Stakeholder Magazine - 2008

Creating value for customers, employees and shareholders

Customer Emotions

April 2008 VOLUME 5 ISSUE 1 £4.50 PLUS NEWS BOOK REVIEW DIARY DATES

RAC CASE STUDY DOING BEST WHAT MATTERS MOST LEADERS IN LONDON CONFERENCE CONSISTENCY IN SERVICE DELIVERY UKCSI WAVE 2 RESULTS

Download or view a copy at

www.leadershipfactor.com Alternatively contact Ruth on 0845 0252565 or email ruthcolleton@leadershipfactor.com

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Diary Dates

April 2008 28 Customer

Training courses and Conferences from around the country.

Consistency in delivery.

7 News

32 Customer

Google is voted the Number 1 UK brand and the American Customer Satisfaction Index falls.

UKCSI Wave 2 Results.

8 Case Study Mel Cartwright gives us an insight into RAC’s complaint handling system.

37 Fast Guide Qualitative Research

13 Latest Thinking

38 Book Review

Customer experience through the customer’s eyes.

Marketing experts Ben McConnell and Jackie Huba explore the ramifications of social media.

In this issue...

VOLUME 5 ISSUE 1

18 Employee Doing best what matters most.

24 Customer

39 Training Directory

Martin Donohoe reports back on the 2007 Leaders in London Conference. www.stakeholdermagazine.com

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April 2008 Stakeholder

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One Day Training from The Leadership Factor

Advancing The Service Culture £324 + VAT

Choose this course because:

“you’re serious about winning the heart and minds of your customers and you want to drive customer service excellence in your organisation”

You will learn to: · Understand and embrace the principles of customer service excellence · Identify both internal and external customers · Clarify and address customer expectations · Enhance essential customer service skills · Identify and share best practice · Create an Action Plan to aid service delivery back at work

by far the most enjoyable and worthwhile course I have ever been on… a good mixture of theory and practise with recent case studies and up to date training methods Paul Stephens Director of Housing Chester-le-Street District Council

Next date 7th May 2008

London

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The

F A C T O R L E A D E R S I N S AT I S F AC T I O N M E A S U R E M E N T

The Leadership Factor Taylor Hill Mill Huddersfield HD4 6JA

Tel: 01484 517575 Fax: 01484 517676

Email: uk@leadershipfactor.com Web site: www.leadershipfactor.com

Charlotte Ratcliffe editor

Are customers emotional or rational? Obviously human beings are a mix of both. I’m sure we can all name friends or relatives who are highly emotional and others that are cool, calm and calculated. Even that is far too simplistic because the same person can be emotional in some circumstances and rational in others. Few people would be devoid of emotion at a wedding, a funeral, the birth of a child or an exciting trip to Disney with the kids. By contrast a more rational approach would be taken by virtually everyone when deciding how to cast their vote at a general election, how to travel from London to Manchester, whether to buy the small or large carton of washing powder or whether to renew their insurance policy with the same provider.

I renewed my car insurance yesterday. Possibly one of the least momentous events of March 17th 2008, but actually quite interesting from a customer management perspective. You see, I’d been with my previous broker for more years than I can remember, partly because the service had always been good and also because I am just not a switcher. This high degree of loyalty is, I maintain, based on a very rational conclusion that switching doesn’t usually pay, certainly not if you place any value on the time involved. Rumours that it’s due to being bone idle are completely scurrilous. On this occasion however I awoke from my customary torpor for 2 reasons. First an obvious, but highly rational one – cost. It did seem very expensive. The second reason is more interesting. The whole point of using a broker rather than going straight to an insurance company is that they look after you as an individual. If you have a claim they help you with a lot of the leg work and hassle. They do the shopping around at renewal time and, especially if you’ve been with them for a few years, they understand your personal circumstances and needs and tailor the product accordingly. To demonstrate this personalisation, a new piece of paper accompanied my renewal notice explaining how they had selected the insurance product to meet my needs. The points on this standard word processed document were all completely irrelevant to me, including free cover in Europe for x days per annum. I’ve taken the car to Europe once in the last 10 years! And to add insult to injury the specially selected product was exactly the same as last year, except that it cost more. In summary I saved over £100 by switching.

Very rational. But maybe the catalyst for the whole thing was that standard document purporting to understand my circumstances and needs. It irritated me. That sounds like an emotion doesn’t it?

For a more rational discussion of the role of emotions in people’s judgements about their customer experience, take a look at the Great Customer Experience article on page 13.

Stakeholder Satisfaction is the magazine for people who want their organisation to deliver results to employees, customers and any other stakeholders as part of a coherent strategy to create value for shareholders. We publish serious articles designed to inform, stimulate debate and sometimes to provoke. We aim to be thought leaders in the field of managing relationships with all stakeholder groups.

Editor: Features Editor: Contributors

Charlotte Ratcliffe Sarah Stainthorpe Nigel Hill Stephen Hampshire Mel Cartwright Rachel Allen Rachel Davies Martin Donohoe Rob Ward Designer: Creative Director: Rob Egan Louise Martin Advertising: Editorial Director: Janet Hill

Printers of Stakeholder Satisfaction www.stakeholdermagazine.com info@stakeholdermagazine.com Stakeholder Satisfaction PO BOX 1426 Huddersfield HD1 9AW Tel: 0870 240 7885 NB: Stakeholder Satisfaction does not accept responsibility for omissions or errors. The points of view expressed in the articles by contributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher.

Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without prior written consent of the publisher.

Copyright © STAKEHOLDER SATISFACTION 2008

ISSN 1749-088X www.stakeholdermagazine.com

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Diary Dates

Diary dates MAY

MAY

SEPTEMBER

European Customer Management World

Improving Customer Satisfaction Training Course

Call Centre & Customer Management Expo

12th to 15th May 2008 London www.icbi-events.com/ecmw

7th May 2008 Manchester 15th May 2008 London www.leadershipfactor.com

16th - 17th September 2008 Birmingham www.callcentre-expo.co.uk

Fantastic line up of keynote speakers at this four day event including Stephen Covey, Sir Richard Branson, Ken Blanchard and Fred Reichheld.

Learn the very best approaches to increasing your customer satisfaction and loyalty, how to give feedback and reexamine your customers’ experience.

This course is especially useful if you have the results of your CSM survey and are thinking – what do I do now?

Call Centre Expo is not just for call centre professionals. It is for anyone who recognises the value of their customers and is seeking the essential ingredients to stimulate and enhance their customer contact performance.

Advancing The Service Culture Training Course 7th May 2008 London www.leadershipfactor.com This course is for Managers who have responsibility for Customer Service within their organisation and anybody who wants to drive Customer Service Excellence in their organisation.

Customer Satisfaction Measurement Training Course

Complaints Management Training Course

A fantastic introduction to the topic of customer satisfaction. After the course you will be up-to-speed on how to get reliable data from your customers, interpret it and use the findings to arrive at key actions to make an impact on the success of your business.

21st May 2008 Manchester www.leadershipfactor.com This is a great course designed for those implementing a complaints management system or for people wishing to improve their existing process. You will find out why people complain, how to develop ways to measure your performance on complaints resolution and will identify service recovery and customer win-back opportunities.

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JUNE

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18th June 2008 Manchester 18th June 2008 Bristol 19th June 2008 Birmingham www.leadershipfactor.com

Analysing & Reporting Customer Satisfaction Data 19th June 2008 Manchester www.ileadershipfactor.com This course is designed to show you how Excel can make analysing your customer survey results really straightforward. You'll be amazed at how many hints and tips you pick up on this practical and informative day.

www.stakeholdermagazine.com

At the co-locating Customer: Strategy & Management show, visitors can discover customer service, sales and marketing solutions to improve their customers' experience, and make the customer experience life-cycle complete.

News

news

American Customer Satisfaction Index Falls The ACSI has reported that customer satisfaction with the goods and services that Americans buy declined in the fourth quarter of 2007. The index fell to 74.9 on the ACSI’s 100-point scale, down 0.4 percent to its lowest score of 2007.

Consumer spending growth slowed in the fourth quarter as predicted by the third quarter drop in ACSI. A second consecutive drop in customer satisfaction, combined with increasing unemployment, plummeting house prices, tighter credit, high levels of household debt, and inflating fuel and food prices, is likely to pose even more challenges this quarter for consumer spending growth.

“Falling customer satisfaction has a dampening effect on consumer demand, and household debt to income ratios affect consumers’ ability to spend. Both are moving in the wrong direction, brewing up a double-whammy that may hit the economy hard” commented Claes Fornell, head of the ACSI. “In such an environment, customer satisfaction becomes even more important because satisfied buyers tend to reduce sellers’ cash flow volatility.”

