consumerdirections www.socap.org.au
The official publication of the Society of Consumer Affairs Professionals Australia
March 2010
Special features: Government, public sector and utilities
page 6 Member profile: Ergon Energy’s Helen Poropat
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page 8 Towards a seamless national economy
page 15 New column: CHOICE CEO Nick Stace
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CONTENTS
SOCAP Australia Executive President: Andrew Taylor, CaseWork Vice-President: Jane Pires, Suncorp Vice-President: David Schomburgk, Dept. for Families & Communities (SA)
3
President’s message: Andrew Taylor
Treasurer: Charlie Trkulja, National Australia Bank
3
Executive officer’s message: Amanda Blesing
4
News
Public Officer & Company Secretary: Ralph Simpfendorfer, TMI Australia
6
Member profile: Helen Poropat
Board Members
7
L egislation update: Trade measurement goes national
Andrew Gavrielatos, NSW Office of Fair Trading
Government and Public Sector Special 7
8 7
11
T owards a seamless national economy: Freya Purnell
10 When you can’t say goodbye: Freya Purnell
Utilities Special 11 E ssential services see complaints rise: Elizabeth Kelleher 12 Electricity sector goes green: Elizabeth Kelleher 14 A CCC – Trade practice breaches will be costly: Graeme Samuel 15 CHOICE – The agenda for 2010: Nick Stace 19
14
16 R esearch: Resilience leads consumer trends for 2010 ocial media seminar: Can you afford to 17 S ignore the conversation? 18 T raining and supporting members: Amanda Blesing ook review – Exploiting chaos: 150 ways to 19 B spark innovation during times of change: Karen Andrews
SOCAP AUSTRALIA WORKING PARTIES 2009/2010 Communication Working Party Glen Wells, Travel Compensation Fund (convenor), Sally Trevena, FaHCSIA, Andrew Gavrielatos, NSW Fair Trading, Karen Andrews, Nestle (non-director), Freya Purnell, Editor, Consumer Directions Events & Education Working Party Jane Pires, Suncorp, Marilyn Grant, Johnson & Johnson (convenor), Leigh Thomas, Listening Post, Peter Gillson, SFI International 20th Anniversary SOCAP Symposium Working Party Brendan French, Commonwealth Bank, Marilyn Grant, Johnson & Johnson, Lindy Kerr, Australian Taxation Office (non-director), Juliette Mansted, AAMI (non-director), Charlie Trkulja, NAB, Jane Pires, Suncorp (convenor), Bill Dee (non-director), Andrew Gavrielatos, NSW Fair Trading Thought Leadership Working Party Sally Trevena, FaHCSIA (convenor), Ralph Simpfendorfer, TMI, Andrew Taylor, CaseWork, Brendan French, Commonwealth Bank, Leigh Thomas, Listening Post, Rhonda Day, ANZ Note: All working parties also include a SOCAP staff member.
Marilyn Grant, Johnson & Johnson Peter Gillson, SFI International Brendan French, Commonwealth Bank Leigh Thomas, Listening Post Sally Trevena, FaHCSIA Glen Wells, Travel Compensation Fund
Patron Professor Allan Fels AO
SOCAP Australia Secretariat Executive Officer: Amanda Blesing T: 03 8687 9061 E: ablesing@socap.org.au Projects and Events Coordinator: Eliza Smith T: 03 8687 9062 E: esmith@socap.org.au SOCAP Australia Suite 205, 757 Bourke St Docklands VIC 3008 T: 03 8687 9060 F: 03 8687 9063 socap@socap.org.au www.socap.org.au Consumer Directions is produced by FlapJack Custom Publishing on behalf of SOCAP Australia. Editor: Freya Purnell T: 02 9929 5465 M: 0412 602 579 E: editor@socap.org.au Designer: Justin Knights Disclaimer: Views and opinions reported in Consumer Directions are not necessarily those of SOCAP Australia. Whilst all care is taken for accuracy, no responsibility is taken by SOCAP Australia. Consumer Directions is printed on recycled paper. ©Copyright 2010 SOCAP Australia
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FROM THE PRESIDENT Andrew Taylor
I have heard SOCAP referred to as “they” or “you”, as though SOCAP was an entity independent of its members. SOCAP is us. SOCAP is owned, equally by its members. People like you and me. At the time of writing there are 350 of us. SOCAP was set up by the founders to help people like us to achieve some common goals. I’ve listed the ‘Purposes of SOCAP’ below, as they appear in the ‘Rules of SOCAP’, which is our official constitution. Re-reading these purposes, I am struck by how successful SOCAP has been. The objectives are as fresh and relevant today as they were when they were written 20 or so years ago. I wonder if the founders are surprised at the longevity of SOCAP, and the consistency of purpose (perhaps we should ask them this at the Symposium dinner in August?). This naturally leads to a reflection on how well SOCAP fulfils its purposes. I believe we achieve our purposes to some degree, but it’s also fair to say that for each point on the list, we could do much better. Imagine if SOCAP was scoring twice as well for each objective listed. In particular, imagine how that would assist you as an individual in achieving your own objectives. In my five years serving SOCAP as a Board member, I have contributed to the organisation’s endeavours to improve effectiveness. We’ve done better in some areas than in others. I’m happy to say that in the last year we’ve made a big difference to SOCAP’s operations, as we now have an energised, professional team at the SOCAP office, making tangible improvements every day (thanks, Amanda and Eliza!). Hopefully you’re noticing the changes already. However, I can say that over time the most consistent constraint on SOCAP’s performance has been the fact that only a small number of members actively contribute at any
given time. In my experience, there always seems to be an inner SOCAP (the Board and Working Parties), and an outer SOCAP, being members who pay their dues and attend the Symposium and other events but have little or no other involvement. If you consider yourself in the ‘outer’ group, SOCAP encourages you to contribute more. If you’ve got ideas about how SOCAP can better achieve its purposes, please jump on board (maybe it’s literally time you thought about joining the Continued on page 4
The purposes of SOCAP are to: • foster and maintain the integrity of business when dealing with customers; • provide a support network for consumer relations and customer affairs practitioners; • enable individual consumer affairs professionals to assist in improving the policies, products and services offered by their company or organisation; • enhance the responsiveness of corporations and government to concerns raised by consumers; • provide a communication/education forum for practitioners in the consumer affairs field; • encourage and promote understanding between business, government and consumers; • assist to educate consumers by improving relations between business and consumers; and • provide for professional development of practitioners in the consumer affairs field by means of seminars, workshops, conferences, newsletters, panel discussions and other forms of continuing education.
FROM THE EXECUTIVE OFFICER Amanda Blesing
In late 2009 I attended a Thought Leader conference and came away totally inspired. Not only was I inspired by the great array of talented people out there with interesting information to share, but I was also inspired by the variety of ways there are to share information. In this instance, it was technology – affordable, flexible, fun technological solutions that make learning easier and more engaging. At the conference I learned about Twitter and saw how Twitter back channels can work to bring real-time commentary to your conference. I discovered a pen that both writes and records presentations and allows you the ability to share the written and audio file with others. I also came across Prezi, which is a great new presentation tool for telling stories without slides. And finally, I found a tool to record seminars more easily.
