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customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
IN THIS ISSUE...
06 10 16 20 22 28
the future of customer experience latest thinking The megatrends shaping customer experience
ukcsi customer The latest results from the UK Customer Satisfaction Index
FEEDING BACK TO CUSTOMERS customer It’s part of improving customer relationships
story telling research Does your customer research make any impact?
customer satisfaction & loyalty conference conference TLF’s 15th annual conference
29 30 32 35 37
monarch airlines case study How do low cost airlines compare?
pangaea laboratories case study The secret of eternal youth
rackspace case study How fanatical is your customer service?
omnichannel customer Delivering a seamless customer experience
race against the machine book review Winners and losers in the changing world of work
wdmp advertising perceptions research case study Testing TV ads www.customer-insight.co.uk | Winter 2014/15 customerINSIGHT
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We are offering a 10% discount on focus groups until the end of March 2015
WWW.CUSTOMER-INSIGHT.CO.UK AUTUMN/WINTER 2014
Nigel Hill editor
Technology has revolutionised many aspects of the customer experience over the last two decades and created many challenges for those managing customer service but it’s likely that the main impact of the technological revolution still lies ahead. Driven by advances in devices and connectivity, technology is spreading everywhere and younger generations in particular are always connected to it. If you have any 18 year-old children or grand children, what’s the record for the number of devices you’ve seen them connected to within a 30 minute period. Mobile? Tablet? TV? Landline phone (occasionally)? PC (probably playing background music on YouTube)? Smart watch or fitness band? These ‘Always Connected’ ‘Everything Now’ consumers have very different expectations from their parents. They expect instant response whatever the channel plus a seamless experience when they switch channels during the same transaction. So ignore omni-channel at your peril. For more, have a look at ‘The Future of Customer Experience’ on page 7 and ‘Omnichannel’ on page 35. Maybe your customer research needs to change as much as customer experience is changing. After all, you’ll increasingly have Gen Ys and ‘Always Connecteds’ delivering your customer experiences as time goes on, and they may not tune into graphs, pie charts and PowerPoint slides as much as your ‘more experienced’ employees. In reality, techniques that bring the customer to life can dramatically increase the impact of customer insights all the way up to the Board. Perhaps especially in the Boardroom. If you’re not sure what I mean check out Iain Law’s article on page 20. For companies struggling to improve customer satisfaction, Iain’s story telling techniques could make all the difference. If you are grappling with static or falling customer satisfaction scores you’re not alone. Having improved by 6% over its first 5 years, the UKCSI (UK Customer Satisfaction Index) has now dropped back by almost 2%. This failure by many of the UK’s leading organisations to invest adequately in customer experience is all the more baffling when the evidence that it pays is growing all the time. See the UKCSI article on page 10 for the latest trends and the review of TLF’s 15th Annual Customer Satisfaction and Loyalty Conference on page 22 for some recent evidence of the link between customer satisfaction and financial outcomes.
Customer insight 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:
Nigel Hill
Production Editor: Chris Newbold Designer:
Becka Crozier
Creative Director:
Rob Egan
Marketing:
Charlotte Ratcliffe
Printers of Customer Insight Magazine
www.customer-insight.co.uk info@customer-insight.co.uk Customer Insight C/0 The Leadership Factor Taylor Hill Mill Huddersfield HD4 6JA NB: Customer Insight 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 © CUSTOMER INSIGHT 2014
ISSN 1749-088X www.customer-insight.co.uk | Winter 2014/15 customerINSIGHT
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LATEST THINKING
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customerINSIGHT www.customer-insight.co.uk | Winter Autumn/Winter 2014/15 2014
the future of customer experience The future of customer experience will be driven by two megatrends, both of which are inter-related. 1. Technology 2. Lifestyle
(1) TECHNOLOGY Gartner’s top Top 3 Technology Trends for 20141 will all shape the future of customer experience. They are: (a)
Mobile Device Diversity and Management
(b)
Mobile Apps and Applications
(c)
The Internet of Everything
(A) MOBILE DEVICE DIVERSITY AND MANAGEMENT There is an ever escalating diversity of connected devices that people are using – often simultaneously. As well as the obvious PCs, tablets and mobiles, we now have smart TVs, connected cars and wearable technology. Products such as Google Glass, Smart Watches and the massive growth of cheap sensor technology are enabling the kind of multi-modal mobility that is driving an increased focus on self awareness as well as the urge to tell everybody about everything you’re doing right now. Someone walking down the street wearing their Adidas Micoach2 could end a bad experience call and instantly tweet to the whole world how high #BT had caused their heart rate to go.
“THE NEXT EVOLUTION IN USER EXPERIENCE WILL BE TO LEVERAGE INTENT, INFERRED FROM EMOTION AND ACTIONS, TO MOTIVATE CHANGES IN END-USER BEHAVIOR.”
(B) MOBILE APPS AND APPLICATIONS Gartner predicts that improved JavaScript performance will begin to push HTML5 and the browser as a mainstream enterprise application development environment. This will drive expanding user interface models including richer voice and video that can connect people in new and different ways. Gartner predicts that “the next evolution in user experience will be to leverage intent, inferred from emotion and actions, to motivate changes in end-user behavior.”
ALWAYS CONNECTED WILL BE THE MAIN DRIVER OF FUTURE LIFESTYLE TRENDS AND CONSEQUENTLY FUTURE CUSTOMER SERVICE EXPECTATIONS
(C) THE INTERNET OF EVERYTHING
LATEST THINKING
service delivery via the individual’s chosen device and channel. More specifically, Always Connected will affect lifestyle and service delivery expectations in three crucial aspects:
(A) TIME POOR For many years, technology has been a strong driver of the Cash Rich Time Poor phenomenon, the Blackberry making executives Always Connected, at least as far as work was concerned, over a decade ago. The crucial thing to understand going forwards is that the plummeting cost of being Always Connected is making everyone time poor. Whether it’s ‘Gen Z’ (Gen Always Connected!) chatting constantly on Facebook and, increasingly, other social networks or Silver Surfers comparing prices, more hours connected means fewer hours for everything else in your life, so everyone will become much more impatient with inefficient service delivery that involves more customer effort. This drives the two specific customer experience trends now outlined.
(B) INSTANT RESPONSE
The internet has already expanded into cars, domestic appliances, vending machines and just about every device with a human interface and a power source. Advances in connectivity have already resulted in wifi enabled air travel, smart cities and even connected roads3. People use iPhone apps to monitor their sleep. Gartner concludes that most enterprises are not technologically, operationally or organizationally ready to respond to this Always Connected consumer.
(2) LIFESTYLE Always Connected will be the main driver of future lifestyle trends and consequently future customer service expectations. Whilst the duration of connectivity and the type of devices people are connected through will vary across generations, there will be an overwhelming trend of more connectivity and stronger expectation of
As stated above, the huge growth of mobile technology means that people do what they want and get what they want any time any place – Instant Gratification. Before long hardly anyone will want to wait for anything, ever. Currently there are many inbuilt delays in most companies’ service delivery processes from call centre advisors who are not authorised to handle the full range of potential customer enquiries to corporate Twitter accounts (even so-called ‘care’ and ‘customer service’ accounts) that elicit no response to a service request or at best a very slow one.
