For the original inspiration go to http://www.jillscott.com/ and choose 14 from the track list on the left of the page.

Technorati Tags: customer experience,feedback,complaints,Gartner,Forrester,NPS

Context is all

Colin Shaw in the Experience Clinic blog entry called “Banks face Customer backlash due to poor experience” gives us an interesting insight into how the marketing messages being put out by banks jar with the mood of the times. The breakdown of trust between the financial institutions and their customers has suddenly opened up a chasm between them and destroyed much of the goodwill needed to maintain a good customer experience.

I particularly like this example of Colin’s reaction:

RBS – “Make it happen” – “Everyday banking, extraordinary service”

Reaction: Yes, you did make it happen, the financial crisis. Thanks. Please do not remind me. I do not consider that extraordinary service.

Messages and strap-lines that we re crafted in more hopeful and positive times, suddenly seem sour and even distasteful. Why should this be so?

It is often overlooked, but the customer experience starts before any specific interaction or communication takes place. Ed Thompson Gartner Inc. often talks about the “before, during and after” phases of the experience with most firms only focusing on the ‘during’ part. The prevailing state of mind of the consumer is critically important to a successful outcome.

The financial and economic crisis which we are now facing, the current context, has radically changed the mindset. Consumers are, rightly in my opinion, now distrustful of banks and governments – institutions that were thought to be exemplars of probity and trustworthiness.

It only takes a moment to lose someone’s trust, but a very long tome to regain a reputation. I wonder how the organizations such as banks will go about the long process of rebuilding. It will certainly take longer, and be harder, than rebuilding their balance sheets – I wonder which one is getting the most attention in boardrooms?

Farewell to Business As Usual?

As far back as 1999, The Cluetrain Manifesto was putting forward the proposition that the internet would change the way we do business in fundamental ways. The pace of change has been phenomenal, and have left many breathless and out of touch.

I was recently reminded of this book when reading Scoot Anthony’s post on Harvard Business Publishing called The Great Disruption. This is his proposed name for the economic times in which we are currently living and working. Here’s his explanation: 

“Why the Great Disruption? In the Great Depression, demand, output and wages declined across the board. Today’s times are different. It isn’t just that demand is sagging. It’s that change is ripping through markets at unprecedented pace. Competitive advantage that took decades to build disappears seemingly overnight.”

We are told that, as well as surviving the downturn, we are told that we have to prepare our businesses for the new environment we will face once the economy improves again. But, in a time of unprecedented changes in both markets and customer thinking, how can we begin to imagine how the new business landscape will look? 

Perhaps the most important aspect to consider is how the consumers’ behaviour will be different. Although we are in a wide variety of industries and business models, one thing we share in common is that we are all consumers. We have not all suddenly become poor – although I am not trying to ignore the very real and difficult circumstances of those people who have lost their livelihoods – but we have become reluctant to spend.

There has been a breakdown of the trust relationship between citizens and governments and between consumers and businesses. The widely expressed resentment at the taxpayer-funded ‘bailout’ of banks on both sides of the Atlantic exemplifies this. The issue for business is that (re)building trust/brand/reputation (whatever you want to term it) takes a looong time and for individual firms may well take longer than getting back to overall economic growth – leaving them behind, or maybe threatening their continued existence.

Consider also the burgeoning consumer power of online communities and social media. We have said for years that the “customer is king” – and some people have truly meant it! The balance is shifting further and further in the consumers’ favour, perhaps the “customer is intergalactic, all-powerful, emperor” is a better description. This will mean that *every* customer interaction will be critical in driving retention – even more so than today – and deliberate and thoughtful design of customer experiences suddenly becomes a survival technique and not a nice-to-have.

So, is this farewell to Business As Usual as we have understood it? Not just an economic ‘blip’ but a fundamental shift in the marketplace? If so, how will you deal with it?

Technorati Tags: customer experience,emotion,experience context,banks