Not only was I inspired, but I have now accepted the challenge of producing a Prezi and of producing webinars of SOCAP breakfast briefings so that those who are not able to attend a particular event, might still benefit via a technological solution in their own time. We have experimented with new technology at our Social Media and Complaint Handling breakfast in Melbourne (watch out for an email alerting you) and I look forward to your feedback. Email me via socap@socap.org.au or call me in the office, I am keen to know your thoughts. Technology is progressing in leaps and bounds and there are amazing and affordable tools available for us all to help us do our jobs better. You just have to be openminded and willing to learn. And this is from a person who never actually learned how to program her VCR! “Live long and prosper!” www.socap.org.au
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NEWS
Consumer rage attack injures 19
been slow to adapt to the low-cost carrier business model and misunderstandings about service levels and ticketing conditions have resulted in increased instances of customer dissatisfaction. However, the white paper notes that in addition to underlying service issues, a significant number of consumer complaints about airlines relate to the complaints handling process itself. “The Government sees a need to ensure airlines make reasonable efforts to engage with the complaints of their customers and make genuine efforts to resolve these issues without recourse to formal legal processes,” the paper said. The white paper recommends the development of corporate charters and setting benchmark standards on the handling of consumer complaints. The charters should guarantee local-call telephone assistance, set out minimum standards in regards to the time it takes to acknowledge and respond to a complaint, and clearly specify instances in which customers should be offered full refunds, such as cases of ‘denied boarding’ due to deliberate overbooking or significant schedule alterations. “The Government also expects the industry to establish a mechanism for consumers to have unresolved complaints examined by a third party, such as an industry ombudsman, independent of the airline involved,” the paper said. The Government has indicated it will monitor the industry’s efforts to better handle consumer complaints in 2010 and will consider a more comprehensive approach if necessary.
Federal Government calls on airlines to improve complaints handling
Customer care to drive ICT market growth
Continued from page 3
members. We are also considering whether our corporate membership offering should be restructured along the line of the changes made in the US, to better meet the needs of today’s large corporations. These are issues that involve you, so speak up and make your contribution to the debate. So please, if you catch yourself talking about “they” in the context of SOCAP Australia, instead pause and consider instead what “we” can do and how you can contribute to our common purpose.
A 45-year old man has been charged with nine counts of attempted murder after allegedly firebombing a Darwin insurance office in an apparent act of consumer rage. According to police, the man entered the Territory Insurance Office (TIO) Insurance and Banking office in Darwin’s CBD pushing a shopping trolley loaded with fuel and fireworks. The man is accused of lighting the cans, causing an explosion and a rapid fire that injured 19 people. Police say that he then drove to the Darwin Police Station and handed himself in. After being questioned by police, the man was charged with arson, intent to cause explosion, reckless endangerment of life and attempted murder. “While there are a number of burn victims and other patients still in hospital for treatment, it is only luck that has seen no fatalities as a result of this very serious incident,” said Commander Colleen Gwynne, who headed the police investigation into the incident. The accused is a former security guard who worked at a Darwin pub until October 2007 when he was injured on the job. It is understood that he made several threats against TIO in relation to his resulting workers’ compensation payout. The man allegedly blamed the insurer for loss of earnings that forced him to leave his home in Humpty Doo and move into a shipping container. TIO had reported the threats to local police and put in place appropriate in-house security protocols.
The Federal Government is pushing for airlines to improve their response to dissatisfied customers following a surge in complaints to state consumer affairs departments. According to the recent Aviation White Paper, released by the Department of Infrastructure, Transport, Regional Development and Local Government, some consumers have
SOCAP Board). Start by making your views known to Amanda or to a member of the Board, or by contacting Freya Purnell about contributing to Consumer Directions. It’s a great time to get more involved, as SOCAP is growing and there’s a thirst for new ideas and new blood. This year, we are setting aside time at each Board meeting to discuss some of the recurring questions about SOCAP’s strategy, concerning how we are structured as an organisation and the services we offer to members. For example, one of these recurring questions is whether SOCAP should change its focus in order to attract a broader group of members. I can tell you that the Board has resolved, for the foreseeable future, not to broaden the member base beyond those who work in customer service improvement, consumer issues from a company perspective and complaints handling, because we feel it is not in the interests of the existing member base. Other questions are on the agenda, such as whether SOCAP Australia should introduce an awards structure or whether we should offer professional accreditation for
Market intelligence firm IDC predicts that investment in customer care and client retention will drive growth in the Asia Pacific information and communications technology (ICT) market in 2010. IDC expects spending in the Asia Pacific region to reach US$184 billion in 2010 – an estimated 7.7 per cent increase on 2009 levels. “The net result of the economic slowdown has been an
SOCAP Australia welcomes these new members: Brenton Philp, Australian Competition and Consumer Commission (ACCC) Mark Meintjes, CHOICE Dannielle Abbou-Takka, NRMA Gary Bayly, NRMA Kelly Gray, NRMA Emily Campbell, Wyeth
2010Sym
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NEWS
overarching change in how and why companies make new technology investments,” said Simon Piff, head of the IDC Asia Pacific Predictions Committee for 2010. “Most notably, the key areas of focus going forward will be in customer care, client retention and wallet share growth-enabling technologies. Additionally, IDC foresees projects that generate immediate ROI and tangible improvements in managerial and operational efficiencies will continue to be the projects that garner quick corporate ‘buy-in’.”
US regulator calls for independent consumer agency
Following widespread criticism of the way US federal agencies handled their consumer protection responsibilities during the financial crisis, banking regulator Sheila Bair has voiced her support for an independent agency to protect borrowers from predatory lenders, The Huffington Post has reported. Bair, who is chairman of the Federal Deposit Insurance Corp. (FDIC), made a statement through her spokesperson which said: “Consumer abuses were one of the root causes of the financial crisis and regulatory reform legislation should
address this problem. The FDIC has been on the record that the ideal way to do this is through an independent agency with the power to write rules for the banks and non-banks alike.” Consumer advocates support the concept of such an agency, as it would be the first time a US federal agency was charged with the sole purpose of protecting borrowers, and it would have a better chance of ending abusive lending practices, a responsibility currently shared – arguably ineffectively – by seven agencies, according to The Huffington Post. However, the formation of this agency is opposed by Bair’s fellow regulators and by the banking industry, which objects on the basis of increased costs. The US House of Representatives passed a bill in December calling for the creation of a Consumer Financial Protection Agency. However “recently-leaked proposals from the Senate Banking Committee would give other federal regulators veto power over the proposed agency’s rulemaking authority and limit its enforcement powers, crippling moves that could render the new agency virtually powerless”, the Post reported.