(C) WHAT’S HAPPENING In the Always Connected world your customers always know What’s Happening, whether it’s where their friends are now and what they’re doing or how much gas their heating system uses when they turn up
www.customer-insight.co.uk | Winter 2014/15 customerINSIGHT
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LATEST THINKING
the lounge thermostat. So it’s completely natural to them that they should also want to know at any time what’s happening with their product delivery, with the replacement boiler they’re waiting to be installed, with their bank or utility provider switch, with their insurance claim. Moreover, they understand that technology has made it easy for companies to keep them informed. So if they’re not, why not?
THE LONG TAIL Jo Kraus rapidly built Excite into a company worth over $1 billion before the bursting of the dot.com bubble and the rise of a company called Google caused an equally swift reversal in its fortunes. In subsequently analysing Excite’s demise, Kraus pinpoints Google’s superior understanding of the Long Tail of the internet. He explains that whilst the 10th most popular query on Excite was 10,000 times more requested than the 1,000th most popular, the top 10 queries made up only 3% of their total search volume. But this seemed impossible to monetise. Previously, advertising had been about a relatively small number of big spenders targeting mass markets. Google understood that Search lent itself to small advertisers targeting small markets and through their invention of AdWords invented a way to make money out of the Long Tail. As Kraus says, the internet is about millions of markets of dozens rather than dozens of markets of millions. Customer Service Directors will have to accept that they are operating in a Google not an Excite world. They will have to be equipped and willing to listen, respond and deliver to their customers whichever channel they choose to use. Today. And that might not be the same one they used yesterday.
MILLENNIALS As the future customers, millennials and their successors will obviously encapsulate the future of customer experience and, in
8
particular customer expectations. A 2013 study by Larry Rosen observing US middle school, high school and university students found that most participants managed to focus for only six minutes on a task before turning to a technological distraction. Many spend up to eight hours a day on their phones on a variety of tasks and apps, which involves much rapid switching between them but most time is devoted to using social networking. Of course, the social networking doesn’t just involve one site. As well as Facebook and Twitter, Instagram and Snapchat, new must-visit social networking sites are gaining traction with teens all the time. Academics have concluded that the main purpose of all this activity is instant emotional gratification.
ACCORDING TO A 2012 HARVARD STUDY POSTING VIEWS ON FACEBOOK AND OTHER SOCIAL MEDIA SITES DELIVERS A POWERFUL REWARD TO THE BRAIN SIMILAR TO THE PLEASURE FROM FOOD AND SEX.
According to a 2012 Harvard study5 posting views on Facebook and other social media sites delivers a powerful reward to the brain similar to the pleasure from food and sex. The study led by two neuroscientists concluded that “self disclosure” produces a response in the region of the brain associated with dopamine, which plays a major role in reward-motivated behaviour. The researchers said most people devote 30 to 40 percent of their speech to “informing others of their own subjective experiences” but that on social media, this is closer to 80 percent. In tests, some participants were happy to forego the chance of financial rewards if the alternative was talking about themselves. But maybe all this attention switching and gratification seeking is the
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
world of the future? The world that companies’ service delivery processes will have to respond to.
PLANNING FOR THE FUTURE: INSTANT AND OMNICHANNEL As Gartner emphasised, keeping up with customers’ rapidly evolving behaviours and expectations will require a significant allocation of management and financial resources from enterprises. They will need to deliver fast and consistent experiences across channels, devices, locations and time. In the UK, 92% of consumers are already using a variety of different channels, from voice to chat to online and mobile, to communicate with their suppliers’ customer service departments6. (See Nick Mitchell’s article on page 35 for the full story). According to the same research new channels are starting to grow in popularity, with customers expressing the following channel behaviours for accessing customer service: •
Landline – 66%
•
Online – 50%
•
Mobile – 22%
•
Live Chat – 15%
•
In Person – 10%
•
Facebook – 7%
•
Customer Service App – 5%
According to Google research in August 2012, 90% of customers cross devices in pursuit of a single service goal like managing finances or planning travel and two-thirds of those reported using two or more screens simultaneously for distinct activities7. Social media is the fastest growing channel for customer service, especially amongst younger consumers. The smart phone is the fastest growing device.
LATEST THINKING
The learning for brands is that they will have to focus increasingly on:
1) THE OMNICHANNEL CUSTOMER JOURNEY They must make sure that consumers get the same quality of service every time they connect, irrespective of the channel they use. Businesses must also use the data they hold on their customers to predict intent and maintain the context of the situation so that customers can continue their interactions via a different channel or device, at a later time.
2) SERVICE CO-CREATION Companies can smooth this path by using rapidly developing big data/artificial intelligence predictive software to anticipate their customers’ likely use of channels and devices. In addition they could step back in time and simply ask customers how they prefer to communicate and co-create individual service strategies.
3) NOW Customers want a knowledgeable response to their enquiry right now, whatever the channel. They also want to be kept informed, and much more often than their suppliers think. All this via their device and channel of choice, obviously.
4) NEW CHANNELS
collaborative and likely to respond well to opportunities for positive engagement.
Companies must have a plan for delivering a perfect customer experience across all channels. This means investing in newer channels such as Facebook, Twitter and a downloaded customer service app even if they have yet been adopted only by a small minority. But they have to be done properly. The worst thing is to set up a Twitter account that elicits no response when used by a customer. Try tweeting @BTCare and seeing how long you have to wait for a response. I tweeted it on October 11th last year and at the time of writing this article I’m still waiting!
In summary, customers today expect a seamless, intuitive experience – one that maintains continuity, connectivity and context across all channels to simplify their lives. Since consumers are also becoming less inert about switching suppliers, getting omnichannel right will be an essential requirement for all businesses to meet customer experience expectations in the future.
5) ENGAGEMENT A key characteristic of the newer channels in particular is the opportunity to develop more engagement with customers. Too many companies are still ignoring the idea that their markets are really made up of people. Increasingly, customers expect to be treated like human beings. As originally proposed in The Cluetrain Manifesto8, ‘markets are conversations’ – social networks of people who communicate with and influence each other. This can have very negative implications for companies that ignore the future of customer experience but is also an opportunity. Gen Y in particular are
Nigel Hill Founder of TLF Research & Editor of Customer Insight Magazine info@customer-insight.co.uk
REFERENCES 1.
Gartner Symposium, Orlando, 10th October 2013
2.
TechRadar, 16th October 2013
3.
The Telegraph, 3rd October 2013
4.
Rosen, L.D., Whaling, K., Carrier, L.M., Cheever, N.A., and Rokkum, J. (2013). The Media and Technology Usage and Attitudes Scale: An empirical investigation. Computers in Human Behavior, 29(6), 2501-2511.
5.
Diana I. Tamir and Jason P. Mitchell, ‘Disclosing information about the self is intrinsically rewarding’, Department of Psychology, Harvard University, May 2012
6.
[24]7 Inc, survey of 2,000 UK consumers September 2013.
7.
The New Multi-Screen World Study, Google Think Insights August 2012
8.
The Cluetrain Manifesto by Levine, Locke, Searls and Weinberger, Basic Books, 11th edition 2011
www.customer-insight.co.uk | Winter 2014/15 customerINSIGHT
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ukcsi latest results The 12th UK Customer Satisfaction Index (UKCSI) has just been published. The survey is conducted by TLF for the Institute of Customer Service (ICS). 79
CUSTOMER SATISFACTION: THE STATE OF THE NATION
78
78.2
Customer satisfaction in the UK has fallen for the third consecutive six-month period. The July 2014 UKCSI dropped by 0.8 points, to 76.3 (out of 100), from 77.1 in January 2014. We are now seeing a marked downward trend in the satisfaction of UK customers.