John Lewis voted the nation's favourite retailer

John Lewis has retaken its position as the UK's favourite retailer, in a poll of more than 6,000 shoppers, with DIY retailer

Wickes and Gap breaking into the top 10.

The Consumer Satisfaction Index 2008 survey, found that John Lewis managed to increase its overall satisfaction score since last year, despite a more competitive retail sector.

It regained the top spot, having been nudged into second position last year by sister group supermarket Waitrose, which is now number two. Dunelm leapt up five places to reach the number three spot, while Amazon retained its position at number four. John Lewis performed well across a range of measures, but excelled in service.

adding ratings and reviews to its UK website to boost customer interaction, trust, satisfaction and loyalty. Having already done this for its US operations, the clothing retailer wants to enhance its brand and the ‘community’ feel that it already has. “Boden is well known for its ‘real’ product copy and now the brand is embracing a new opportunity for open dialogue with its dedicated customers” commented a spokesperson for Bazaarvoice who are supplying Boden with the technology behind this project.

Google Number One UK Brand

Facebook Craze – Are companies missing out?

A recent survey of marketing executives in major Europe and North America has found that bosses in the UK are being much slower to harness the power of social networking sites such as Facebook and MySpace. A spokesman commented:

“it is surprising to see that the UK is lagging so far behind other major nations in terms of recognising the business potential for social media. Social media is here to stay…if applied in the right way, it can build brand awareness, support on product launches, increase customer loyalty and give businesses consumer insight”.

Boden Adds Reviews and Ratings Mail order clothes operation Boden is

Google is the number one brand in the UK according to a recent survey. Google headed a list of 500 brands, with last year’s number one the BBC knocked back to fourth place. Google is the only firm in the top 50 to have been established after 1990. The top 10 brands as selected by the opinions of 1,500 professionals are: 1. Google 2. Microsoft 3. BP 4. BBC 5. GlaxoSmithKline 6. Rolls-Royce Group 7. Financial Times 8. British Airways 9. Fedex Express 10. Hertz

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Case Study

Mel Cartwright, RAC’s Customer Care Operations Manager, gives us an insight into RAC’s complaint handling system, which is not only completely customer centric, but moreover is profitable too. In 2006 they were named Customer Service Complaints Team of the Year in the National Customer Service Awards.

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Case Study

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Case Study

tion, including spending time with the patrol teams and listening to calls from customers who have broken down. In this way, they are able to get a good understanding of the roles of other colleagues, especially the difficulties they face.

TREAT CUSTOMERS BY IMAGINING HOW YOU WOULD WANT YOUR MUM TO BE TREATED IN THAT SITUATION

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At the heart of RAC’s success is the fact that they put great emphasis on recruiting the right people, as well as training and supporting them fully.

Working in a complaints environment is highly challenging, so ensuring colleagues have a high level of competence and a positive attitude is paramount. RAC look to recruit individuals whose values match theirs, who can build relationships quickly and who can think outside the box. Above all, RAC want people who are committed to providing good customer service and who have a desire to do that particular job. They run open evenings when recruiting so that they can demonstrate to applicants what the job is all about and the attributes needed, so that each party is selecting each other.

Next, RAC’s investment in training ensures that colleagues have the knowledge and confidence to resolve any issue.

Once recruited, colleagues embark on a thorough and supported training programme. They spend an initial four weeks learning about the role and the organisa-

www.stakeholdermagazine.com

Trainees also spend time with a ‘buddy’ in the Customer Care team so that they are able to observe the desired behaviours and familiarise themselves with customer feedback. The layout of the team is such that there is a mix of experience around each group of desks, facilitating discussion and the sharing of ideas. They begin by dealing with written complaints so that they’re able to understand the customer’s concerns and research all the available facts of the case before calling the customer. Telephone work is then introduced gradually at the individual’s own pace, with their work being closely and regularly monitored and appraised.

RAC colleagues are supported by a bespoke system which was designed to help them deal with all feedback from customers, including complaints. For example it gives FSA guideline prompts, and has easy access to relevant information. When dealing with complaints, RAC’s philosophy is that there are no scripts that must be adhered to, instead colleagues are fully empowered to respond to the customer’s complaint in an honest and individual way. Colleagues are taught to recognise every customer and their situation as unique, and should

Case Study

Giving team members such authority and autonomy is initially a frightening prospect, but RAC’s experience is that the business spends less because colleagues are so careful in spending money. Indeed, RAC have found that many customers simply require a thorough explanation of what happened and an assurance that any problem will be rectified rather than compensation.

As well as responding to complaints on an individual customer basis, RAC uses its complaint data to drive improvements.

On an ongoing basis every complaint is used to feed back any service failures into the business and identify the cause of these. Each complaint is investigated thoroughly to understand where a service has failed. In this way, any training needs or process improvements are identified and relevant managers are notified. They then give feedback to the team members involved, including giving full details of the complaint and the impact on the customer plus any incurred cost to the business, for example through compensation. If the complaint hasn’t been caused by a service failure and it is the customer’s expectations that have not been met, the team will investigate which part of the business has set that expectation and then work with them to ensure that expectations are set accurately in future.

therefore try and tailor the solution to meet each customer’s individual needs.

Another fundamental guideline to handling complaints is the ‘mum test’ – treat customers by imagining how you would want your mum to be treated in that situation!

Colleagues are also encouraged to think about what would resolve the problem for them. Whilst team members have autonomy to resolve customer issues in the most appropriate way, their performance and case management is subject to regular reviews to ensure that quality, customer focus and sound decision-making remain of the highest standard.

A questionnaire is sent out to all customers who have made a complaint in order to get feedback on the customer’s perception of how the complaint was dealt with by RAC, in terms of speed, empathy, outcome and explanation of any decision that was made. The results of this survey indicate that their customers think that RAC are handling their complaints extremely well, with around three quarters of respondents saying that they are more likely to renew their membership because of the way their complaint was handled. Furthermore, the survey results have improved year on year. If any comments are made on the survey that suggest that the customer is not completely happy with the way their complaint has been handled, RAC will call that customer

Sarah Stainthorpe Features Editor Stakeholder Satisfaction If you have any thoughts about this article you can contact Sarah at: info@stakeholdermagazine.com

to follow up on the issue. RAC have also made the investment in calculating the value of their customers.

Whilst they are passionate about handling customer feedback to extremely high standards because it is the right thing to do, this approach has also added value to RAC in terms of measurable customer loyalty.

Put simply, RAC’s culture is truly customer focused, with a complaints ratio of below 1% of breakdown call-outs demonstrating their level of excellence. Not only this, RAC are continuously seeking to improve their service. Every month the senior leadership team listen to all the calls involved in one end to end customer experience, to see if they can see any way that that experience could have been bettered. RAC also ring every customer who cancels their breakdown policy to find out why they are leaving. S

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Latest Thinking

g

th h

A few years ago we all used to talk about satisfying customers and improving customer satisfaction and loyalty. Today, some of the latest buzzwords that we are encouraged to strive for include delighting rather than satisfying customers, build a relationship with customers, improve customers’ emotional engagement with your company and even deliver a customer experience so great that your customers will want to take a photograph of it and keep it for ever!

These concepts sound great on conference platforms, might be good for career development if you’re seen to be pushing them within the company and may

appear more innovative and sexy than customer satisfaction. But are they really helping organisations to become more successful through better customer management or are they at best a red herring, or worse a serious distraction from the hard day-to-day slog of improving customer satisfaction and loyalty?

Do customers want to be delighted, wowed and engaged emotionally by companies or do they see things in a different way? Is it possible that customers are driven by their emotions to a greater extent in some situations than others? In this article I will reveal new evidence that answers these questions, and provides valuable practical guidance for companies wanting to improve the emotional aspects of their customer experience.

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Latest Thinking

Great and not so great customer experiences

Chart 1 - most liked companies 0

The evidence I am going to present about how customers feel was collected just before Christmas by surveying a randomly selected sample of 2000 representative adults from the YourSayPays panel. To understand how customers see things we needed to put things into context for them, so we asked them to think of a company that they are very satisfied with, like the customer experience provided and intend to remain loyal. As shown in the most liked companies chart, the results make interesting reading.

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Tesco M&S amazon Asda John Lewis Sainsbury’s Virgin Boots Sky Argos

Chart 2 - most disliked companies We then asked them to provide a contrasting example of a company that gives them a bad experience that dissatisfies them enough to make them switch (or wish they could switch if they are locked in). Chart 2 shows the most disliked companies.