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MEMBER PROFILE
Meet Helen Poropat As dispute resolution adviser at Ergon Energy, Helen Poropat represents the company in consumer-driven decisionmaking mechanisms, such as consumer tribunals, mediation, facilitation and adjudication. Poropat also provides specialist advice in regards to corporate social response programs and is actively involved in the identification of service failures and gaps, as well as possible initiatives to support better outcomes for the business and customers. CD: What have you gained through your membership of SOCAP Australia? HP: I’ve been a member of SOCAP Australia since 2001. Over the years I have gained knowledge of the broader consumer professional movement and have been able to glean ideas and different options for improving service. The symposiums have been a good source of information and the range of people gives you lots of opportunities to network, understand the wider organisational and consumer issues, look for synergies within other organisations and find out what they are doing to improve the customer service experience. The symposiums have had presenters and participants that have demonstrated success in looking outside the square and finding innovative ways to work with increasing regulatory requirements and managing to thrive in cost-driven industries. One significant thing that I have gained from these types of forums is the opportunity to share experiences, feel the pain with others on their journey, and know that you are not alone and can seek support for your ideas and concerns and exchange information and resources that can assist. CD: What are some of the key trends you’re seeing in the utilities sector? HP: Increasing regulatory pressures, increasing budget constraints and an increasing number of customers who are seeking restitution all seem to be key trends. I’ve also noticed more consumer cynicism and rage, and greater levels of cynicism from dedicated staff within organisations. CD: What type of challenges will 2010 bring for consumer affairs professionals working in the utilities sector? HP: I think there will be more scrutiny from external stakeholders in government, business and communitydriven organisations that require responses that will drive sustainable outcomes. Customers want to know that
you are not taping up the holes in your service delivery but looking at smarter, adaptive ways of working more efficiently without reducing the quality of your services. I believe we sometimes take for granted the goodwill of customers and do not stop to think that their goodwill is not a bottomless pit. Customers have a growing level of knowledge and sophistication regarding the level of ‘spin’ from organisations and are increasingly seeking avenues to put forward their point of view and also their level of frustration. I think customers are more informed and that we don’t utilise enough the feedback we have from customers through our complaints data, surveys and general interactions. CD: What advice would you give to newcomers to the industry? HP: The utilities industry is complex in terms of the overarching regulatory framework and the expectations of government, regulators, business and general consumers. I think it’s important to talk with people who have been in the industry for a while and access their knowledge and skills in how they have adapted to changes. It’s important to be informed about what has gone before to understand the changes ahead with respect to regulations and consumer behaviour. It provides a perspective where you can better understand the pitfalls in the past, and what has and is driving consumer choice and behaviours. CD: What do you like to do when you’re not working? HP: Since last year I have been undertaking a professional cooking course and have a passion for learning different styles of cooking, and finding and experimenting with new foods. It’s been a pleasure sharing my food and cooking passion with my husband through doing joint cooking classes, as well as visiting food markets and experimenting with different ingredients. I also love to garden, do a lot of reading and listen to classical music.
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Legislation update
Trade measurement goes national From 1 July 2010, a new national system of trade measurement will commence under the administration and regulatory oversight of the National Measurement Institute. By Elizabeth Kelleher. Throughout the 1990s, Australian states and territories enacted Uniform Trade Measurement Legislation (UTML) which established model regulations with respect to measuring instruments for trade, prepackaged articles and weighbridges. However, while the states and territories had common trade measurement legislation, they interpreted and administered this legislation individually and this resulted in an inconsistent pattern of regulation. In April 2007, the Council of Australian Governments (COAG) decided that a national system of trade measurement regulation should be introduced and the National Measurement Institute (NMI) was charged with the task of consulting key stakeholders to develop a national regulatory framework. After receiving over 80 submissions from industry peak bodies, consumer groups, businesses and individuals, the NMI adapted the existing legislation into the National Trade Measurement Regulations 2009. The new regulations correspond substantially with the UTML; however, there are a number of key changes that businesses must become aware of before the legislation comes into effect on 1 July.
Average Quantity System regulation The most significant change from the existing trade measurement system is the introduction of Average Quantity System (AQS) regulation. AQS regulation relates to ‘shortfall’ packaging provisions, which are designed to ensure that traded packaged goods do not contain less than the quantity stated on the label. The existing UTML stipulates that there must be no more than 5 per cent shortfall in packaged goods content. Under the National Trade Measurement Regulations, manufacturers, packers and importers can choose to continue with this system or adopt the AQS. The AQS utilises sampling standards based on those developed by the International Organisation of Legal Metrology and has three key principles: • The declared quantity on a package must accurately reflect the quantity being supplied. As such, the average net content of the packages in a production run may not be less than the stated quantity. • An allowance is made for a small number of prepackages to exceed a tolerable deficiency. • No prepackage shall be deficient by more than twice the prescribed tolerable deficiency. Australian businesses that choose to adopt the AQS system are required to mark prepacked articles with an ‘e-mark’ in close proximity to the nominal quantity amount.
Measuring instruments and material measures used for trade With the exception of a provision regarding batch testing of glass measures and changes to licensing conditions
for servicing licensees, the new regulations for measuring instruments and material measures substantially correspond to the UTML. • Glass measures: Manufacturers and importers must ensure that the appropriate proportion of a batch of glass measures is tested by an inspector, a servicing licensee or an employee of a servicing licensee. • Licensing conditions for servicing licensees: There are several new licensing conditions for servicing licensees; however, the key change from existing legislation is that a licence issued by the NMI will allow the licensee to operate in any jurisdiction in Australia. The provisions for weighbridges and packaging outlined in the National Trade Measurement Regulations 2009 replicate the current legislation; however there are a number of new requirements. Weighbridges used for trade • End-and-end weighings: The current practice of end-andend weighings will be allowed to continue provided certain strict conditions and accuracy requirements are met. These conditions include new provisions in regards to required detail, method of generation and form of measurement tickets. Under the new national system, a public weighbridge licensee must also apply to the NMI to perform end-and-end weighings to ensure those requirements are met. • Unit pricing: Certain packaged food products must be marked with the measurement of the product, its price, and its price per kilogram. For more information, visit the Australian Competition and Consumer Commission website at www.accc.gov.au. • Prohibited expressions: Expressions that directly or indirectly modify or qualify a measurement mark or a measurement mark that cannot be tested are prohibited under the new regulations. For more information on the National Trade Measurement Regulations 2009, visit www.nmi.gov.au. www.socap.org.au
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Public sector
Towards a seamless national economy The big ticket item for government and the public sector in 2010 is arguably the most ambitious consumer law and business regulation reform agenda ever undertaken. While this represents the culmination of a long process, there is still a way to go, as the implementation of the law from an operational perspective begins to take shape. Freya Purnell reports.
The story so far The vision of a single national consumer law, mooted for so long, began its journey into reality with a decision by the Council of Australian Governments (COAG) in 2007. It agreed to a broad and bold regulatory reform agenda, involving no less than 27 areas. Perhaps the most important of these was the introduction of a single national consumer law, with the aim to align the previously disparate consumer policy framework. Following work by the Ministerial Councill on Consumer Affairs (MCCA), the new consumer policy framework was agreed by COAG in October 2008, and included the Australian Consumer Law (ACL), based broadly on the consumer protection provisions of the Trade Practices Act 1974 (TPA), a new unfair contract terms law, a new national product safety law and enforcement system, a new national warranties regime, reforms to incorporate best practice in the states and territories, new enforcement powers for Australia’s consumer agencies, new civil penalties for breaches of the law, and new powers for courts to order redress. Other areas of reform where jurisdiction was to be transferred from the states and territories to the Commonwealth included trade measurement, business name regulation, personal property securities, food regulation, credit regulation, occupational licensing and vehicle regulation. Such a broad, complex reform agenda has required several waves of legislation to be debated and agreed – a process which is ongoing. For the ACL, the first round of legislation was passed in February 2009, with a second round expected to be introduced into Parliament in March this year. Consumer Affairs Minister The Hon. Dr Craig Emerson announced that the details of the final form of the ACL were agreed at a December 2009 meeting of the MCCA, with the new law to replace provisions in 18 Acts in force across Australia.
But a significant challenge is still ahead – operationalising the ACL and other national reforms. The pace of change has already been speedy, and now the race is really on to be ready by the ACL’s formal implementation date of 1 January 2011, when it will apply in all states and territories and to all businesses. Other national reforrms will take effect between now and 1 January 2012.