UKCSI PERFORMANCE BY SECTOR
UK Customer Satisfaction Index (UKCSI)
78.0
77
77.3
77.9
77.4
77.1
76.7
76
76.3
75.6
75 75.2
74 74.1
73 72 72.0
71
The fall in customer satisfaction applies to all sectors except Utilities, which achieved a small increase of 0.4 points between January 2014 and July 2014. However, it remains the lowest-scoring of the thirteen sectors in the UKCSI, with an average rating of 69.4.
Jan-09
Jul-09
Jan-10
Jul-10
Jan-11
50
60
Jul-11
Jan-12
Jul-12
70
Jan-13
Jul-13
80
The biggest drops in satisfaction by sector were seen in Leisure (-1.3), Insurance (-1.3) and Services (-1.4).
Automotive
79.7
Leisure
79.6
For the first time since the UKCSI began in 2008, satisfaction with the Insurance sector has fallen behind satisfaction with Banks & Building Societies.
Banks & Building Societies
77.7
Insurance
77.6
78.8
Services
Telecommunications & Media
72.2
Transport
72.1
Public Services (Local)
71.9
Utilities
Segment Organisations with consistently high customer satisfaction ratings
100
80.9
Retail (Food)
Public Services (National)
Jul-14
90
79.8
Evidence from the UKCSI suggests that there are four broad segments of organisations, in terms of customer satisfaction: Amid the overall drop in satisfaction, there is significant variation in customer satisfaction performance among the 197 named organisations featured in the UKCSI. Only 28 organisations increased their score by at least one point compared to July 2013. But 96 have seen their score fall by more than one point over the period.
Jan-14
82.2
Retail (Non-food)
Tourism
WHICH COMPANIES ARE BEST?
10
70
70.9 69.4
Jul-14 Jan-14
Business impact
Remain well placed to benefit from customer recommendation, loyalty and trust, but are potentially vulnerable to rising customer expectations and rapidly changing needs
Organisations that have seen significant recent improvement in their customer satisfaction
Well positioned for sustainable business success provided they retain a focus on customer service and satisfaction
Organisations whose customer satisfaction is around or below the average for their sector and is relatively stable
Likely to be vulnerable to rising customer expectations and rapidly changing needs and preferences
Organisations whose customer satisfaction ratings have declined
Likely to experience challenges in maintaining customer trust, loyalty and recommendation, with potentially damaging consequences for sustainable business performance
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
CUSTOMER
the top 50 Evidence from the UKCSI suggests that there are four broad segments of organisations, in terms of customer satisfaction: John Lewis and Amazon continue to be the highest ranked organisations for customer satisfaction. John Lewis has reclaimed the no.1 position in UKCSI in July 2014, having been placed no.2 in January 2014. This is despite its score being 3.1 points lower than a year ago. John Lewis receives consistently high scores across all customer experience metrics in UKCSI. Its ratings in the area of “Professionalism”
- driven by customers’ experiences with staff commonly rated as helpful, friendly and competent - are particular strengths. Amazon meanwhile has emerged as a leader in the areas of “Ease of doing business” and “Timeliness”. Two organisations appear in the top 10 for the first time. Specsavers makes its first appearance in UKCSI and Tesco Mobile’s ratings have continued to improve, making it the fourth highest ranked organisation.
Top 50 named organisations
UKCSI score July 2014
UKCSI score July 2013
Top 50 named organisations
UKCSI score July 2014
UKCSI score July 2013
John Lewis
87.7
90.8
Morrisons
81.8
80.9
Amazon
87.6
89.0
eBay
81.7
82.8
First Direct
86.3
87.2
P&O Ferries
81.6
81.9
Tesco Mobile
85.8
82.6
Kia
81.5
84.6
Marks & Spencer (Food)
85.6
86.7
Superdrug
81.5
n/a
Waitrose
85.0
88.5
Marriott
81.4
85.3
Specsavers
84.4
n/a
Subway
81.4
82.4
Aldi
84.2
86.2
RAC
81.3
81.1
Next
84.0
82.2
Sainsbury’s
81.3
82.5
Nationwide
83.5
83.7
Hilton
81.2
84.2
The Co-operative Bank
83.5
86.7
Autoglass
81.1
81.9
Pret A Manger
83.4
n/a
BMW/Mini
81.0
82.0
Center Parcs
83.3
78.9
Toyota
81.0
82.8
Argos
83.0
83.7
Asda
80.9
82.2
LV=
83.0
83.3
Audi
80.9
84.3
Boots
82.9
81.8
Costa Coffee
80.9
82.1
Toby Carvery
82.8
83.7
Wilkinson
80.9
83.5
Skoda
82.7
85.6
Yorkshire Bank
80.9
n/a
Tesco Bank
82.7
76.4
Northern Ireland Electricity
80.8
77.1
Mercedes Benz
82.6
84.4
Marks & Spencer (Non-food)
80.7
86.7
Greggs/Baker's Oven
82.5
84.8
Pizza Express
80.6
81.8
Honda
82.5
84.7
AA
80.5
81.0
Iceland
82.1
85.8
Caffe Nero
80.5
82.1
P&O Cruises
82.0
78.6
SAGA Insurance
80.5
83.9
Premier Inn
82.0
82.1
Volkswagen
80.5
81.4
Hyundai
81.8
81.5
www.customer-insight.co.uk | Winter 2014/15 customerINSIGHT
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UKCSI CUSTOMER
THE MOST IMPROVED ORGANISATIONS
A number of organisations have defied the national trend of declining customer satisfaction. Ten organisations recorded a UKCSI score improvement of more than 3.5 points between July 2013 and July 2014.
demonstrates that despite the influence of economic conditions and rising customer expectations, it is possible to improve customer satisfaction by focusing on customer experience and service.
Top 10 most improved organisations
UKCSI July 2014
UKCSI July 2013
+/-
Sector
Dwr Cymru (Welsh Water)
76.9
70.2
+6.7
Utilities
Tesco Bank
82.7
76.4
+6.3
Banks and Building Societies
HM Passport Office
77.4
72.3
+5.1
Public Services (National)
Homeserve
75.2
70.4
+4.8
Services
Center Parcs
83.3
78.9
+4.4
Tourism
East Midlands Trains
75.9
71.7
+4.2
Transport
First ScotRail
74.0
69.9
+4.1
Transport
Butlins
80.1
76.3
+3.8
Tourism
Northern Ireland Electricity (NIE)
80.8
77.1
+3.7
Utilities
Santander
77.4
73.8
+3.6
Banks and Building Societies
SUSTAINED IMPROVEMENT IN CUSTOMER SATISFACTION Short term improvements in customer satisfaction are an encouraging indicator of future performance, but realising the business benefits of better customer service requires a sustained and consistent focus. The three organisations with the largest rise in customer satisfaction over the past five years (since July 2009) are:
THE 12 ORGANISATIONS WITH UKCSI SCORES ABOVE 80 IN EVERY SET OF RESULTS SINCE JULY 2009 Organisation
Sector
The AA
Services
Asda
Retail (Food)
Boots
Retail (Non-food)
Hilton
Tourism
John Lewis
Retail (Non-food)
Marks & Spencer (food)
Retail (Food)
Marks & Spencer (non-food)
Retail (Non-food)
• N orthern Ireland Electricity, up 13.8 points
Marriott
Tourism
Premier Inn
Tourism
• Homeserve, up 10.6 points
RAC
Services
Toby Carvery
Leisure
Waitrose
Retail (Food)
• N ationwide (Building Society), up 7.1 points
12
These top 10 improvers represent a range of sectors and business models. A number of them are from sectors which are not among the highest performing for customer satisfaction. Their performance
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
CUSTOMER
WHY IS CUSTOMER SATISFACTION FALLING?