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British Gas British Telecom Tesco Virgin Sky

How customers judge their experiences

Currys

To understand the extent to which emotional or rational factors drive customers’ judgements, we explored what influenced people’s choice of the companies they like most. Is it because they provided a delightful customer experience, made customers emotionally engaged, built a relationship? Or is it because they simply get the basics right, consistently satisfying rather than dissatisfying their customers?

Chart 3, ‘What makes customers loyal?’ reveals what makes the most difference.

Halifax npower talkTalk McDonald’s

Chart 3 - What makes customers loyal?

0.0%

Their staff are very helpful They provide high quality products They keep their promises

We then needed to see if disgruntled customers were driven simply by the converse of the factors itemised in Chart 3, companies simply not getting the basics right, or whether any other drivers were affecting things. For both their most and least liked companies, customers rated how much they were influenced by a long list of possible factors. The items were based on factors commonly used in customer satisfaction surveys and on factors drawn from books and articles about the emotional aspects of the customer experience. The very interesting findings about why customers dislike some companies so much are shown in Chart 4, ‘What makes customers disloyal?’.

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They make me feel valued as a customer They are very efficient They resolve problems handle complaints well They are convenient / easy to do business with They give me a great experience They make me feel good about myself They make me feel optimistic about the future They make me feel excited They make me feel proud They make me feel energetic

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Latest Thinking

Dissatisfaction spawns emotions The new and very interesting information uncovered by this survey is the extent to which emotions have a much stronger impact on customers’ attitudes when they’re having a bad customer experience than when they’re having a good one. The clear implication is that companies do need to invest in training their staff to empathise with customers’ emotional state in any situation where the company is not meeting customers’ requirements.

Whilst this is not completely new (training courses on managing angry customers have been around for years) most organisations fail to appreciate the extent to which the emotional aspects of the customer experience are affecting customers’ attitudes when problems occur.

Chart 4 - What makes companies disloyal?

They don’t value my business They make me feel irritated They make me feel frustrated They don’t resolve problems They make me feel stressed They are very inefficient They don’t care about me They make me feel angry They make me feel unhappy Their staff are unhappy I feel that I can’t trust them Slow service / long waiting times They make me feel neglected Difficult to do business with They don’t keep their promises

Satisfaction is more rational By contrast, positive customer experiences affect customers’ attitudes and future loyalty behaviour in a much more rational way.

This contradicts some well promoted topical views that to achieve very high levels of customer satisfaction and loyalty, companies must focus on improving the emotional rather than the rational aspects of the customer experience. Companies are encouraged to delight rather than satisfy customers, to build a relationship with them and to strive for emotional engagement with their customers. Whilst positive emotions are strongly associated with pleasurable experiences such as love, families, personal achievement etc, they do not play a strong role in customers’ definition of good customer experiences. A customer experience that people want to repeat (i.e. they are a loyal customer) is largely based on rational judgements that their requirements are being met, consistently, that good value for money is provided, that companies are easy to deal with, keep their promises etc. All things that most people would intuitively relate to. When thinking about companies that inspire a high degree of loyalty, customers are not driven by customer experiences that give them positive emotions such as excitement, pride, optimism, happiness or any of the other ‘delighters’ that some companies are trying

Chart 5 - Impact of emotions on loyalty High impact on defection

Pleased/irritated Valued customer Frustrated Stressed

Resolve problems

Happy/unhappy

Efficiency

Care/don’t care Make angry

Trust

Pleases/disappointed

Speed service Expertise

Neglected

Helpfulness Convenience

Advice

Keep promises

Value for money Keep informed

Professionalism Friendliness

Interesting/boring experience

Drive defection

Quality

Proud/hurried

Accuracy of bills Reputation Image

Optimistic/pessimistic Safe/unsafe Feel good/bad

Innovation

Website

Range

Appearance Cleanliness

High impact on retention

Drive retention

to use to ‘wow’ their customers. Of course, when customers take their kids to Disney, the positive emotions play a major role in their judgement of the experience, but not when they’re deciding whether to renew their motor insurance or phone contract, recommend their electricity supplier, keep

buying books from Amazon or decide whether to buy additional product lines from their bank or supermarket. The differences in the extent to which emotions drive good and bad customer experiences are summarised in Chart 5, ‘Impact of emotions on loyalty’.

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Latest Thinking

Reputation

Chart 6 - The best reputation 0

On balance, which companies have the best reputation and benefit most from positive word of mouth? Some companies have many advocates but also generate a lot of negative word of mouth. Other companies have virtually no detractors.

Based on positive minus negative word of mouth, Chart 6 reveals the companies with the best overall reputation with UK customers.

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M&S amazon John Lewis Tesco Asda Boots Sainsbury’s First Direct Waitrose

Do bosses understand customers?

Argos

Chart 7 - Do bosses understand customers?

As an interesting finale to the survey, we probed customers’ views on the decisions that managers in companies make about customer service. As shown in Chart 7, most people feel that company bosses just don’t live on the same planet as their customers. For every customer who feels understood by the companies they deal with, three feel the opposite.

Yes, 26.8%

Customers’ advice for companies In conclusion, most companies will achieve high levels of loyalty not by trying to build emotional relationships but by consistently getting the basics right, having well trained staff who provide the help the customer needs, efficiently, every time and who keep their promises – always do what they say they will do. Sure, smiles, friendliness and a caring attitude are all positives but they’re the icing on the cake.

Customer loyalty is based mainly on the cake being right. And guess what customers said when we asked them? Chart 8 highlights the three main pieces of advice that people would give company bosses about how to provide a good customer experience. All common sense? S

No, 73.2% Chart 8 - The customers advice 58.0%

Keep your promises

Invest in well trained staff

Get the basics right

Nigel Hill Chairman The Leadership Factor

www.leadershipfactor.com email: info@leadershipfactor.com

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s y a p y a s r u yo k u . o .c

The

y e v r u s s u b i n m O

Getting answers to your questions Need facts to make a decision or confirm a hunch ?

Inexpensive, simple research with a quick turnaround Ask a representative sample of the UK population your questions

can be easy...

1000 responses 5 closed questions From ÂŁ1795

with YourSayPays Our omnibus survey is distributed each month to the panel members of YourSayPays Companies have the chance to buy up to five closed questions of their choice to appear in the survey The survey can include a diverse range of subjects with different questions being asked by different companies If you want to ask 1000 representative members of the UK public about your brand, company or general customer service questions you can ask them with the YourSayPays omnibus survey.

More information For all enquiries please contact Jude Nottingham at The Leadership Factor on

01484 467035

or email

judenottingham@leadershipfactor.com

YourSayPays

We're happy to talk through the options available and how this could work for you.

Time spent delivering unparalleled customer service is never time wasted It’s official – the most successful organisations are going soft – they’re becoming human again! They’ve remembered, ‘just in time’ (no pun intended), that ultimately business is about people – it’s about human beings, being human.

The key assets of most organisations are not the buildings people work in, or the equipment and machines people operate, nor Intellectual property rights or the Brand Name. No, the key asset of any organisation is its people – and that means its employees and its customers.

The two are inextricably linked and you can’t have one without the other. If you have de-motivated, cynical, poor performing employees you are likely to have very few happy customers; conversely, if you have loyal employees who are motivated, empowered and well rewarded you will stand a much better chance of having an army of loyal customers who stick by you through thick and thin, recommend you to their family and friends and keep buying your products or service.

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Doing best what matters most is the key to creating satisfied customers. Therefore it would seem sensible to get your customers involved right from the start of the recruitment process. What attributes would they like your staff to possess and what sort of service do they expect from them? Once these criteria have been defined, the organisation can recruit the best people for the job, and to me that means those with the best attitude.

development so that they have every opportunity to excel in post and reach their full potential. That’s got to be a shrewd move all round, not least because it will play a major part in the long term growth and success of the company.

But it doesn’t end there. You can’t just let them loose and leave them to it - you really need to demonstrate that you value the contribution they make to the organisation.

The Asset Register

I CAN IS 100 TIMES MORE IMPORTANT THAN I.Q Of course it is essential that they are then equipped with the right set of skills and the knowledge necessary to do the job brilliantly. It is also prudent to involve all your employees in helping to develop and bring the organisation’s philosophy and key values to life. This done, it is crucial that the organisation invests seriously in its employees’ on-going professional

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I know a General Manager of a Greenfield Distribution site who kept an ‘Asset Register’ on the coffee table in the large Reception area. In it were the names and job titles of all his colleagues with a paragraph under each one outlining their hobbies and interests, achievements and ambitions. A lump came to my throat the first time I read it and I know it had the same effect on others. How do you think it made his employees feel? Special, valued individuals who felt part of a cohesive team, I bet.