The architecture of change As might be expected with such an all-encompassing reform process, there is a large number of parties involved. At the December 2007 meeting, COAG established a number of working groups, which would be overseen by a Commonwealth Minister, supported by staff at the senior departmental level and senior officials from all jurisdictions. The Business Regulation and Competition Working Group (BRCWG) was given several objectives: • To accelerate and broaden the regulation reduction agenda; • To accelerate the existing COAG hot spots agenda; • To improve processes for regulation making and review; and, • To deliver significant improvements in Australia’s competition, productivity and international competitiveness. The ACL was one of the top priorities for the BRCWG, in its mission to work towards a seamless national economy. In tandem with its National Partnership Agreement to Deliver a Seamless National Economy, COAG also agreed to an implementation plan for the national reforms. Another key player in the reform process is the MCCA, which is made up of all Commonwealth, state and territory Ministers responsible for fair trading, consumer protection laws and credit laws, and is charged with the responsibility of developing a consistent approach to consumer affairs and fair trading issues of national significance. It is supported by a number of sub-committees, led by
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Public sector
the Standing Committee of Officials of Consumer Affairs (SCOCA), which consists of all chief executive officers of consumer protection agencies. Under SCOCA, there are four advisory committees and a taskforce which deal with different aspects of consumer protection: • Fair Trading Operations Advisory Committee; • Consumer Products Advisory Committee; • Trade Measurement Advisory Committee; • Uniform Consumer Credit Code Management Committee; and, • Education and Information Taskforce.
Making progress The Federal Treasury is playing a critical role in the implementation process, and in November 2009, Dr Steven Kennedy, general manager, competition and consumer policy division, Australian Treasury, gave a progress report to a SCOCA Forum for Consumer and Business Stakeholders. Kennedy said once the final parts of the new legislation are passed at a Commonwealth level (expected in the first half of the year), each state and territory will enact an application law, making the Australian Consumer Law a law of its own jurisdiction and repealing its own general consumer laws. He also explained that the enactment of this law is not the end of the journey. To overcome problems associated with harmonisation at a single point in time, amendments to the law will be made in accordance with a process set out in the Intergovernmental Agreement for the Australian Consumer Law, agreed by COAG in July 2009. “For a change to be made, the Commonwealth plus four jurisdictions – three of which must be states – must agree, after a regulatory impact assessment, to the extra relevant changes cover any amendment to the text of the law and any regulations made under it,” Kennedy said. The agreement also sets out how the ACL will be enforced and administered, as well as outlining high level commitments by Australia’s consumer agencies on how they will work together in this area, including formal cooperation arrangements and national guidance, to be guided by a formal memorandum of understanding (MOU). “The Intergovernmental Agreement codifies a range of requirements when considering policy proposals. It requires a review of the law and its enforcement within seven years of its commencement. It also contemplates a ‘second-wave’ of reforms, which will focus on rationalising and harmonising state and territory sector-specific consumer laws,” Kennedy said. According to NSW Fair Trading deputy commissioner, national reform agenda, Rod Stowe, from a practical perspective, the MOU also sets out areas such as advisory processes, compliance and research requirements, as well as how new areas of development will be dealt with. Stowe says so far there has been good cooperation between states and territories, and the new approach will offer many advantages, particularly in terms of communicating with consumers and training staff. State and territory consumer protection agencies are now undertaking consultation and working on guidance to industry about how the new law will be administered.
The trade measurement experience One of the key areas where state-based responsibility becomes national is trade measurement, and the new National Measurement Institute (NMI), which will formally launch on 20 March 2010, is in the midst of this transition. NMI CEO Dr Valerie Villiere says that ultimately the way trade measurement will operate won’t change significantly, apart from some operational simplfications. For businesses who deal with trade measurement, they will only have to deal with one organisation instead of eight. However, the launch of the NMI is providing an opportunity to lift the profile of trade measurement in Australia and raise consumer awareness through a targeted campaign. “For consumers, the key message is it is a national system, so they will have one number to call, feedback, complaints and enquiries, and one recognised trade measurement system,” Villiere says. “What’s very important to us too is that consumers tell us where our system is not working, and that is part of our compliance model.” Over time, she adds, the NMI will hopefully develop a single, consistent and recognisable mark to identify measurement equipment that has been checked by the NMI’s representatives. Under the new law, the NMI also takes responsibility for quantity marks on product labelling, with Australia complying with the international requirement for the measure to be idenitfied on the principal display panel on a product. The new legislation also introduced a choice in the way manufacturers and packers assess quantity – either by choosing to stay with the previous method or move to the average quantity system (AQS) (see ‘Legislation update’ on page 7 for more details of this change). Villiere says, “AQS is a lot more statistical and enables businesses to pack more correctly. Ultimately that will help manufacturers and packers to save money in the long-term, and this will mean that the price of consumer goods may stay more stable.” Importantly, to distinguish products measured under AQS, the NMI has chosen to adopt the European e-mark. Using the e-mark not only eliminated the need to create yet another mark, but as an internationally-recognised mark, it will help facilitate global trade, allowing products from overseas to be sold in Australia and vice versa. One of the agenda items for the NMI is now increasing awareness of this mark. As with any move from a state-based to a national system, interagency cooperation is going to be a crucial factor in making the relationship work. While trade measurement was placed within the remit of consumer agencies when it was state-based, the NMI is reinforcing that the focus of its work is with business. It is currently establishing an industry consultative committee for communication, and is seeking to secure the right mix of stakeholder representation. “In terms of continuing to deal with consumers, we will be located exactly where the states are current located, with offices and labs. What it means is that the relationship that has developed over time will always be there, but if we have a complaint, and we realise it concerns a business also present in other states, we can continue to liaise with the state-based consumer groups,” she says. www.socap.org.au
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Public sector
When you can’t say goodbye Businesses generally have the option of terminating contact with a complainant who engages in violent or unreasonable conduct. But in the public sector, it is not always that simple. Freya Purnell reports. Managing unreasonable complainant conduct is a significant issue, with estimates that around 5 per cent of complainants consume around 25-30 per cent of complaint handling resources. But the problem takes on greater importance when agencies are required to maintain an ongoing relationship with a complainant, regardless of circumstances – for example, Centrelink, the military, hospitals, schools and corrective services. According to Chris Wheeler, deputy ombudsman, NSW Ombudsman, over the past few years, the Australian Parliamentary Ombudsmen have been working on better ways to manage unreasonable complainant conduct, publishing a practice manual outlining strategies to employ where a complainant is acting in ways that are unacceptable. “Many of those strategies would apply more broadly, but some of them really are limited to organisations that can actually cut off contact. There are lots of agencies which can’t do that,” Wheeler says. SOCAP Australia hosted a Government Forum in early March on ‘Managing Unreasonable Conduct and Maintaining an Ongoing Relationship with a Complainant’. The purpose of this session was to explore ways that are fair and reasonable for managing an ongoing relationship when one of the parties is being unreasonable. This is the first in what will be a series of workshops and focus groups planned for the coming months, bringing people together to discuss the issues and practical strategies. “Hopefully by the end of the year, we will have the second edition of the practice manual, which will expand the strategies and options available in circumstances where the agency or organisation has to maintain an ongoing relationship,” Wheeler says. Unreasonable complainant conduct not only has an impact in terms of resources – there are also considerations relating to OH&S, staff stress, and increased turnover. Up until this project began, Wheeler says there was no considered, comprehensive approach or underlying philosophy on how public sector agencies should deal with this type of complainant conduct. Previously psychiatric labels or personality types were applied to complainants, based on symptoms or signs they exhibited in the course of interactions. However because complaint handlers have no mental health training, this was inappropriate and legally indefensible. Under the model outlined in the practice manual, complaint handlers instead can identify whether the conduct fits into a specific category, such as unreasonable demands, unreasonable arguments, unreasonable lack of cooperation, or unreasonable violence. “If it fits one of those categories, we have a series of strategies which can be implemented, which are fair to
both sides, because the type of complainants we’re talking about are their own worst enemies, and generally the type of conduct we’re talking about means that they will get short shrift. They could have a perfectly valid issue, but it won’t be addressed. So we’ve developed this as an approach where we try to make sure that valid issues are identified and dealt with, and that is kept separate from the management of the individual,” Wheeler says. The practice manual outlines the top 20 key elements for managing unreasonable complainant conduct. In this context, according to Wheeler, it is particularly important that complaint handlers understand that when someone makes a complaint, the organisation or agency then owns the complaint. This can come as something of a welcome surprise to complaint handlers. “We decide if we’ll look at a complaint, how we’ll look at it, who will look at it, what resources we’ll put into it, what the outcome will be – all of those decisions are made by the complaint handler. Where most unreasonable conduct arises is a dispute about that level of control. One of the key things we try to get across is a sense of control about who is in charge,” Wheeler says. One of the advantages of understanding this, particularly when dealing with unreasonable complainant conduct, is that it helps the complaint handler to not only manage the conduct, but also manage their own response. “All of a sudden they don’t feel guilty, and they don’t feel under pressure. They can rely on their professionalism to say, ‘I’m doing this way it is supposed to be done, I am following the policies of this organisation, I am being fair and reasonable’. A lot of complainants are trying to convince you that you are doing something wrong, and they will move the focus of their complaint from the substantive issue to the complaint handler. It is a significant problem that causes incredible stress to complaint handlers.” The Managing Unreasonable Complainant Conduct Practice Manual 2009 can be downloaded from the www.ombo.nsw.gov.au.