“
Here are the thoughts of Joanna Causon, CEO of the ICS:
“There are a number of factors which may account for the falling trend in customer satisfaction. Customer expectations are continuing to rise and their needs are evolving more rapidly, with convenience, ease of doing business and speed seen as particularly important. For the first time, this UKCSI report shows the levels of satisfaction by age group; the fact that younger people are on average less satisfied than older age groups suggests that customer expectations will continue to rise in future. As demand and confidence grow, organisations may be tempted to shift their priority away from retaining customers through focusing on customer experiences, towards more emphatically increasing customer numbers and market share. However, evidence from the UKCSI continues to point to clear and consistent linkages between high levels of
Joanna Causon CEO Institute of Customer Service
”
customer satisfaction and trust, loyalty, likelihood to remain a customer, and in the Retail food sector in particular, higher sales growth.
UKCSI SCORE BY AGE GROUP
80.3 77.4 75.9
76.0
74.4 72.5
18 - 24
78.5
77.9
77.6
B
C1
76.1
25 - 34
35 - 44
45 - 54
55 - 64
65+
A
C2
There are a number of implications for organisations in the customer satisfaction differences between customer segments: • Organisations need to develop a deep understanding of the needs and preferences, across the whole customer experience, of the customer segments they serve.
• The relatively lower levels of satisfaction in younger age groups suggest that, now and in the future, organisations will continue to be challenged by rising customer expectations.
www.customer-insight.co.uk | Winter 2014/15 customerINSIGHT
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UKCSI CUSTOMER
WHY CUSTOMER SATISFACTION MATTERS: THE BUSINESS IMPACT
The declining trend in customer satisfaction has important implications for business performance in two key respects:
FOR INDIVIDUAL ORGANISATIONS
FOR THE UK ECONOMY
The link between customer satisfaction and future business performance means that those organisations with high and / or improving satisfaction will be much better placed to take advantage of increasing customer demand than those with weaker levels of satisfaction.
There is a risk that falling levels of customer satisfaction in the UK may impact negatively on the country’s reputation as an attractive place to invest and do business. Moreover, the ability of UK companies – in all sectors - to benefit from growing demand in global markets is underpinned by the customer experience they offer.
Measure
Business impact
The evidence
Trust
• Central to an organisation’s ability to
An increase of 10 percentage points in an organisation’s UKCSI score, correlates to an average increase of 12 percentage points in the trust rating from its customers
retain and acquire customers • Affects an organisation’s ability to collaborate effectively with partners and suppliers • Influences reputation with the media and analysts, with potential implications for shareholder value and ability to raise investment funds Loyalty
• Enables retention and increased spend from existing customers
rganisations achieving relatively high UKCSI scores (more than 82.5 O points out of 100) benefit from high levels of customer loyalty. 88% of their customers score 9 or 10 out of 10 when asked to rate their liklihood of remaining a customer
Recommendation
A leading indicator of future growth
• T he majority of customers (55%) who gave an organisation an overall satisfaction rating of 9 or 10 points (out of 10) in UKCSI stated that they had subsequently recommended the organisation • J ust 29% of customers who gave an organisation a rating of 7-7.9 had given a recommendation • A verage recommendation rates drop below 15% for satisfaction ratings below 6
Customer satisfaction in the Retail food sector
Drives the organisation’s sales growth and market share in a competitive market where customer spend is tight
During 2013 and 2014 there has been a consistent link between customer satisfaction and sales growth • T he sales growth delivered by the food retailers with a UKCSI score above the sector average has been better than that of the below average competitors by a margin of at least 3% • T he combined market share of companies with a higher than average UKCSI has grown, while the combined share of the below average UKCSI organisations has decreased Year on year sales performance in the 12 weeks to 25 May 2014 • F ood retailers with a July 2014 UKCSI score above the sector average (80.9 points) achieved average growth of 8% • A ll companies with a UKCSI score above the sector average increased sales, except Morrisons which registered a fall in sales of 4% • F ood retailers with UKCSI scores below the sector average delivered average growth of 5%. However, the performance of Lidl, whose sales growth was 23%, was a significant influence on this figure. Without Lidl, the below-average organisations registered an average sales decrease of 0.5%
14
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
CUSTOMER
CUSTOMER SATISFACTION DRIVES LOYALTY
conclusions
100% 90%
88%
% of customers that are very loyal (i.e. those scoring 9 - 10 for likelihood of remaining a customer
80%
According to Joanna Causon this is how organisations should respond to the latest UKCSI results.
70% 60% 47%
50% 40%
32% 26%
30% 18%
20% 10% 0%
• It will be important to invest in customer insight and apply it with greater speed and agility as customer needs and preferences evolve.
38%
10%
Below 70.0 70.0 to 72.4 72.5 to 74.9 75.0 to 77.4 77.5 to 79.9 80.0 to 82.4 82.5 & above UKCSI score of the organisation
CUSTOMER SATISFACTION DRIVES RECOMMENDATION 60%
55%
% of customers that have recommended the organisation
50%
41% 40% 29%
30% 20% 20% 14% 11%
10% 1% 0%
1 - 1.9
4% 2 - 2.9
5% 3 - 3.9 4 - 4.9 5 - 5.9 6 - 6.9 7 - 7.9 Customer’s satisfaction rating (1-10 scale)
8 - 8.9
9 - 10.0
• Ease of doing business and convenience have a growing resonance and need to be embedded in the experiences organisations offer their customers. • Customer service skills, capabilities and standards need to be reviewed continuously to ensure that they are current and relevant in a context of heightened customer expectations. • Above all, there needs to be a strategic leadership commitment to customer service and a focus on the whole customer experience, especially in sectors where multiple partners and entities are involved in providing service to customers. And a final word from Jo:
Retail food year on year sales growth 0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
8%
5%
Organisations with above sector average UKCSI Organisations with below sector average UKCSI
“Now is a time for organisations to hold their nerve and maintain focus on the customer experience. Those that do so will be best positioned to benefit from the sustainable and tangible business benefit of customer service.”
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FEEDING BACK TO CUSTOMERS AND STAFF At TLF we strongly believe that feeding back survey results, to both staff and customers, is as vital to the survey process as the data collection itself. We cannot recommend enough that you feed back results. In fact, we strongly urge you to feed back results. Whilst plenty of time is often allocated to planning and running a survey, it is fair to say that often little or no time is assigned to what, how and when results are going to be shared. Survey plans should always include this important stage.
It’s easy to get distracted by the findings of the survey and either forget, or forgo , sharing results but that would be a mistake because it really can make an impact. Putting together a ‘Feedback Plan’ is time well spent.