Employee

At another site he managed, for Argos, he made an unusual request to his staff. On completion of their three month probation, he asked each of them to paint their hands and then make a handprint on a wall tile.

The tiles were then stuck on the wall in Reception. Above the tiles was a plaque, which read: “The hands that built Bardon.”

It was a kind of official welcome aboard and formed part of a celebration hour, sharing first impressions and a bite to eat.

THE DEEPEST HUMAN NEED IS THE NEED TO BE APPRECIATED William James He’d got it right – he is one of the growing army of leaders who are acutely aware that it’s the people who build strong, thriving organisations. Find the right ones, train

and team work goes empowerment. Staff should be actively encouraged, and, crucially, must want to (there’s that ‘attitude’ thing again) deliver exceptional service to the customer - with passion, integrity and sincerity. However, this behaviour should perhaps carry with it a Government Health Warning, as there is no growth without an element of risk. The organisation should allow them enough time to focus on individual needs and empower them to deliver original, personal, memorable service, whilst at the same time realising that all this freedom and initiative will require them, as leaders, to become more flexible, trusting and open. This is the complete antithesis to scripted dialogue that smacks of routine; hierarchical and mind-numbingly bureaucratic systems; and insipid yet rigid corporate policies and procedures that stifle individuality and reduce customers to faceless interruptions to the serious business of making money.

Cost cutting or Customer Satisfaction?

them to be the best and provide continuous feedback to demonstrate that you value their contribution and recognise them as an integral part of the organisation’s operations - and you are on your way.

Empowerment or Procedures?

Hand in hand with this robust and rewarding culture of learning and development

In the last issue of Stakeholder Satisfaction it was reported that two recent studies revealed that cost-cutting strategies, like outsourcing call centres abroad, are alienating many customers. As a result, many brands including NatWest, Direct Line and Nationwide, have started to promote the fact that their call centres are in the UK. They have listened to their customers and realised that saving a few bob at the expense of service just isn’t acceptable and doesn’t work. We customers know what we want; we have access to far more information than ever before – thanks largely to the internet; we are far more sophisticated and demanding than we were five years ago; and we have more choice. With banks, in particular, it isn’t even that important where the branch is any longer because we can carry out the majority of our transactions over the internet or by phone. We can easily vote with

our feet - and we do. But it costs ten times more to get a new customer than it does to keep one, so that spells bad news for businesses with low customer retention. Organisations must retain their existing customer base by earning their respect and loyalty through the service they provide - which is the ultimate differentiator in business today.

As far as employees are concerned organisations must do one more thing. They must ensure that their ‘ambassadors’ are rewarded handsomely for the job they do.

Get the hygiene factors right and the rest follows. In a customer-centric organisation there should also be a bonus scheme in place for outstanding service, based on specific customer feedback; Customer satisfaction should be a permanent item on agendas for Team Briefs and Departmental Meetings and staff should be given the time to ‘Make a Difference’.

Targets should be aligned with these values and employees should not be penalised for taking ‘longer than usual’ with some customers. Draconian time and motion performance measures should be assigned to the waste paper basket where they belong; Time spent delivering unparalleled customer service is never time wasted.

Who won the big match?

Rodney, a porter at the Palmar Beach Hotel in Mauritius memorizes all the scores and the names of the scorers in all the Saturday’s soccer matches in the UK Premiership. He does the same for the Spanish, Italian, French and German leagues. When guests arrive after an overnight flight, he chats to them as he carries their cases to their rooms. He asks which soccer team they support then gives them the results. They are dazzled! (Taken from ‘The Buzz - 50 little things that make a big difference to world class customer service’ - by David Freemantle)

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To see how you are measuring up, take time to be proactive and act like a customer interacting with your company. Perception plays an important part in customer satisfaction so employees should be encouraged to stand in the customers’ shoes and see the organisation through their eyes.

Once a month front-line employees should ‘Be their own Customer’ and try their organisation’s service on for size. For example, how quickly are phones answered, do they get passed from pillar to post or do staff hold themselves accountable for their actions, are staff reassuring, do they keep their promises and commitments (i.e. get back to you if that is what they have said they would do) and follow up to check that you are satisfied? Do they make you feel valued and were you treated politely and courteously. In a nutshell, were the fundamental principles of customer service adhered to? Your checklist should read:

and a time when they were on the receiving end of appalling service. Ask them to write down the words that describe how they felt on each of those occasions and flag them up on two flipcharts, one entitled ‘Dazzling’ and the other ‘Diabolical’.

In groups ask them to think about the knock-on effects of those experiences: to the customer, to the service ‘professional’, and to the organisation. Their pooled responses will speak volumes.

As a result of this, everybody who has customer contact, from the CEO down, should feel inspired to ‘search for the hero inside themselves’ and make a real difference every day.

1.

2.

3.

4.

5.

6.

7.

Recently I walked into a branch of Pret a Manger carrying a Starbucks takeaway coffee. This occurred because none of the sandwiches in Starbucks had whet my appetite and, as luck would have it, just round the corner was a Pret a Manger – I love their BLTs. Armed with a briefcase, a handbag and the coffee I walked in and to my delight spotted a BLT, which I grabbed then walked up to the counter. A little embarrassed, I muttered to the assistant “I hope you don’t mind me coming in here with this”, nodding in the direction of the cup emblazoned with the name of one of their major rivals, “but I really fancied one of your BLTs.” To my surprise, he asked “what is it – Capuccino, Latte . . ?”

“Oh, it’s a Capuccino.” I replied.

“Sugar?” He enquired.

“No, just as it comes.” I said “I tell you what”, he said,

Deliver as agreed Practise good manners Answer calls quickly Deliver confidence Show genuine empathy Minimise wait times Follow-up

During training sessions time should be spent understanding the importance of, and enhancing, communication skills such as rapport building, active listening, interpreting body language, asking the right questions and using an appropriate tone of voice. Workshops should be participative, interactive and FUN!

Dazzling or Diabolical?

Another valuable exercise is to ask your employees to recall a time when they experienced top notch customer service

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“I’ll give you a Capuccino – on the house and you can compare the two. I know you’ll like ours best!” he added, confidently.

Extremely impressed, if not a little surprised by this spontaneous act of generosity and kindness laced with a ‘hint’ of fun, I made a note of his name, and his Manager’s, and, as I wasn’t local asked what street we were on. I told him I’d write to him and let him know my verdict. He’d

YOU’LL PREFER OUR COFFEE

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made my day, and, incidentally, I did prefer his coffee. Of course that may have had something to do with the fact that the whole experience had been positive and because he had shone his light in my direction and genuinely ‘made a difference’. But, from a business perspective, the bottom line was that I would certainly go out of my way to buy coffee from him, and his company, again. And, if we are to believe the statistics, I am bound to tell at least four people about my memorable experience (now I’ve told you, that figure

Employee

will be multiplied by hundreds, if not thousands) and as we all know, word of mouth advertising is the most powerful form of advertising in the world.

I did indeed write and tell him that he had been right about the coffee. I also told him how he’d made me feel. I’m sure that would have brought a smile to his face – it would mine! I wrote another letter to his Manager telling him what great service I’d had, oh, and that I thought this employee should be cloned.

I sincerely hope he didn’t get reprimanded for giving me a freebie – If I was his Manager I’d have given him an award! The Manager never acknowledged my letter so I guess I’ll never know. But the whole episode left me with a warm feeling inside (just like the coffee!).

Action Plans

Supplement this with hard data by conducting regular employee and customer surveys to monitor satisfaction levels and identify any trends, good or bad. The results, together with the identified Priorities for Improvement (PFIs) should be fed back quickly and clearly to all concerned and some Quick Wins (Improvements based on survey results and any additional comments) masterminded and actioned. This sends out a strong message to those who have participated - that the company listens, it values their feedback and what’s more – it actually does something about it!

THE GREATEST GIFT WE CAN GIVE TO ANYONE IS THE QUALITY OF OUR ATTENTION Albert Camus

Employees should be encouraged to share their own experiences, like the example above, and learn from each other to form a general consensus about what constitutes ‘best practice’. They should develop both team and individual action plans for performance improvement which should identify: what they should stop doing, start doing, do differently and do more of. Like a good job description this document should be revisited and updated regularly in response to ever-changing internal and external forces. Likewise, periodical reviews of the organisation’s service standards should be undertaken by joint staff and customer work groups so that the organisation is seen by all to be keeping its eye on the ball and continuously striving to differentiate itself from its competitors.

third quarter of 2007 the ACSI was 75.2%, down 0.1% on the previous quarter. Federal Express (84%) and UPS (81%) top the industry rankings but what do they know about delighting the customer that others don’t? Claes Fornell, founder of the ACSI and author of ‘The Satisfied Customer: Winners and Losers in the battle for Buyer Preference’ believes that it is because they both have such strong customer relations. “They have successfully blended technology with personal service; both companies have sophisticated tracking devices that make it possible to find out exactly where a package may be and both seem devoted to saving their customers’ time and trouble. They are also locked in fierce competition without resorting to destructive price wars.