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Utilities
Essential services see complaints rise The global financial crisis brought the affordability of services provided by utilities in Australia into sharp focus. However rising prices mean that many customers will struggle to pay for essential services long after the economy recovers. Elizabeth Kelleher looks at how this affects complaints handling in the utilities sector and finds out how consumer affairs professionals are managing the increase in customers experiencing financial hardship. Over the past 12 months, the price of utilities in Australia has risen by approximately 13.8 per cent. At the same time, the economy has tightened, causing unemployment to rise, rents to skyrocket and the cost of goods and services to increase significantly. Energy and Water Ombudsmen across the country have reported substantial increases in billing complaints, particularly with regard to high bills – suggesting that many Australians are having difficulty managing their utility accounts. NSW Energy and Water Ombudsman Clare Petre reported a 33 per cent rise in billing complaints in 2009 and says that the figure reflects affordability issues across the sector. “The billing complaints fall into two categories,” says Petre. “One is generally people who are already struggling with much higher bills and the second is people who are just ringing to express their concern about further impending price increases and anxiety about their capacity to pay in the future.” Petre says retailers are aware that they are delivering an essential service and that they do have customers experiencing financial difficulty in either the short, medium or long term. “The consumers for utilities have a lifelong relationship with their provider,” she says. “If retailers know there is an issue, they know that they really have to try and work it out with the customer.”
Refer to higher level Refer to higher level (RHL) is a process whereby customers who have been unable to resolve a dispute with a retailer and have consequently lodged a complaint with the Ombudsman are then referred back to a higher level within the retailer’s organisation. RHL has been gradually introduced by Energy and Water Ombudsmen across Australia as a means of streamlining the complaints handling process and has been particularly successful in managing the recent increase in billing complaints. One of the key factors in the success of RHL is that the complaint is escalated to an individual with greater authority who can successfully resolve the issue in an acceptable timeframe and thereby restore the
company’s relationship with the complainant. Tom Keenan, manager of customer advocacy at Origin Energy, says that RHL gives retailers an excellent opportunity to address customer issues that for some reason or another haven’t been resolved at a lower level. “RHL customers are referred to a specialist complaints handling team,” he says. “Generally these teams bring matters to a swift and appropriate conclusion. This means that through the RHL process, you can absolutely recover the relationship with the customer.” The NSW Energy and Water Ombudsman says that while the process does sometimes fail, the vast majority of cases are resolved successfully. “We find that retailers like that process because it does give them the opportunity to resolve it at a higher level, it saves costs and it restores the relationship with the customer,” says Petre. “We’ve done surveys of customers who have been referred back on that basis and they start with a very negative image of the retailer, but if the retailer handles it well at that higher level, the relationship is restored and it can go forward on a positive basis.”
Identifying customers in financial hardship One of the key ways in which consumer affairs professionals have responded to decreased affordability in the utilities sector is to expand financial hardship programs. However, a retailer can only help a customer if they are aware of his or her situation and the question Continued on page 12 www.socap.org.au
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Utilities
Continued from page 11
of how to identify people who are experiencing financial hardship is an ongoing issue. Rosemarie Price, manager of customer response and improvement at Ergon Energy, says the retailer is currently undertaking a review of its hardship program to try and determine what indicators can be used to proactively identify vulnerable customers. “At the moment, we rely on customers to contact us,” says Price. “But we are very aware that we need to be more proactive and to actually be in a position where we can pick up the indicators prior to the person getting to that stage where they need to approach us, hence the review of the program.” At Origin Energy, the question of how to recognise and assist customers experiencing financial hardship has been raised several times over the past few years, but Keenan believes the solution lies in encouraging customers to come forward and inform the retailer of their financial difficulties. “We don’t believe there is an algorithm you can run which points you to customers who may be in difficulty next week or next month,” says Keenan. “What we’ve tried to do is create an environment where customers feel a bit more at ease and can self-identify.” According to Keenan, a large part of this strategy
involves reversing the traditional payment collection script. He says that if customers are feeling anxious about their financial circumstances and are worried that they are going to lose their electricity or gas, using draconian language such as “this is your last chance” is likely to result in the customer agreeing to an unsustainable payment plan. “We try to work to change that language and then introduce opportunities for the customer to self-identify,” says Keenan. “Rather than saying ‘this is your last chance’, we actually say, ‘will this help?’”
Increasing accessibility to hardship programs The NSW Energy and Water Ombudsman has applauded electricity retailers in particular for their continued efforts to support customers in financial distress, but foresees a need for further expansion. “I think the assistance programs on offer are not only pretty good but absolutely essential because we are talking about essential services,” says Petre. “The programs are timely and appropriate, but there are people who are not eligible for them and it’s a question of whether those programs can and will be extended to make sure that everybody who needs it gets assistance.” Elizabeth Kelleher is a Sydney-based journalist.
Electricity sector goes green The Federal Government’s proposed Carbon Pollution Reduction Scheme will invariably drive up the cost of doing business in the electricity sector. There is, however, less certainty about how the current climate change policy will affect the way electricity retailers engage with consumers. Elizabeth Kelleher reports. The Rudd Government’s proposed emissions trading scheme (ETS) presents a unique set of challenges for consumer affairs professionals working in the electricity sector. Designed to shift demand towards low-emissions goods and services, the ETS will lead to sustained increases in the price of electricity and consequently force retailers to engage with customers in different ways. In the initial stages of implementation, the key focus will be on managing financial hardship, however in the long-term, retailers will also have to educate consumers on how to use energy efficiently.