FEEDING BACK TO STAFF It is important to let staff know about the survey, not just the findings once the survey has finished but when it is happening and how it is progressing. • It can be embarrassing for the organisation, and staff, if customers know about the survey but staff do not. In our experience it is not unheard of for staff to hear about a survey, for the first time, from customers. This is particularly embarrassing if the survey is designed to gather information about specific staff performance (for example, an account manager). Keep staff informed and let them know what is happening. Customers are often ‘warmed up’ prior to being approached to take part in a survey. Make it a point to ‘warm up’ staff too. •W hen it comes to the results, staff are curious, they want to know what customers say – and if it tallies with what they are thinking themselves. It can motivate staff to discover that customers are satisfied with them and the organisation. Feedback from customers, in the form
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of scores or comments can be a valuable tool. Staff can be reassured to discover that they understand customers and that their opinions match those of customers. Equally, customer disappointment or frustration can spur staff on to improve performance or, with support, do things differently. • It motivates staff to know that their organisation cares about customers, has invested time and money in finding out what they think, and will be taking action in areas where customers want to see changes and improvements (it’s about ‘symbology’ to some extent). Any action may support staff by making their jobs easier. Also, satisfied customers can make work more enjoyable for staff with a customer facing role (and even improve staff attrition). • Tailor findings to suit staff – present the survey results in a way that really hits the spot with staff. For example, some staff like data and numbers, others prefer words and respond to hearing or seeing customer comments. Use a range of approaches if necessary. For example, presentations, 1-2-1s, intranet etc. Give staff the opportunity to discuss, question and challenge the results. When staff understand they are often more comfortable with the findings.
CUSTOMER
It is important to feed the results of the survey back to customers: • It is polite – customers have voluntarily given up their time to take part in the survey and they deserve not only to be thanked but to know what is happening with the information they gave you. If you can’t go back with an action plan quickly, still communicate with customers (with ‘holding’ information) – and let them know you’ll share full information with them at a later time. You must adhere to any dates you provide.
• Involving staff reaps benefits – they may play a key role in coming up with action plans and making improvements. They often come up with sensible, practical solutions to problems or improvements. As an added bonus staff very often come up with cheap ideas. Involving staff will gain their buy-in and make implementing changes easier.
CUSTOMER FEEDBACK It is important to feed survey results back to customers and we do advocate this. However, the message and the method of delivery need to be considered.
•C ustomers are often curious and actually want to know what is happening – they are also interested in finding out what other customers said. They genuinely want to know what the survey told you and how you have interpreted the feedback. • I t increases satisfaction – if you make changes based on the survey results, customers may not notice unless you tell them. It takes a long time for customers to register any improvements that you make. In order to speed up this process (and increase your satisfaction scores), it is essential to let customers know what you have done. • Increasing customers’ satisfaction in one area, by highlighting it, can benefit you as it leads to a halo effect where
customers automatically feel better about other things you do too. This is why we often recommend making a small number of big changes, that make a difference, rather than numerous incremental changes. • It helps customers understand you. There may be things that you cannot improve. If you explain to customers what you can/can’t do this will strengthen customers’ bond with you. Customers may be more forgiving if they have a greater understanding of what is and isn’t under your control. • PR – sharing results is a good PR exercise. It brings you and your customers closer together which is never a bad thing! It may win you new customers. • Sharing survey results encourages customers to take part when the survey runs again. They can see that, ultimately they will benefit by taking part. • Be aware of the Market Research Society Code – when sharing feedback bear in mind that customers will have been promised a degree of anonymity in accordance with the MRS Code of Conduct. Customer feedback is gathered only for research purposes and not for promotional reasons so individual scores should not be shared and customers should not be named.
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• How should you share the message? A time poor, eco conscious customer who already receives too much paper – does not want to receive a wordy leaflet with irrelevant info. • How honest should you be? Customers know what your weaknesses are, you can’t pull the wool over their eyes. Decide how open (and honest) to be. • Importance – we don’t usually recommend sharing this as it is useful to competitors although you can refer to understanding what matters.
IMPORTANT CONSIDERATIONS When deciding the most effective way to feed back results, there are things to consider: • How well do you actually perform? A customer who is not experiencing great service will be irritated if you promote how well you perform. There is nothing to be gained from fudging the results and claiming success where it doesn’t exist. • How much should you give away? Bear in mind your competitors will probably find out what you are telling customers. Consider what information is genuinely sensitive.
• Givens - customers are not going to be impressed if you tell them how accurately you process their transactions – you are supposed to do that anyway. • Differentiators – customers are not going to be impressed by an organisation performing differentiators well, if you do not perform the basics well. For example, Amazon providing free delivery would mean little if the products were rarely in stock. • Weaknesses/improvements – if your performance is weak, be careful how you share this with customers. You can tell them you recognise you perform better in some areas than others and you are working on this. • Action – tell customers what action you are taking but do not tell customers you are taking action, if you are not.
• What markets do you operate in? A business will feed results back to business customers (B2B) in a very different way from a business reporting back to consumers (B2C). • Business-to-business markets are often smaller and competitors know more about each other. It is more difficult to move from one supplier to another. • Business customers are more inclined to read detailed literature (but not always). This may include more detailed statistics. • Some business customer may be extremely valuable. Sharing results personally can be effective. • Consumers tend to respond to shorter, powerful messages. 18
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
HOW CAN YOU FEED RESULTS BACK TO CUSTOMERS? There are a range of communication methods at your disposal to feed survey results/actions back to customers: 1) Leaflets / posters / letters 2) Newsletters 3) Internet & intranet (including videos and clips) 4) Word of mouth 5) Answer phone messages 6) Email signatures 7) People 8) Press releases 9) Social media 10) Events • Leaflets – creating a feedback leaflet that you can send to customers is a useful way of feeding back results. It enables you to gather together the information you want to share in one place. You can control what you feed back and where you place the emphasis. You can print leaflets or add to your website for downloading. • Newsletters – use your customers’ newsletter as a way of sharing your survey results. • Internet & Intranet (including videos and clips) – feedback can be shared with customers and staff efficiently using technology. The format can be as simple or complicated as you choose – from a strap line on the home page, a downloadable pdf to a short video recorded by the CEO (this is becoming more commonplace) and posted on YouTube. Everyday devices such as iPhones include surprisingly effective recording functions. • Posters – if you have premises that are visited by customers you may decide to print posters promoting your survey results – emphasising what you are good at and changes you are making as a result of their feedback. • Word of mouth – make sure that staff are aware of the survey results and use conversations with customers as a tool for spreading the word. For example, if a member of staff answers the phone quickly and a customer comments on this – staff can say ‘thank you’ e.g. “when we conducted our survey, customers told us we answered the phone quickly
– it’s great you think that”. Or, when a customer is unhappy “we appreciate we could be a bit better. It is something we are working hard to improve”.
• Events – road shows or open days provide a great opportunity for sharing information with customers. Piggy backing other company events can be cost-effective.
•A nswer machine messages – you may have an answer phone message / holding message when customers call. This can be a useful tool for sharing information about results or action you are going to take.
You can tailor the message you feed back to customers. However, it is sensible to cover:
• E mail signatures – a corporate email signature can easily be modified to include a bi-line reminding customers of awards and successes.
•W hy you did a survey - who was interviewed, when and how (a brief outline of the ‘mechanics’). This gives the findings of the survey credibility.