Instead, they have engaged in a fight over the best customer service, and that definitely benefits the consumer.”

Are you winning the battle for your customers’ hearts and minds? S

In my view, ‘Involvement equals commitment’ in relation to both employees and customers. Customer focus groups and on-line customer forums are another good way to involve and engage with customers. Treat them as you would like to be treated: invest both your time and energy - listen to them, build relationships with them, respect their opinions, empower them and recognise them as human assets who need to be managed well and loudly applauded, just like your employees. The ROI will be extraordinary.

Rachel Davies Director Peak Performance Training Rachel can be contacted at rachel.peakperformance@tinyonline.co.uk

Customers’ hearts and minds In the USA, the Parcel Delivery and Express Mail Industry is consistently one of the highest ranked in the American Customer Satisfaction Index (ACSI) In the

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S

Customer

S

S

Customer

Leaders in London is an annual conference which aims to show some of the best leadership thinkers from around the globe. The event is now in its fourth year and we sent Stakeholder Satisfaction writer, Martin Donohoe along to see what he could learn.

The interesting thing about attending conferences like Leaders in London 2007 is that you never know quite what you are going to get. The delegates were a varied bunch, with the blue chip corporates from sectors such as banking and IT well represented, through to many individuals from much smaller businesses. This was surprising as although the event has top name speakers, it isn’t an inconsiderable expense to attend and that must represent the a large chunk of the training budget for some of the delegates that I spoke to. What I was most intrigued about though was what lessons from the latest leadership thinking would translate into relevant terms for customer or employee satisfaction?

Benjamin Zander was the first speaker of the day – wow, what an act to follow! Mr Zander is by profession an orchestra conductor! He draws

upon his musical experience and orchestral work as a metaphor for leadership, rather effectively. Mr Zander has been working as an inspirational speaker for a number of years now. He’s an incredibly effective speaker and delivers his points with an energy that really is quite amazing.

But what lessons did he have for leadership or customer satisfaction?

Zander’s view of leadership is unconventional, as is the way he puts it across to his audience. His view of leadership is one that it is the leader’s (conductor’s) role to release in the team (musicians) “the passion, creativity, interconnectedness and fine-tuned listening as well as the desire to contribute”. By way of a demonstration he got the entire audience to sing happy birthday to a randomly selected delegate, he showed how this made the delegate feel valued and suggested that we “treat customers like they have a birthday coming up – because everyone does”.

Zander’s leadership is full of vision and living in possibility (“possibility is always one sentence away”). Whilst this is a fine sentiment, it seemed lacking in explanation as to how a leader should instil this level of commitment in their team (orchestra).

However, Benjamin Zander is certainly an entertaining and engaging speaker..

Promisingly, Steven Steven Levitt Levitt’s presentation was entitled “Key Trends – Knowing What to Measure….understanding Modern Life and its impact on Customer Behaviour”. Levitt is the bestselling author of Freakonomics, in which he presents a fascinating and sometimes controversial interpretation of society at large. He touched on one point that was very relevant to Customer Satisfaction. Levitt described incentives (for employees) as being the guts of economics and went on to give an example of how employers can get this wrong. John Szilagyi was a researcher at the IRS (in America), he identified that people were cheating on their tax returns by falsely stating they had dependent children. By simply changing the tax form to ask for the “children’s” social security numbers, 7 million fictional children vanished overnight generating an additional $3 billion dollars of tax income

Customer

for the IRS. Szilagyi’s reward for generating this astounding amount, $25 thousand dollars, paid to him 8 years later.

Levitt’s point, there are incentives for everything, incentives for employees and incentives to cheat on tax returns! Levitt’s work is definitely worth looking at from a general interest perspective with some fascinating points such as the discovery that some gangs effectively operate franchise models which are very similar to those of commercial organisations.

James Brown (publisher and editor) who gave an entertaining talk but one that lacked any real substance (“I developed my leadership style from watching football managers”). The final speaker of the day was Edward de Bono, the popular author and creator of the term ‘lateral thinking’.

His presentation gave an overview of how we use ideas to analyse data…

Marcus MarcusBuckingham Buckingham is a former researcher and is now best known for his At first glance, series of books based Andrew Zolli ’s presen- around the idea of working tation didn’t seem to to your strengths. An offer much from a satis- accomplished presenter, faction measurement Buckingham drew on from his perspective, yet this examples ‘futurist’s presentation contained some research and client work to real insight and food for thought. Zolli’s illustrate his arguments. Central to all of his work is all about global foresight and inno- work is the premise that an individual will vation, he’s in the business of predicting get the best results if they deliberately work future trends and how they might impact to their strengths. He says that companies business. Zolli showed some demograph- normally ask him to study their best teams ics predictions for the population of differ- and identify why they are the best. ent cities around the world. Aside from Buckingham says he normally finds that population growth (and shrinkage) in dif- there is actually a big range in performance ferent cities, it also demonstrated the within a team and that there isn’t one comhuge demographic changes that will pany culture that all of the team follow. His occur such as population age etc. point, that what is referred to as a great Obviously, dependent upon who your company is actually an accumulation of customer base is, this has massive impli- great teams – there’s no such thing as a cations for the future of your business. He great company! He cites the example of introduced the concept of “thinking in net- Toyota and the front line personnel at work terms” where “a network is empow- Lexus dealerships. The top 10% of dealerered individuals working in small groups”. ships have excellent records at retaining Defined in these terms, the internet ceas- their people, the bottom 10% of dealeres to be a simple repository of information ships lose over 10 times more of their peoand can be defined as “a political socio- ple. Of particular interest, Buckingham philosophy giving power to small groups”. refers to one question as the “employee This sounds like some kind of geek speak, equivalent of NPS” – “At work, do you have but when you consider the rising power of the opportunity to do what you do best citizen marketers and the impact they can every day?”. According to Buckingham, have upon an organisation’s customer the response to this question is a key to satisfaction, it reflects exactly what is hap- determining levels of employee satisfaction and engagement. His key message was pening. that more of the conversations we all have Other speakers on should be about strengths. Some of Day 1 included David David Buckingham’s proposal is counter-intuitive, Cameron Cameron who gave for example, he argues against the idea a polished perform- that ‘a great team member puts his ance, but ultimately strength aside and does whatever it takes didn’t have anything to help the team’ saying instead that ‘a new to say on great team member volunteers his Leadership and strengths to the team most of the time’.

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Martin Donohoe Marketing The Leadership Factor

If you have any thoughts about this article you can contact Martin at martindonohoe@leadershipfactor.com

Customer

Gerald Ratner was an unusual choice for speaker at this conference. His infamous “prawn sandwich” comment, provided the source for much of his talk. The story illustrates that you should never make jokes at the expense of your customers and if you do, you certainly shouldn’t publicise it; unless you want to destroy your business!

Stephen Stephen Covey Covey is a well-known author and speaker (the ‘7 Habits’ series).

Covey gave an engaging, and at times challenging, talk that took in some of his latest work and the principles behind it. Covey started by saying that the key to unleashing human potential is the implementation of strategy, the organisation’s culture must be behind it and the culture is driven by the people. He also echoed a point made be Marcus

the key to unleashing human potential is the implementation of strategy

Buckingham’s earlier talk – build on strengths, make weaknesses irrelevant.

Covey’s perspective is that leaders build moral authority by being ‘principle centric’. He describes management practices as ‘still being in the industrial age’ and of the need for leadership to unleash what he calls ‘the whole person’.

The ‘information age’ model of management is where the moral authority of leadership is the driving force for future success.

Nick NickWheeler Wheeler the founder of Charles Tyrwhitt (the shirt suppliers) gave an amusing insight into the development and operation of his business.

But again, there was no real insight into his thoughts on leadership.

Prof. Michael Porter is a world renowned strategy g u r u .

Porter’s talk took us on a strategic journey. We start by setting the right goals (according to Porter, the goal of a company is superior economic performance, not shareholder value). The next steps are to i) understand the competition, ii) consider where strategy fits and iii) goals. Look at your business relative to the industry you are in. The key is to understand the industry’s structure.