Compensation for low income earners The Federal Government has acknowledged the added strain increased electricity prices will have on Australians already struggling to manage their utility accounts and has promised generous compensation for low income 12 | March 2010 | Consumer Directions
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Utilities
earners. However, while low income households will be able to recover approximately120 per cent of the costs generated by the ETS, middle income families who are not eligible for Government compensation will be significantly worse off. Tom Keenan, manager of customer advocacy, Origin Energy, expects most of the demand for in-house financial assistance programs in the wake of the ETS to come from customers omitted from the Federal Government’s support scheme. He says that if the ETS is passed, Origin Energy will have to become more focused on middle income customers who have difficulty managing the price increase. “Generally, financial support provided by either state or federal governments is concession-based,” says Keenan. “But if you’re living close to the breadline and don’t receive a pension, potentially you won’t be provided with a benefit. Our programs need to be fleet-footed enough to respond to changing customer circumstances, which is exactly why we have expanded our support options on the back of the GFC. We will keep adjusting our support programs to meet the demand of our customers, whatever the demographic.” Cameron O’Reilly, executive director, Energy Retailers’ Association Australia, says that the responsibility to support those affected by rising electricity prices lies with the Federal Government. “Retailers have a responsibly to help people with temporary payment difficulties through hardship policies, but we can’t do anything long-term with affordability that relates to social policy,” says O’Reilly. “It can only be addressed by government policy.”
Changing consumer behaviour Apart from encouraging industry to invest in lower emission forms of electricity generation, the ETS is also designed to change consumer behaviour. According to O’Reilly, retailers will have a significant role to play in educating consumers about how to use energy efficiently as a means of reducing costs. “Retailers will probably need to provide more services and advice and assistance to consumers, particularly in terms of using energy wisely as it becomes less affordable,” he says. Rosemarie Price, manager of customer response and improvement, Ergon Energy, says retailers’ engagement with customers will need to be more focused on behaviour. She says that consumer affairs professionals will need a clearer understanding of what drives customer behaviour around energy usage. “There are different engagement models and different products currently being looked at,” says Price. According to Price, the industry is aware that the proposed ETS will require retailers to engage with customers in different ways in order to increase energy efficiency and says there are a range of projects currently underway to determine how best to achieve this. “It is just a matter of working out how that engagement happens and how to make it most successful,” she says.
Market differentiation The price increase destined to accompany the introduction of an emissions trading scheme is also likely to have an impact on purchasing decisions in the electricity sector. “We’re talking about a sustained longterm increase in electricity prices, and that will mean that people are more interested in purchasing decisions, who their provider is and so on,” says O’Reilly. He also suggests that customers will increasingly look beyond pricing and demand new levels of service from their electricity provider. “I think energy retailing may become a little bit more value-added in terms of service provision and advice,” says O’Reilly. “There may well be different types of retailers over time that enter the market on the basis of a different offering rather than just the price but maybe offering more assistance and advice on energy efficiency, for instance.” www.socap.org.au
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FROM THE ACCC Graeme Samuel
Trade practice breaches will be costly Anti-competitive conduct has no borders in this global economy so cooperation and universally tough penalties go hand-in-hand.
Business is on notice from the Australian Competition and Consumer Commission that it will be pursuing tougher penalties for anti-competitive behaviour in future – including cartels. For around 14 years, the maximum penalty for anticompetitive conduct, be it misuse of market power or cartel conduct, has been $10 million per contravention. We saw cases where the profit from the conduct for the company far outstripped the reach of the $10 million maximum penalty which, to put it frankly, made cartel conduct fairly good business. The Australian Parliament recognised the critical importance of strong sanctions in detecting, deterring and punishing cartel behaviour and other forms of anti-competitive conduct, and the available penalties now substantially outweigh any economic benefits associated with unlawful conduct. Financial penalties for anti-competitive conduct in general were raised significantly with amendments to the Trade Practices Act which apply to conduct occurring after 1 January 2007. In 2009, criminal sanctions were introduced for serious cartel conduct. These changes bring Australia into line with other similar anti-trust regimes in Europe, USA Canada and Japan, by focusing on the impact of the conduct to calculate penalties and determine appropriate sanctions. Recently, during a brief visit to Europe, I had discussions with lawyers, judges and regulators from around the world about anti-trust enforcement.
There is growing international momentum to raise the stakes in anti-trust enforcement, because it has such a severe impact on consumers and competitors. Anti-competitive conduct has no borders in this global economy so cooperation and universally tough penalties go hand-in-hand. Make no mistake, the ACCC will be seeking higher penalties. The courts will be asked to apply penalties in the new legislative context and the ACCC will be advocating for the penalty regime to be used to its maximum effect. Hypothetically, this means that where a cartelist might have faced penalties in the tens of millions of dollars – in a case which affected a large number of consumers – it would now be facing penalties totalling hundreds of millions of dollars. In cases where we are satisfied that there is serious cartel conduct, we will be recommending criminal prosecution to the Commonwealth Director of Public Prosecutions, with the intent of putting high-ranking executives behind bars. Those involved in anti-competitive behaviour are just like common crooks – they steal from consumers and bully their competitors while wearing flash suits and shiny shoes. The ACCC will advocate the imposition of a penalty which is no less, but no more than is realistically needed to deter future contraventions. Graeme Samuel is chairman of the Australian Competition and Consumer Commission (ACCC).
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FROM CHOICE Nick Stace
The agenda for 2010 Since 1960 CHOICE has helped to lay the foundations for basic consumer protection, we’ve exposed bad products and bad practice and we’ve raised the importance of the consumer with companies, government and most importantly with consumers themselves. As a social enterprise, we have paid our way through membership subscriptions, supported loyally by our almost 200,000 members and as such, we are trusted for our independence. Not a bad starting point and one that provides us with a platform for even bigger change over the coming years. Our focus is on unlocking the power of consumers and working with our members to help Australians become the most savvy and active consumers in the world. Over the next year we will be building that appetite for change in a number of sectors, including a fair go for consumers around supermarkets and helping them make better decisions when it comes to green and sustainable goods and services. This is a red-letter year for CHOICE, as we mark our 50th anniversary. It’s a significant milestone and provides a moment to reflect on past achievements. I stress that this is a moment of reflection and not a time for complacency, for the challenges that consumers face are as complex and concerning now as they were 50 years ago. CHOICE will be unrelenting in its focus on the future and how, in keeping with our goal, we can genuinely unlock the power of consumers. Knowing your customers and delivering upon their needs is the precursor to success, whether at the local shopping centre or for a member-based social enterprise such as CHOICE. That’s why I am doing everything in my power to open up CHOICE to all our members, so that we can be a truly member-driven organisation. Groups of members now will regularly tour our renovated labs at our HQ in Marrickville, Sydney. I speak to our members every day on the phone on issues they wish to discuss. I and our experts regularly blog and respond to members’ needs and questions. We do this because our mission is for Australians to be the most savvy and active consumers in the world and this can only be achieved if we deliver on what our members want. This ambition is supported by the information, advice and support we give members through www.choice.com. au, the much-loved CHOICE magazine and our highprofile campaigning work. CHOICE uses everything within its arsenal to unlock the power of consumers. The Shonky Awards, now in their fourth year, provide unwanted publicity to companies that produce some of the worst products and services in this country. We have turned our minds to incentives that will help
Knowing your customers and delivering upon their needs is the precursor to success, whether at the local shopping centre or for a member-based social enterprise...