• In staff and customer areas, ‘people’ – life size cut outs featuring positive customer comments can be a strong visual aid for sharing what customers have said in the course of the survey. Speech bubbles are useful and versatile.
• Summary of the findings – you do not need to share a great detail but it makes sense to emphasise what customers are happy with (‘we were delighted that you told us you are happy with our staff’) and acknowledge your weaknesses (‘we recognise there are some areas where we could be better’). Be sure to tailor your message to the audience – some customers will expect technical details and data, others will prefer a more abbreviated approach.
WHAT TO TELL CUSTOMERS:
• Action you are going to take – customers want to know what is happening based on their feedback. Be sure to tell customers what you have done and what you are going to do. Some things take longer than others and it might be sensible to give timelines in some cases (as long as you are able to meet them, that is). It might also be relevant to explain what you can’t do.
• Be honest and if you say you are taking action make sure you do. Hollow promises will reflect badly on your organisation. However, actually taking action will prove to customers that you listen to what they tell you. It may also help you hold on to customers who were considering removing their business.
FEEDBACK PLAN: Essentially, your feedback plan needs to take into account: • Who are you going to share feedback with? Ideally, you will feed back to all customers. • What action are you going to take? The key message is that you are taking action based on feedback. • What are you going to tell customers? You need to be honest and positive. • How are you going to reach customers? You will need to employ a range of techniques. • When are you going to tell customers? Aim to share the findings soon after the survey. Talk to your Client Manager about how TLF can help you plan your feedback campaign.
•W hen you are going to survey again customers are more likely to take part. Response rates should improve. •P ress releases – if you are good at something, use a press release to let the world know (e.g. national press, trade organisations etc). Think carefully about where to send this – be selective and make sure it’s appropriate. Whilst you can be selective with your subject matter, you do have to be honest and ensure that statistical declarations are correct. This includes referencing the data source. • S ocial media – a short and poignant message can be an effective way of sharing news with customers. Social media is versatile, quick and a relatively cheap way of reaching customers.
KEY POINTS: • Feed back results as soon as possible after the survey has finished. Results need to be shared whilst they are relevant. • Feed results back to all customers, not just those who took part in the survey. Why should survey action only be shared with customers who took part? It makes sense to let all your customers know that you take their feedback seriously and that you are taking action. This approach will encourage customers who refused to take part, or who have hesitated to give feedback, confidence in the survey process and your organisation.
Rachel Allen Client Manager TLF Research rachelallen@leadershipfactor.com
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RESEARCH
storytelling maximising the impact of customer research
Research has been commissioned and insight identified but getting individuals to change their behaviours in order to produce an improved customer experience has proven to be more difficult. Does this scenario sound familiar? Experience has shown that ‘Storytelling’ can be an extremely useful tool for organisations to maximise the impact of customer research. Within this article we aim to highlight some specific examples, targeted at various stakeholder groups that have proven to be successful in increasing employees’ empathy with the customer.
CUSTOMER EMPATHY DISCUSSION GROUPS Employees are often more inclined to empathise with an individual customer experience or story than they would with the summation of multiple experiences detailed in a PowerPoint graph. Making the message personal can be a hugely impactful way of communicating to the organisation’s people. With themed discussion groups customers are recruited who have undergone a particular customer experience. The group is then facilitated in such a manner as to identify the individual impact of that experience. For instance highlighting any disruption caused, how the experience made the customer feel
and their subsequent opinion of the organisation. To be most effective these groups should be held in a purpose built venue that enables key stakeholders from the organisation to see, hear and feel the customer’s reaction first hand. These groups are not aimed at identifying areas of poor performance, the customer survey insight has already done this. Instead their purpose is to bring the customer into the organisation in a way that helps key stakeholders empathise and form an ‘emotional connection’ with the customer.
FILMED VOX POPS There is obviously a limit to how many individuals can attend a discussion group and in a large contact centre environment for example the vast majority of employees will never be able to hear these stories first hand. Experience has shown that the most powerful outputs from discussion groups are those where customers with compelling stories recount their experiences via a filmed Vox Pop. These short films can be used individually or combined into a montage to be used in staff training and customer engagement activity.
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RESEARCH
CUSTOMER JOURNEYS Like the Vox Pops, case studies of customers’ experiences can be used to reinforce best practice and change behaviours. Again greater empathy can be gained through concentrating on the individual customer using real experiences. In order to generate the greatest impact it is important to use creative design to ensure this output looks and feels different to the majority of reports generated throughout the organisation. As well as being visual Customer Journeys must highlight the key touchpoints and divide them into Moments of Magic, where staff can delight customers and Moments of Misery where they can upset and potentially lose them.
FILM Film is obviously amongst the most effective communication media and can be distributed to employees much more easily than in the past. Production costs have also reduced to enable the medium to be used more frequently within an organisation’s communication ‘tool box’. A simple and easily created example would be to use the most compelling comments from recorded telephone
interviews as source material set against an animated or filmed backdrop. On the more traditional end of the spectrum customers can be interviewed in their home to produce a specific case study. In both cases including an introduction to the film by the Chief Executive would help set the scene and make it easy for the final output to be used within training and engagement programmes. As with the discussion groups experience has shown that focusing on personal disruption together with the customers’ feelings and emotions will create the most engaging content.
CUSTOMER IMMERSION BRIEFINGS All the creative material described can be brought together to maximum effect within a Customer Immersion Briefing. These sessions can become the launch pad for driving a step change in an organisation’s customer centricity. Films or Vox Pops (ideally with an introduction by the Chief Exec) combined with customer journeys and facilitated discussion will help employees to directly understand customers’ issues, clarify how they can make a difference and ultimately play a significant part in changing their attitudes and behaviours.
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CONFERENCE
15th annual customer satisfaction & loyalty conference Wednesday March 12th saw nearly 200 senior managers and customer insight professionals sampling some excellent chocolate chip cookies prior to the start of TLF’s 15th annual Customer Satisfaction and Loyalty Conference at The Institution of Civil Engineers’ head office in Westminster. One Great George St is a magnificent Grade II listed, four-domed, Edwardian building. In its splendid interior guests are constantly reminded about a host of famous engineers with rooms dedicated to Smeaton, (John Smeaton, 1724-1792, was the first to label himself as a Civil Engineer), Stephenson, Brunel, Telford, Rennie and many others. On a lighter note it was also used as a venue for filming Gandhi, Reds, Bridget Jones and even Mr Bean!
FIGURE 1: CUSTOMER SATISFACTION DRIVES RECOMMENDATION
DOES CUSTOMER SATISFACTION PAY?
60%
56%
50%
% OF CUSTOMERS THAT HAVE RECOMMENDED THE ORGANISATION 40%
40% 29%
30%
20%
17% 13% 9%
10% 3% 0%
22
1-1.9
3%
4%
2-2.9 3-3.9 4-4.9 5-5.9 6-6.9 7-7.9 8-8.9 CUSTOMER’S SATISFACTION RATING (1-10 SCALE)
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
9-10
In his introduction, Greg Roche, a Director at TLF, reviewed some of the evidence underlining the financial benefits of customer satisfaction. Based on UK Customer Satisfaction Index (UKCSI) data (which TLF produces for the Institute of Customer Service), there is a very strong link between customer satisfaction and recommendation, as shown in Figure 1. And, unlike NPS, this isn’t based on a weak outcome like willingness to recommend but hard behavioural ‘have actually recommended’ outcomes. Customer satisfaction also has a strong relationship with hard financial outcomes such as sales and market share. Figure 2 shows how customer satisfaction and sales growth have gone hand in hand in the nonfood segment of the retail market.