Then, shift the basis of competition, move away from just price and think about positioning your business, understanding the industry means you know where you can position your business. Porter quotes the ‘value chain’, operational effectiveness

a varied and interesting conference together with strategic positioning mean that an organisation can achieve superior performance. Porter gives five tests of a good strategy: · A unique value proposition · A different, tailored value chain · Clear tradeoffs and choosing what not to do · Activities that fit together and reinforce each other · Continuity of strategy with continual improvement of realisation Porter is particularly scathing of the ‘be agile and flexible’ approach to strategy arguing that continuity of strategy i.e. you stick to it, is absolutely key. Porter also asserts that ‘good strategy involves making customers unhappy’, he argues this on the basis that responding to the biggest complaints (from customers) may actually undermine strategic plans. In this respect, he defines strategy as something which customers listen to.

Leaders in London was a varied and interesting conference with a diverse range of speakers on the topic of leadership. The relevance of some of the speakers and their message was debatable, but this was more than made up for by the ‘heavyweight’ speakers such as Covey, Porter and de Bono. Whilst obviously not a customer satisfaction focused event, it was significant that most speakers touched on the importance of customer satisfaction in their leadership views. S

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Customer

“I’ll have the same again, please”

“I’ll have the same again, please” Why consistency matters

Why consistency matters

“I’ll have the same again, please” Why consistency matters

Rachel Allen Client Manager The Leadership Factor

If you have any thoughts about this article you can contact Rachel at: rachelallen@leadershipfactor.com

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Customer

“I’ll have the same again, please”

company again and again is because we like a predictable experience. Whether we choose to stay in a Premier Inn or pick up a Starbucks on the way to work, we like knowing what to expect. Based on this, we tend to choose our suppliers where we know that the experience is going to be the same each time and there are unlikely to be any surprises. Generally speaking, customers do not like to take a risk.

Why consistency matters

Millions of people travel frequently to London, some for business, others for pleasure. For those who need to stay overnight, there are literally thousands of hotels to choose from so finding a room isn’t difficult. But talk to many of these visitors and you will discover that, by choice, they will always stay in the same hotel or the use the same chain time after time.

These customers are ‘loyal’ and, therefore treasured by the businesses they use because, as we know, for most companies customer loyalty is the single most important determinant of long-term growth and margins. We also know that it is far more cost effective to keep existing customers than find new ones.

But what are these businesses actually providing to make these customers loyal? In a word - consistency. These customers choose to stay in the same hotels and, quite probably, eat in the same restaurants, not just because they are satisfied but because they know what they are going to get and they get it every time. At every level, every product, service, location, department and touch point, the experience provides consistent levels of satisfaction.

Confidence and trust Consistency is behind the success of all strong brands be it Aldi or Harrods. As marketers know, a brand is ‘a promise’ and the ability to deliver the promise consistently is what creates success. Breaking promises leads to dissatisfied customers. On the other hand, consistency builds customer confidence, and in turn, their trust. Customer trust enables brands to diversify into new markets taking customers with them – why else would you choose to buy insurance from a supermarket?

The reason customers buy from the same

Whilst it doesn’t take a rocket scientist to work out that consistency matters, research conducted by Cranfield School of Management’s Customer Management Forum has confirmed that consistency is as important as product satisfaction when it comes to driving satisfaction, trust and intention to repurchase.

Why is this? What do customers want?

Today’s customers are busy and they are looking for a fail-safe method to speed up the process of selection when it comes to choosing who they want to do business with. On top of this, they want to be able to choose where, when and how they conduct business without any variation in standards.

Multi - channel consistency Customers see a company as a single entity and as a result, they expect the same level of performance in all their interactions - no matter who they deal with, or how they deal with it. They expect to be satisfied at any time of the week, the month or the year regardless of which channel they use to make purchases or make enquiries. This seems fair, why should customers have to make allowances based on their buying patterns?

Supermarkets have been particularly successful at creating multi-channel consistency. The percentage of customers shopping online, rather than popping into their local store, reflects this. Customers doing their weekly shopping online expect the same quality of experience they would get when visiting a store and the supermarkets are providing this.

Using a music analogy – if you have a favourite band, you want to be equally satisfied with the way they sound whether you buy the cd, download an album or see them live.

The Cranfield research revealed the importance of multi-channel consistency not just for sales, but also for trust and advocacy.

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Customer

Taking everything into account, how satisfied or dissatisfied have you been conducting business Via an agent By post By telephone Online 0

1

Cranfield conducted two pieces of research. The first involved a company that delivered a utility product, and related services, through b2b channels. The findings of the research confirmed that consistency of information, impression and knowledge across all touch points is vital.

Furthermore, the research showed that multi-channel consistency is as important as product satisfaction when it comes to driving customer satisfaction, trust and intention to repurchase.

But the research indicates that the importance of consistency extends beyond just the purchasing transaction. Dr Hugh Wilson says: “We were quite taken aback by quite how important multi-channel consistency is… It seems that if the salesperson ploughs on with their sales pitch without mentioning the complaint which the customer made on the web yesterday, customers are as unforgiving as if the product doesn’t work.” This observation alone has far reaching implications for businesses when it comes to data sharing and internal communication etc.

The second piece of research involved a b2c organisation. In this case, the findings revealed that consistency was a driver of not just sales but also trust and advocacy.

This makes sense – it is difficult to imagine customers offering recommendations based on ‘yo-yoing’ performance levels. It is all well and good to ‘wow’ the customer

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2

3

4 5 Overall satisfaction

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from time to time but the effects are diminished if the rest of time their experience is less than satisfactory.

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The results reveal the differences in the perceptions of customers based on how they conduct transactions, thus revealing inconsistencies.

Survey implications The findings of the research serve to highlight the importance of ensuring that any customer satisfaction measurement survey includes questions to determine how consistent performance is in the eyes of the customer. Naturally, beyond that the next stage is to identify where weakness lies, the causes of inconsistency and put systems in place to ensure they are ironed out.

The Cranfield research conducted included five core questions, devised by Rita Madaleno, designed to uncover inconsistencies:

An obvious variation of this approach, requiring fewer questions, would be to use the questionnaire to ask multi-channel users to score their overall experience of each channel using a 1-10 scale. This would enable benchmarking based on customers’ own scores, see chart above.

Over the last three months, which channels have you used for conducting business with us?

Online By telephone

Customers were asked the extent to which they agreed or disagreed with the following statements:

By post

I have a consistent impression from the company, regardless of the channel I use.

Taking everything into account, how satisfied or dissatisfied have you been conducting business…

The information I get from the company is consistent across all channels.

Regardless of the channel I use, people I deal with are informed about my past interactions with the company.

I can choose from a range of channels whilst dealing with the company.

Regardless of the sales channel I use to purchase from the company, I can use other channels to get information or help.

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Via an agent

completely dissatisfied

Online By telephone By post Via an agent

completely satisfied

Customer

Online Telephone Via agent

9 8 7 6 5 4 3 2 1 0

I can choose from a range of channels when dealing with the company...

1

2

3

4

The diagram shows that customers who conduct business ‘via agent’ were most satisfied.

The advantage of this approach being that any inconsistency in the experience may be more noticeable to customers who ‘mix and match’ channels.

Customers can be probed or asked to comment on the variations providing additional useful insight. For example, a customer who regularly goes into a branch of a bank to conduct transactions may have slightly different expectations of an online facility than a customer who has only ever transacted online.

Earlier in this article mention was made of ‘promises’. In order to achieve consistency it is essential that sustainable performance targets, which can be both achieved and maintained across all touch points, are set. This is pivotal to providing consistent service. There is little point saying ‘we deliver faster than any other mail order company’ if this is only achievable for orders taken over the phone. Unrealistic expectations are unlikely to be met, let alone exceeded – and will only lead to disappointment.

5 6 7 Overall satisfaction

8

9

10

measuring consistency? Consistency is not just about measurement and performance it is also about management.

tomers’ satisfaction. Where there is a lack of consistency in performance levels – find out where it is and what is causing it.

1) Identify all the channels and touch points used by customers. Ensure satisfaction surveys cover all the areas.

6) Put processes in place to enable bench-

2) Incorporate a measure of consistency into your customer satisfaction measurement processes. Use identical survey methods regardless of how the customer contacts you or makes transactions.

Variation in data collection techniques can lead to a variation in results that can be misleading when making comparisons.

3) Put steps in place to gather contact data from all customers. You cannot survey customers if you do not know how to contact them. This may require considerable forward planning.

4) Segment satisfaction results to ensure

It is only by understanding and meeting expectations across the breadth of the business that consistency can be achieved.

you have a measure of performance across all touch points – products, services, location, departments, individual staff etc. Bear in mind, averages can hide the range of results. You may think your organisation is the best but in fact, a proportion of your branches might not be performing well at all.