reward companies who produce great products and services. On 15 March, the inaugural CHOICE awards will take place. Our members will vote in the People’s CHOICE category for the Best Retailer. The winner of this and the five other awards – ranging from Best Baby Brand to Best Technology Innovator – will be announced at a special ceremony at the National Consumer Congress in Sydney. As part of the celebrations to mark our 50th anniversary, CHOICE will be hosting this year’s Consumer Congress, which will be attended by people working in the consumer arena, as well as government and industry. The congress theme is one that is very close to CHOICE’s heart – Consumer Action – and our aim is to get decision-makers clearer about consumers’ priorities and a little more impatient for change. Savvy and active consumers will help create a country where people are given excellent service, where products match and even exceed their needs, where people are armed with the right information to make the right choices for them, where things go wrong but are put right for the consumer with little heartache, where competition reduces prices that are too high and improves quality where it is too low. CHOICE must become an indispensable ally for consumers. To do that, we need to deliver more of what our members want and develop new products and services. Our business is about building the appetite for change across Australia. Nick Stace is chief executive of CHOICE. www.socap.org.au
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REsearch
Resilience leads consumer trends for 2010 UK research group Mintel has indentified seven key consumer trends for the year ahead. With the impact of global financial crisis still being felt, adversity has created a new set of value systems, characterised by resilience. “While in 2009, fear played an important role in shaping consumer behaviour, 2010 will see a return of confidence and adaptation to overcome the restraints previously imposed on consumers. Balance has become the new mantra for a changed society,” Mintel says. The group outlines some of the key trends driving consumer behaviour in 2010, backed by its research in the US and UK.
Resilience In 2010, Mintel expects to see consumers demonstrating an ability to recover from, or adjust easily to, any misfortune or change brought on by the recession with improved attitudes, strengthened resolve, and a hunger for more useful skills. “Resilience will encompass a new skillset for consumers as in the ‘New Economy’, cooking, meal planning, and food budgeting are moving back into the fore as skills that women – and men – would like to have,” Mintel says. “More than ever, the home is at the centre of everything for consumers. Businesses that can incorporate this changed mentality – and deliver what consumers need as a result – stand to benefit.”
Escapism As a backlash against the search for value, cutting back and saving, Mintel expects escapism to be a key trend. This will resonate both in and outside of the home. “Savvy brands are already capitalising on differentiation of experiences and the merging of mediums such as 3D media, audio literature and vertical integration platforms has created a new landscape. A plethora of elements are being gradually turned into experiences and attractions, and in 2010, this will provide the key to delivering the escape consumers are seeking, going beyond the price tag to deliver real value.”
Media evolution During 2009, micro-blogging, social networking and interactive media certainly came to the fore, forming part of the everyday life of consumers. “While in 2010 use of these tools will continue to evolve, the big questions for consumers will revolve around the nature of authority and effective uses of media to engage. Media evolution will continue to be a growing influence on the method in which brands interact with and attract consumers. The emphasis for consumers will be sourcing engagement at a wider level than ever before and harnessing the growth in partnerships and technology in order to achieve it,” Mintel says.
Ethical responsibility
Consumers are expected to re-evaluate their current situation, with an emphasis on seeking value. They are far more dealconscious and are cutting back on treats and luxuries. In the UK, over half of Britons buy more products on promotion and 28 per cent have cut back on treats and luxuries. But in 2010, there will be a greater focus on brand value. “Consumers will not just buy discount brands, they will scrutinise products more, and buy those that they perceive as being good ‘value’. Therefore in 2010, those brands that engage consumers effectively stand to be successful despite current barriers such as price,” Mintel says.
Mintel predicts ethics will play a large part in building up brands and influencing purchase, but businesses need to consider the connection with the consumer and give an emotional reason to buy. Nearly half of UK adults view environmental and ethical issues as important or very important, and in the US, 39 per cent say they’d pay more for environmentally friendly products. “Raising awareness of ethical responsibility in 2010 and its associated benefits for the consumer will pay dividends for the industry. In addition, this year will see activity in ecofriendly labels and inks, and subtle changes in packaging. As consumers are ever more demanding, they will want responsibility to be a chief concern for brands and businesses, creating more scrutiny on ethical claims than ever before.”
Prove it – accountability
Stability
Reviewing and re-evaluating
This year will also see increased consumer demand for proof, results and accountability – with the current climate favouring brands that deliver on these areas. “There are a growing number of online tools to help people pay attention to virtually everything... secrecy is no longer acceptable for today’s consumers. “In the UK, recent Mintel research shows that around 16 million adults use personal finance discussion boards and 23 million use price comparison sites when looking for guidance on financial products – looking to get the ‘real story’ on deals available.”
Having left the spending binge of the past few decades behind, moderation and preparation are coming into their own, with 2010 expected to be a year for increasingly seeking balance and adjusting lifestyles to new economic realities. This is having an impact in a variety of areas – luxury designers have begun offering lower priced lines, multi-use products which help people save money are being manufactured in larger quantities, and ‘real’ food is coming back onto menus. “As consumers find that they are able to spend again, 2010 could find balanced spending and balanced consumption the key developments.”
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Social media
Can you afford to ignore the conversation? At the recent SOCAP Australia Social Media Seminar in Melbourne, entitled ‘Blogs, social networks, Twitter, virtual worlds – How do I respond to the consumer evolution online?’ and sponsored by CaseWork, a panel of experts discussed the why and how of getting involved in social media. Brandaide Communications CEO Guy Carvalho recounted a recent experience with the CEO of a major Asian bank, who was showing reluctance to get involved in social media. A simple search showed that his bank had been mentioned 400 times in the previous month in social media conversations. These mentions were on a whole range of topics, but a substantial proportion concerned customers’ experiences with the bank, and some of the messages were receiving large audiences – a single blog post was read over 4000 times. Not only was the CEO completely unaware that there was a conversation going on online about the bank, this search also revealed that the marketing department was using social media to promote products and services – and yet, when customers were talking about a gripe or problem in this sphere, no one was responding to them. This highlights how crucial a social media response should be for many companies, particularly from the perspective of complaint handling. According to the panellists, the question of ‘why’ get involved with social media has already been answered: your customers are already there, and they are already talking about your organisation. Other reasons to get on the social media bandwagon, according to Brandaide’s Baldeep Gill, who facilitated the seminar, are that involvement demonstrates a willingness to listen, it is incredibly transparent, it offers the ability to pinpoint problems and conduct root cause analysis with incredible accuracy, and it provides an opportunity for organisational improvement through co-creation with customers. So while the ‘why’ might be clear, many organisations are still struggling with the ‘how’. Dr Charmine Härtel, organisational change expert and professor, UQ Business School at the University of
Queensland, believes for organisations to successfully engage with social media, they must be internally ready to support a Web 2.0 strategy – and that means having the right culture. A big issue for organisations is how much autonomy they give employees when engaging through social media channels. The mistake many make, Härtel says, is focusing too much on risk management and not enough on building a positive work environment characterised by high levels of trust, and empowering employees to feel free to connect and communicate with people both inside the organisation and out. Importantly, she says understanding the potential of these tools requires use, and the strategy needs to evolve as the needs of the organisation mature. This sentiment was echoed by Derek Jenkins, who, as research and development manager for the Commonwealth Bank (CBA), has brought social media tools and skills to the Group Customer Relations team since 2008. Jenkins described the four stages of how an organisation may begin participating in social media. Discovery: An organisation’s initial involvement in social media – and how their customers and stakeholders are using it – may be triggered by many things, from an executive’s enquiry as to ‘what it’s all about’ or an unexpected mention. For Jenkins, this came when, in a formal complaint, a complainant made reference to