FIGURE 2: RETAILERS SELL MORE TO SATISFIED CUSTOMERS
CONFERENCE
95%
AMAZON
90%
MARKS & SPENCER
85%
BOOTS
JOHN LEWIS
SUPERDRUG
FIGURE 4: LOW CUSTOMER SATISFACTION MEANS MORE COMPLAINTS
DEBENHAMS HOMEBASE
ARGOS
When organisations consider customer satisfaction is profitable they tend to under-estimate or even ignore the cost side of the equation. Every time a customer interacts with a company there is a cost and this can be quantified. Dissatisfied customers always cost more to service. At its most extreme, this is reflected in the cost of handling problems and complaints. Figure 4 shows a very strong relationship between customer dissatisfaction and problems/complaints in the telecoms sector.
MATALAN
25%
80%
TALK TALK
HMV
23%
VIRGIN MEDIA
PRIMARK
21%
75%
WH SMITH
T-MOBILE
3
19% COMET
CARPHONE WAREHOUSE
70%
BT
17%
CURRYS/DIXONS/PC WORLD
SKY
15%
65% -20%
-10%
0% SALES GROWTH
10%
20%
EE (EVERYTHING EVERYWHERE)
O2
13% VODAFONE
11%
Figure 3 shows how the positive relationship between customer satisfaction and sales also drives market share changes in food retailing.
9% GIFFGAFF
7% TESCO MOBILE
FIGURE 3: HIGH CUSTOMER SATISFACTION AND MARKET SHARE GROWTH
5% 65
0.6%
70
75 80 CUSTOMER SATISFACTION
ALDI
90
Of course, all companies are interested in their bottom line. If customer satisfaction pays it has to make them more profitable. For publicly quoted companies there is a very visible indicator of this. Over the long term their share price is driven by their profitability. So do PLCs that are more successful at satisfying their customers perform better on the stock market than those with less satisfied customers? Based on five years of UKCSI and London Stock Market data the answer is shown very clearly in Figure 5.
0.4%
0.2% LIDL
0%
85
TESCO
FIGURE 5: CUSTOMER SATISFACTION IS GOOD FOR YOUR SHARE PRICE SAINSBURY’S
-0.2%
ABOVE AVERAGE CSI
ASDA
THE CO-OPERATIVE FOOD
£179 17.9% GAIN
-0.4% BELOW AVERAGE CSI
-0.6% 75%
-£18 1.8% LOSS
MORRISONS
80%
85% CSI
90% -£50
£0
£50
£100
£150
£200
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CONFERENCE
As Greg pointed out at the conference, if you’re still not convinced by this evidence there is another way of looking at it. If you don’t believe that customer satisfaction pays, why not reduce your investment in it? Why not drastically reduce the headcount in your contact centres, or sub-contract it to the lowest quote you can get from India? If it doesn’t pay it surely wouldn’t matter if customers had to wait much longer to be connected, if advisors were on strict limits on time spent per call, if customers couldn’t understand what your overseas advisors were saying or if customers weren’t kept informed when promised. If customer satisfaction doesn’t pay, why not save money by lowering all service levels? Increase the time window for delivery, carrying out repairs, making home visits or handling claims. Make it more difficult for customers to complain and if they do successfully navigate the system give yourself longer to respond to complaints. If you’re lucky some of them will give up so you won’t need as many staff to handle them. Run staff workshops to brainstorm ideas for saving money on customer satisfaction with prizes for the best suggestions. For anyone who doesn’t believe that customer satisfaction pays, all of the above would be implemented immediately. Unless, of course, you think that customer dissatisfaction might cost.
CUSTOMER SATISFACTION TO SHAREHOLDER SATISFACION This was the title of the talk given by Jon Tobell, the Sales and Marketing Director of Northgate plc, the market leader in light van hire in the UK. It was only in 2012 that the company consolidated 31 local vehicle hire names (acquisitions over the years) into the Northgate brand. As part of its new strategy the company commissioned TLF
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Research to measure customer satisfaction across its three segments – national accounts, regional SME accounts and B2C cash customers. According to Jon, it was only after the survey that “we really understood our customers for the first time”. The research delivered the four customer insights on which Northgate’s whole business strategy is now based. • Financial flexibility. Reduced balance sheet exposure and greater flexibility for allocating cash is still an important reason for commercial vehicle hire but had previously been seen by Northgate as the overwhelming driver for corporate accounts. • Hassle free. What Northgate hadn’t previously understood was how much value companies placed on hassle free fleet management. For companies with large fleets the ownership model carries a significant amount of organisational, legal and administrative hassle – all of which costs money and carries risk. • Uptime. This was the most important new insight and has now become the guiding principle for the whole company. Customers make money from their vehicles always being on the road and lose money when they’re not. This led to the development of Northgate’s mission statement which is now the rallying cry for the whole company. ”We provide mission critical vehicles for our customers.” Mission critical is defined as 100% availability, 0% disruption.
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
• Commoditised. Light commercial vehicle hire was seen by customers as a commoditised market with little differentiation between competitors. Northgate therefore resolved to use its new customer insights to differentiate itself through service and, in particular, position itself as the supplier that customers can trust. This led to the development of Northgate’s service-focused vision as shown in Figure 6. It’s one thing having a vision it’s another implementing it. For this the ‘mission critical’ rallying cry was the starting point. Staff motivation was further strengthened by introducing a customer satisfaction bonus for all staff right down to branch level. With a good sample size, results were available at branch level so everyone throughout the company could see the effects of their own actions and behaviours. Each layer of management explained to their reports how the surveys worked and how to interpret the results. This culminated in Branch Managers explaining this to their staff and holding weekly meetings on how to improve customer satisfaction, with their own customer comments, priorities for improvement and scores stuck on the kitchen wall. All of this galvanised employees and made them 100% focused on earning that bonus. And it worked. Since the first customer satisfaction survey, Northgate’s customer satisfaction and NPS have increased significantly. And so have returns to shareholders. From 5% year on year declining sales previously, sales growth is now running at 10% per annum. And the acid test – from £1.60 in June 2012, Northgate’s share price is £5.50 at the time of writing this article.