Segmentation will highlight inconsistencies.

Managing consistency

5) Conduct analysis (such as correlation

What else can you do to ensure you are

or regression analysis) to determine the influence consistency has on your cus-

marking. In order to do this effectively, you need to identify the channels that your customers use when dealing with you – be sure your research incorporates these channels.

For instance – your customers may visit various retail outlets, purchase online and then use a customer service desk.

7) Share results with staff and manage performance levels. If one particular branch of a business is performing below par, work with staff to raise performance levels. Use internal benchmarking to share best practice.

But where does this leave ‘wowing’ the customer? The quest for consistency does not relieve organisations of the need to provide excellent service. A consistently poor level of service is hardly going to provide high satisfaction levels. Indeed, it is the organisations that provide consistently excellent service that lead the field. S

Sources: Customer Management: Vol 14. Issue 4 The Marketer published by the Chartered Institute of Marketing.

The Multi-Channel Challenge, Dr Hugh Wilson, will be published March 2008.

Cranfield’s Customer Management Forum www.cranfield.ac.uk/som/ccmf.

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Wave 2 of the ICS's UK Customer Satisfaction Index was published in January. Stakeholder Satisfaction takes a look at some of the key findings, and the beginnings of some trends. (results available online at www.ukcsi.com)

The UK Customer Satisfaction Index— Wave 2 Results

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Customer

The UKCSI is beginning to gather momentum. Just like organisations who measure their own customer satisfaction, the baseline Satisfaction Index was interesting, but it gets much more fun when you can look at trends over time and monitor progress (or lack of it!). The key question, of course, is not whether the index has gone up or down, but why?

This time 6,000 individuals, over 12 sectors, were involved in the UKCSI, making it the most reliable objective indicator of customer satisfaction levels for the nation as a whole as well as across sectors and regions.

Customer Satisfaction improved somewhat except Telecommunications and Local Government, both now rooted at the bottom of the customer satisfaction league table.

The UK Customer Satisfaction Index has improved since the pilot, which took place in early 2007, and now stands at 69. The main factors driving this improvement are strong increases in core service areas such as keeping customers informed, delivering on time and treating people like valued customers plus higher customer satisfaction with prices (hardly surprising in view of the growing competition for customers' shrinking disposable income).

The biggest gains were made by Government Departments and Agencies, Utilities and Insurers. All other sectors

The chart shows the Services sector retaining its lead with retailers, car companies and financial services performing well. On a less positive note, some sectors, especially Utilities, Telecommunications and Local Government, still have very low levels of customer satisfaction.

69 66

Stephen Hampshire Client Manager The Leadership Factor If you have any thoughts about this article you can contact Stephen at stephenhampshire@leadershipfactor.com

Services Retail - food Automotive Finance - insurers Retail - non-food Finance - banks Leisure & Tourism Transport Government Utilities Telecommunications Local Government

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68 70 68

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Customer

It is no accident that the Ambulance Service is performing so well in a very difficult sector. Unlike private sector companies, where dissatisfied customers will in fact have moved on, public sector suppliers are often the only option for their customers. Delivering such levels of satisfaction in these circumstances is impressive, and improving on their performance in the pilot is exceptional.

There are other notable examples where sector leaders are achieving very high levels of customer satisfaction when compared against their own peers, not least John Lewis (89), whose customers are significantly more satisfied than those of other retailers. Audi is well ahead of other car companies with an index of 87, as is First Direct with 86 in the banking sector.

Even in sectors with generally poor levels of customer satisfaction, some organisations have shown they can buck the trend, including the Fire Service in Local Government with 82 and Scottish and Southern Energy in Utilities with 77.

You don't have to look far to understand why their under-performing peers have lower customer satisfaction—the organisations and sectors with dissatisfied customers simply don't get the basics right.

They don't measure up on quality and efficiency, they miss deadlines and, adding insult to injury, they are very poor at resolving the problems they have created for customers.

10

Utilities

R2 = 0.85

9 8

Finance - Insurers Government

7 Change in Loyalty

There are also some great success stories by individual organisations, especially the Ambulance Service, still leading the field across all sectors with an exceptionally high Customer Satisfaction Index of 92.

Last time a cynical journalist commented that this might be because their dissatisfied customers aren't around to fill out questionnaires, an inaccurate as well as invidious slur.

receive are more loyal to the organisation, so organisations and sectors that deliver better service have a more loyal customer base.

Services

6

Automotive

Finance - banks

5 4

Local Govt Transport Leisure

3

Retail - food

2 Retail - non-food

1 0

Telecoms

-1 -1 0

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Change in Satisfaction

85 Retail - food

80

Retail - non-food

75

R2 = 0.83 Services Automotive

Leisure

Finance - Insurers

Loyalty

Success Stories

Finance - banks Government Transport

70 65

Telecoms Utilities

60

Local Govt

55 55

65

60

70

75

80

85

Satisfaction

It is also interesting to note the very strong, and also linear, relationship between changes in satisfaction and changes in loyalty between the earlier pilot and these new results. This very telling chart shows that organisations, even starting from a very low base in terms of customer satisfaction, such as Utilities, can achieve significant gains in customer loyalty when they improve service levels (and vice-versa).

100

R2 = 0.79

95 90 85 80 75

Loyalty

" The UKCSI is an invaluable tool as a benchmarking and economic indicator.

Already it’s being used widely by organisations to see how they compare on their customers’ radar with the best of the rest."

70 65

Loyalty

60 55

The relationship between customer satisfaction and loyalty is very strong. Individuals who are more satisfied with the service they

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50 45 50

55

60

65

70

75

Satisfaction

80

85

90

Customer

Problems and complaints

Conclusions

Customers are least satisfied with how organisations handle their complaints but, even here, some sectors are making good progress, especially the car industry. The scores for Transport have also improved but other sectors have been less successful. Firmly at the bottom of the complaint handling league table are Central and Local Government, both of which show declining levels of customer satisfaction with complaint handling compared with the pilot phase. Telecoms providers and Financial services also perform badly on complaint handling.

There are few surprises from the UKCSI. Satisfaction is strongly linked to loyalty.

Some sectors are much better at satisfying customers than others, and the chances are we could have predicted who would be near the top and bottom end. The same is true for individual organisations within each sector—certain names like First Direct and John Lewis emerge again and again as companies that really take their customers seriously.

The UKCSI provides some real insight into the key drivers for having satisfied complainants. This chart shows the average score for complaint handling given by customers who had experienced each of the following reactions to their complaint:

What the UKCSI does is to shine the spotlight of objective measurement onto customer service in the UK. The only way to get a higher score is to focus on your customers and do a better job at delivering what they want. It also reveals that many organisations are not very good at meeting customers’ needs, despite their claims.

Took responsibility

8.0

Dealt with it immediately

7.0

Were sympathetic

5.9

Told you how long it would take to resolve

5.8

Told you what would happen next

5.5

Apologised

5.0

Acknowledged your complaint in writing

4.3

Passed you on to someone else

2.9

Made excuses

2.8

Seemed uninterested

2.6

Dismissed it

2.1 1

Organisations that achieve higher levels of customer satisfaction with complaint handling employ sympathetic employees who are empowered to deal with the problem straightaway and keep customers informed about what will happen next and precisely how long it will take. By contrast, customers are dissatisfied when employees pass them on to someone else, seem uninterested, make excuses or simply dismiss their problem.

2

3

4

5

6

7

8

9

10

cific customer satisfaction survey, the UKCSI provides concrete, actionable, evidence about what works. Here is really solid evidence about staff reactions to a complaint that deliver much higher customer satisfaction with the complaints process. Do your staff consistently do the things at the top of the chart? S We’ll finish with comments from Nigel Hill of The Leadership Factor and Robert Crawford of the ICS. “It’s interesting that customer satisfaction has increased so much against a backdrop of economic Nigel Hill doom and gloom. All we’ve heard from the media in recent months are stories about runs on banks, house prices collapsing, falling retail sales, plummeting consumer confidence etc. So how does higher customer satisfaction make sense?

Simple! If customers still have jobs and money (which they do—unemployment has not risen) they actually benefit from all the economic pessimism.

Companies get worried about future profits, competition intensifies and giving customers a good customer experience to keep them becomes more important. As well as higher satisfaction with prices, we can also see this coming through in areas like treating people as valued customers and keeping customers informed.”

"The UKCSI is an invaluable tool as a benchmarking and economic indicator.

Already it's being used Robert Crawford widely by organisations to see how they compare on their customers’ radar with the best of the rest."