Continued on page 18 www.socap.org.au
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SOCIAL MEDIA
Continued from page 17
their intention to discuss their complaint online. When he investigated further, it was “an eye-opener” how much discussion was taking place online about the CBA. “It opened up a whole new aspect to my role as a consumer affairs professional. It’s not a one to one relationship any more, but it could be one to a million or 50 million. For me, that was the moment of discovery,” Jenkins said. Experimentation: While many organisations know they should have a social media presence, aligning the interests of all the various departments with a stake in what should be said online can make it very difficult to determine a business case and strategy. Jenkins believes consumer affairs professionals should be resolute that their job is to engage with consumers and solve their problems, and working through the social media channel is part of that role. He also advocates just jumping in and giving it a go. Given that consumers are often much more willing to engage when they are comfortable within their own online ‘space’, there may be opportunities to turn bad situations around. Successes in this area can then be illustrative of the benefits of engaging at a broader level. Acceptance: This requires all stakeholders in the business to be engaged and supportive of the strategy. Jenkins said the important issue here is to not lose sight of what you’re trying to do in the organisation, and don’t expect to be able to demonstrate ROI. Again, he
recommends standing your ground on the utility of social media as a communication channel with customers. Normalcy: Moving into this stage is a challenge, particularly as customers require very fast response. “In social media, you have to be prepared to react very quick – on an intra-hour basis,” Jenkins said. Finally, he cautions against entering social media activity with aspirations to build brand value, but instead view it as a vehicle for what consumer affairs professionals do in other contexts – engage with customers to help them with their problems or issues. If you missed out on attending the Social Media Seminar, a webinar is available from the SOCAP Australia website at www.socap.org.au. Did you know? 80% of Twitter usage is on mobile devices. There are 200,000,000 bloggers, and 54% post or tweet daily. 25% of search results for the world’s top 20 brands link to user generated content. 78% of consumers trust peer recommendations. More than 1.5 million pieces of content are now shared on Facebook daily. The fastest growing segment on Facebook is 56-65 year old females. Source: Socialnomics
Training and supporting members February proved to be a busy month for SOCAP Australia members and staff, with several workshops and events in both NSW and Victoria. A Complaint is a Gift, delivered by Kate Tedstone of TMI Australia, still proves to be popular, with staff newer to the industry attending to learn this innovative philosophy. Additionally, ASIC regulations have recently changed with regard to complaints and IDR for the financial sector. SOCAP Australia partnered with Neill Buck of Neill Buck and Associates to deliver training workshops for our financial sector members. Both workshops were well-received and we look forward to delivering further training workshops in the future. Social media is certainly the flavour of the month with many predicting the technology will play an important part in the way people
connect in the future. However, many people are asking if we can utilise social media tools for complaint handling? The answer is yes. Victorian members attended a breakfast event on Thursday 25 February to learn about this hot topic so that they are in a better position to make an informed decision about the use of these tools. A webinar of this forum is being produced and will be available for those who could not attend the breakfast (see above). Finally, by the time this publication goes to print, SOCAP Australia will have hosted a Government Forum in Canberra. This activity was designed for government members and guests with an interest in managing unreasonable conduct in circumstances where the discretion of the complaint handler is limited. Chris Wheeler, deputy ombudsman,
NSW Ombudsman, and staff facilitated a workshop which was chaired by Jill Jenkins, director, complaints, Australian Tax Office.
What’s ahead? In future months, we are scheduling a series of events around the country on the following topics: • M arch: Letter Writing For Complaint Handling Training Workshops • M arch/April: Rage to Reason Training Workshops with TMI Australia • M ay/June: Two-day Complaints Handling Intensive in Brisbane and Perth. For more information, visit www. socap.org.au or email socap@ socap.org.au to register your interest in these events.
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Book review Reviewed by Karen Andrews Exploiting chaos: 150 ways to spark innovation during times of change Author: Jeremy Gutsche This is a great book when you are looking for quick inspiration. Full of great real-life case studies and examples, Exploiting Chaos allows you to flip to a particular section and walk away with an excellent tip without having to read the entire book. The author provides theories on creating new and exciting innovation when times are economically challenging and suggests and demonstrates, with examples from specific companies, that success is not only possible when times are hard, but for some companies, more likely. It just takes ‘out-ofthe-box’ thinking.
Some of the key messages in this book are: • Fulfil an unmet need: To be successful you must tap into a need that consumers probably do not even know they have. • Encourage ‘experimental failure’ and learn from it: Failures need to happen to improve and come up with a win. • Challenge the status quo: There is no time for expecting
things to always be the same. • Get to know your customer: In fact, develop customer obsession. Step out from behind your desk or get right out of the office to find out how your customers are using your product or behaving when they visit your store. Knowing your customer well will lead to greater customer connection and innovation. • Create an environment in your business where idea generation is very comfortable for employees: The author suggests taking a look at your immediate environment – does it allow creativity and ease of discussion and framing your idea sessions clearly? He also outlines the steps for narrowing down all the ideas generated to identify the best ones to pursue. An easy read with great ideas for staff of all levels, this book will make an inspiring and fun gift for that discerning recipient. Available through the SOCAP bookstore now – visit www.socap.org.au.
Protecting Your Brand? A new Australian study* has shown: • 85% of consumer complaints can lead to a loss of brand loyalty, and • 73% of consumers that complain will feel more loyal if the complaint is handled well. *“How Consumers are Feeling Now....”, Consumer Directions, September, 2009
Use RQA’s consumer retrieval service to show your customers and consumers you care about fast, professional response when incidents occur. To help in protecting your brand, RQA’s extensive network of experienced professionals will: • Quickly and effectively retrieve products from a consumer’s home, workplace or from retail outlets • Pack and ship the product to you or to an independent party for testing RQA retrieves shelf-stable, refrigerated or frozen products.
FREE Trial Offer! Why not try us out? Get one free consumer or retail retrieval^ when you call RQA today on 1 800 GET RQA (1 800 438 772) and quote AUCD0910. ^The Fine Print: Offer valid to 31/08/10 for one shelfstable, standard retrieval up to 3kg per company between any two Australian capital city metro areas on the east coast of Australia. Value can be credited against any other retrieval. For full conditions, please call 1 800 438 772.
Your Product Retrieval Specialist www.socap.org.au
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SOCAP Australia presents
Complaints Handling Workshops For both team members and managers working in complaint handling Full and half day workshops
Letter Writing for Complaint Handling How to manage written complaints
Back by popular demand
Half day workshop Melbourne: 17 March 2010 Sydney: 24 March 2010
From Rage to Reason Limited workshops scheduled for Sydney and Melbourne, and now in Brisbane and Perth. For workshops on these topics in other locations please contact us directly. Multiple booking and distance discounts are available.
Strategies for handling and diffusing anger Full day workshop Sydney: 25 March 2010 Melbourne: 14 April 2010
Limited places remain
2 day Complaints Handling Intensive Perth and Brisbane Brisbane: 12 and 13 May 2010 Perth: 9 and 10 June 2010
For details and bookings go to www.socap.org.au, email socap@socap.org.au or contact us on 03 8687 9060. Early booking recommended.
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