We have avoided “naming and shaming” the organisations that don’t make it into the top 5 for their sector, but reading between the lines there are some big names missing who need to be asking themselves some tough questions. Why is it that their competitors are outscoring them? Because they deliver what customers want.

The UKCSI is run by the Institute of Customer Service, and is based on surveys conducted by The Leadership Factor on its Your Say Pays web panel. More information and full results can be obtained from

Though no substitute for a company-spe-

http://www.ukcsi.com

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The Together Company Rewarding what matters most to people and organisations

Learn how reward and recognition strategies can help your organisation work smarter, satisfy customers, generate profits and growth, encourage people to think like owners and create a great place to work. Learn how to become a Together Company.

“I really enjoyed reading this book, the topics of which will be of extreme interest to HR practitioners and business leaders.

Topics are approached in a systematic and balanced manner. I commend Raymond Robertson’s flexible attitude of recognising that one size does not fit all and that different circumstances will attract different reward solutions.”

Roberto Ponte Worldwide Compensation and Benefits and North EU Human Resources Manager Infineum International Ltd

Order your copy at www.leadershipfactor.com or call 0870 240 7885

Book Review

Fast guide to qualitative research

Ask most people about market research and one of the first things that they will think of is focus groups. Not necessarily with great associations – focus groups are linked in many people's minds with New Labour spin-doctoring and failed product launches. This perception has been so damaging that some recoil at the very mention of them, which is a bit unfair.

We're going to take a brief look at focus groups and the rest of the contents of the qualitative research toolbox, focusing on the benefits they can bring you when they're used properly.

Exploration Before any satisfaction measurement survey (customer or employee), or indeed most surveys, it's good practice to use a phase of qualitative research in order to find out how the people whose views you're interested in see the topic that you're researching. This helps to ensure that the survey provides you with an accurate measure. Otherwise there is a danger that the questions may miss a key aspect of the topic as seen by respondents.

What is it?

Qualitative research doesn't necessarily entail any particular technique, although it does tend to suit some more than others.

Most often you would meet it in the form of focus groups (discussion groups) or face to face depth interviews. More rarified forms of qualitative research, such as ethnography, are rarely seen outside of the academic world.

What makes a piece of research qualitative rather than quantitative is the fact that it is focused on understanding rather than measurement. It's useful when we need to understand something in greater detail, or probe into motivations or attitudes.

Explanation Quantitative surveys are great at telling you what people think in terms of mean scores and percentages, but they're not so good at telling you why. Probing certain answers can add an element of qualitative insight into a large-scale survey, but sometimes the best way forward is to conduct some research specifically to uncover the reasons for a low score. This can be invaluable in helping an organisation to understand its stakeholders and gain ideas for improvement.

What is it good for?

Sampling

Qualitative research is hopeless if you want to know how many people do something or think something, or if you want to measure something like customer satisfaction. It's useful if you need to understand how people see something or if you want them to explain how they feel.

One of the features of qualitative research is that sample sizes can be very small. It's important to make sure that a range of views are represented, but often no more than 4 groups of around 8 people each will be perfectly sufficient. With depth interviews as few as 12 participants are often used.

The reason is twofold. We don't need larger sample sizes because we're not trying to achieve a statistically representative sample as with a survey. It's also because larger sample sizes would be unmanageable – qualitative research produces much more data from each individual participant, and is notoriously time-consuming to analyse properly.

Analysis So how do you analyse it? There are as many answers to that as there are qualitative researchers. By analogy to quantitative research, you're often looking to find a typical view backed up by an understanding of the range of views. It's also common to look for common themes and patterns of response. This analysis can be backed up by various models such as “grounded theory” which make explicit use of qualitative data to generate a theory about how the world works.

Validation Qualitative research can often seem rather airy-fairy by comparison with the visible statistical reliability of a quantitative survey, but it does have its own systems for ensuring trustworthy findings. One approach is to involve several individuals, working independently, in the analysis. If they all reach the same conclusions then it's likely that the findings are coming from the data rather than the researcher's head. Triangulation is another key concept, meaning that multiple streams of evidence are all pointing in the same direction. But the most fundamental rule with qualitative data is that you make the data available as well as your analysis, so that the audience can check your conclusions for themselves. S

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Book Review

Citizen Marketers - When People Are The Message

Caplan

Ben McConnell and Jackie Huba

“Citizen Marketers – When People Are The Message” is the second title from authors McConnell and Huba dealing with the phenomenon of citizen marketers, where ordinary consumers have a disproportionate impact on the fortunes of businesses, products and services. Although published in 2007, many organisations are still unsure of how to handle the whole ‘social media’ angle so the message and contents of this book are still very relevant.

Social media is the general term applied to any aspect of the internet where the users (read customers) can create their own content, examples include blogs, podcasts, product reviews etc. Citizen Marketers examines how a solitary consumer using free social media tools on the internet can have a massive impact, good or bad, on any organisation.

Mini car enthusiast he’d built a forum of 20,000 Mini enthusiasts. BMW recognised his potential and invited him to a secret test drive of the new Mini. Mullett subsequently launched his own marketing campaign to the 20,000 forum members – some of whom said it clinched their decision to buy the car.

Filters, Fanatics, Facilitators and Firecrackers are the four groupings of Citizen Marketers that the authors identify.

Each group is illustrated with insightful examples. In the ‘facilitator’ category the story of Paul Mullett is told. A UK based

The authors argue that social media and citizen marketers are at the forefront of “the democratisation of everything” and that “everyone is a publisher, everyone is a broadcaster”. These ideas are explored and the reasons why people are driven to become citizen marketers discussed. An interesting rule of thumb is identified as well, apparently 1% is the number of visitors to a website that tend to interact with it i.e. leave a comment or post a review.

These ‘one percenters’ are the people who tend to become citizen marketers.

What’s really striking about this book are the examples that show how much impact one individual can have on even the largest of businesses such as Apple (forced to reduce the price of replacement batteries for Ipods by one blogger).

EVERYONE IS A PUBLISHER, EVERYONE IS A BROADCASTER

The book concludes with a chapter which examines businesses that have built

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themselves around the concept of social media. The ideas won’t work for every organisation, but there is food for thought.

Most strikingly, in the book’s conclusion, the authors examine the link between customer loyalty and social media. They argue that the very act of a consumer creating social media is a demonstration of loyalty for that product, business or brand.

Although listed in the ‘marketing’ section, this book is very much about customers.

Reading it provides some insight into what motivates them and what causes them to take action either for or against your product or service! Social media is an increasingly important part of the marketing mix and indeed the customers’ voice – a voice that organisations are well advised to listen to. S

Peak Performance Training was founded in 1995 by Rachel Davies and specialises in management training, particularly in the areas of customer service, team building and motivation.

For more information contact Rachel Davies at:

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01455 213683

Mobile

07720 789089

rachel.peakperformance@tinyonline.co.uk

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World class case studies Marriott/Fairfield Inn, Prudential Financial, Cisco Systems, Southwest Airlines

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Results of research among delegates share and benchmark your practices (pre-briefing questionnaire)

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Practical research tools and processes to take away

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“I really enjoyed reading this book, the topics of which will be of extreme interest to HR practitioners and business leaders.

Topics are approached in a systematic and balanced manner. I commend Raymond Robertson’s flexible attitude of recognising that one size does not fit all and that different circumstances will attract different reward solutions.”

your training course Call Charlotte Ratcliffe on 0870 240 7885 or email info@stakeholdermagazine.com

Roberto Ponte Worldwide Compensation and Benefits and North EU Human Resources Manager Infineum International Ltd

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On the Stakeholder Satisfaction website you can now: Download your favourite articles from past issues of Stakeholder Satisfaction Subscribe to Stakeholder Satisfaction AND MUCH MORE TO COME...

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The Leadership Factor

Research Services

the

Satisfaction & Loyalty Research

leading edge of

More than training

satisfaction

Training courses are only part of our story, we also provide research services.

The UK’s No1 Satisfaction Research Company Conducting over 400 different satisfaction surveys each year Specialising since 1996 in the measurement and improvement of satisfaction and loyalty Offices in the UK, USA, Australia, France, Spain, Russia, Ukraine & Japan

and loyalty measurement techniques

What we can do for you We provide services in a number of areas around satisfaction measurement including:

Customer Satisfaction Surveys Employee Satisfaction Surveys Benchmarking We can provide as much or as little help as you require and we have our own teams and systems in place for the design and distribution of surveys by post, telephone, online or face to face.

What to do next To discuss your individual requirements, or to simply find out more please contact Charlotte or Martin The

T: 01484 467004 info@leadershipfactor.com

F A C T O R L E A D E R S I N S AT I S F AC T I O N M E A S U R E M E N T