CONFERENCE
FIGURE 6: NORTHGATE’S VISION OUR PURPOSE Making it possible for our customers to increase and decrease their fleets easily, without financial penalties or the hassle of ownership, so they can focus on managing their business OUR AMBITION To be the first choice for any business needing an LCV in the UK TO ACHIEVE THIS, WE WILL
Get vehicles to you quicker
Keep you on the road longer
Fix issues faster
Hassle free, flexible rental from the company you can trust
THINGS YOU CAN LEARN FROM A CUSTOMER SURVEY British Gymnastics is the National Governing Body for the sport in the UK. Its members are 1,200 clubs and 230,000 individuals. You might have thought that basking in the Olympic legacy of the most gymnastics medals in living memory nothing needed changing. However, in 2012 British Gymnastics undertook a re-branding exercise, the new “more than a sport” tagline encapsulating the transition from an organisation focused mainly on elite athletes and winning medals to one that places much greater emphasis on participation. The next step was appointing to conduct a customer survey to understand how the organisation could retain customers for longer, increase their involvement in the
sport, boost recommendation and continue to build the British Gymnastics’ brand. According to Mark Gannon Executive Director of Business Development for British Gymnastics the insights delivered by the survey had a huge impact on the organisation, overturning many of its previously held assumptions about what was important to its members and how they perceived their governing body. In particular it made them realise that it wasn’t enough to help elite gymnasts win medals. With activities such as GymFit, dance and aerobic gymnastics driving membership growth the survey highlighted the fact that British Gymnastics needed to listen more to
clubs and understand their unique needs. Most participants will never be an elite athlete and only a tiny proportion of the 1,200 clubs have medal winners amongst their members. In reality, clubs have differing priorities, and this has resulted in British Gymnastics segmenting its clubs to reflect this. Above all the survey highlighted the importance of service and, especially customer effort. British Gymnastics had simply been too difficult to deal with so is now re-assessing the whole mission of the organisation to have less emphasis on ‘more medals more members’ and much more emphasis on customer service. According to Mark Gannon, “it made us realise that we need to have the customer at the heart of our business”.
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CONFERENCE
QUESTIONNAIRES SHOULD REFLECT HOW CUSTOMERS THINK The purpose of investing in customer surveys is to better understand customers’ perceptions of your company so that you can implement actions that will stimulate the kind of customer behaviours you want – whether that’s buying more, recommending you, using less costly channels for service etc. Consequently, you want the output from the survey to reflect as accurately as possible exactly how customers think and feel. To achieve that you need to think about how people make judgements. Very broadly speaking there are two types of decision making – satisficing and optimising. In simple terms you can think of satisficing as the lazy person’s approach. Don’t waste too much time and effort thinking about it, just make a quick gut feel decision. By contrast, optimisers spend ages agonising over each decision. Whether it’s deciding in a restaurant what to order from the always too many choices on the menu or what satisfaction score to give when answering a survey question, they take into account all the variables as well as the consequences of different
decisions. Whilst most people innately tend towards one type or the other, most people utilise both approaches in different circumstances. The more important a decision or the more interested they are in the subject, the more they are likely to adopt optimising behaviour. So what does this mean for questionnaires? Since answering survey questions is not usually the most important or most interesting activity for most people there is a tendency for them to adopt a satisficing approach to answering the questions. If the aim is to replicate the customer’s thought process when they make that decision in the real world, it is good if some answers are immediate, gut feel, satisficing responses. For example, most people don’t spend too long in the real world deciding which supermarket they will use today for their weekly shop, an answer to a survey question about the respondent’s preferred supermarket is fine. However, some survey questions like some real world decisions benefit from a little more thought and you don’t want
ARE YOU A RISK TAKER?
respondents to be too satisficing – saying anything just to get the survey finished. The most obvious mistake here is to make questionnaires too long. Ten minutes is ideal for a maximum with fifteen as the absolute maximum. Any longer and respondents will start to give any answer as long as it’s quick just to get the survey over with. The best approach to questionnaire design is to be very clear about the purpose of the survey. For some surveys, such as a general, strategic survey or brand surveys, broad brush, satisficing answers are exactly what you want. These surveys can be a little longer and can accommodate more attitudinal and open questions. For specific, recent, transactional surveys you want the answers to be very factual as they will often be used to give specific feedback to customer facing teams and perhaps make operational changes. Such questionnaires need precise, mainly closed questions and should be short, with ten minutes an absolute maximum.
FIGURE 8: 3 TYPES OF RISK
The afternoon session at the conference involved a very thought provoking talk and workshop by Casper Berry, film maker turned professional poker player, about people’s approach to risk. It transpires that for those who live and work on the tables in Las Vegas rather than visit for one evening on holiday, poker is not a risky activity. It all boils down to fairly simple probabilities. As do most decisions. But, like the poker table, people don’t see it like that. As shown in Figure 7, most decisions can be distilled to a fairly straight forward risk-reward equation.
FIGURE 7: RISKY DECISIONS?
HITS AND MISSES
J CURVES
GAME CHANGERS
HIGH
500% Good Risk
400% 300% 200% 100%
Bad Risk
0%
LOW
25%
50%
75%
HIGH
How likely is this one to work? What do I think?
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customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
100%
To help people decide where on the risk curve a particular decision might lie, Casper explained the three categories of risk shown in Figure 8. Hits and misses what most of us call a number game. Like poker, if you look at the wins and losses over a period of time, the success rate becomes predictable. If the probabilities are favourable, you have to ignore short term setbacks, however disappointing or costly because you know the long term odds are in your favour. Game changers are towards the top left of the chart. If you can afford to, it is sensible to pursue a game changing goal even if the chances of success are quite low. J curves require some initial investment, which could be cash, time or emotion, but will have a reasonably predictable return if you persevere.
The 14th Annual Financial Services
COMPLAINTS MANAGEMENT|Forum Regulatory Guidance, Industry Case Studies and Practical Guidance in Complaints Management for Financial Services
Conference Complaints Management Forum 24-25 February 2015 - Central London
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Pre Conference Workshop Complaints Handling In Practice 23 February 2015 - Central London
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CASE STUDY
advertising perceptions research WDMP, London’s leading independent direct, digital social agency, produce integrated and below the line campaigns for leading brands across a range of sectors. WDMP were keen to understand public perceptions of a proposed Direct Response TV campaign for a leading vehicle finance company. They have a specific target audience and WDMP needed to obtain opinions from this target audience about the appeal of alternative TV advertising campaigns. Working with the TLF panel, target demographics and consumer profiles were produced, to ensure that the ads were tested on exactly the right market segment. The quotas were based on age, gender, geography, socio-economic grouping and propensity to use car finance. Using the TLF Panel, 900 people who matched the target profile were recruited as a sample. WDMP had produced 3 different TV advertisements, and wanted to see which advert people preferred and why. The total sample was split into 3 groups and each group was invited to watch a different proposed TV advert. WDMP produced story board films with voiceovers and music accompaniment. These films were hosted on the TLF Panel website and each sample group was invited to watch the storyboard twice then answer 28
THE RESULTS OF THE RESEARCH IDENTIFIED A CLEAR ‘FAVOURITE’ ADVERT AND PROVIDED EXPLANATIONS INTO WHY PEOPLE PREFERRED THE WINNING AD questions about the advert and provide opinions on it. Questions were based around likelihood to distract, likelihood to remember, word association, how the advert made people feel, which bits of the advert did people like / dislike and what attributes they felt the advert had. As each sample group only
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
watched one advert, this meant they weren’t swayed by the other adverts and results weren’t influenced by people making comparisons with the other storyboards. The results of the research identified a clear ‘favourite’ advert and provided explanations into why people preferred the winning ad rather than the two less popular ones. It also provided useful initial insight to WDMP’s client as feedback highlighted how people perceived the company based on the content they had viewed. The research results were presented to their client by WDMP to support their creative recommendation, and to forecast consumer reactions to the proposed campaign. The research also informed further refinement of the creative content to maximise its impact.
CASE STUDY
Monarch Airlines was formed in 1967 and began commercial operations on 5 April 1968 with a charter flight from Luton to Madrid using a second hand Bristol 175 Britannia 300 turboprop plane. Based at Luton and flying from half a dozen UK airports, it now operates scheduled flights to over 50 destinations, mainly around the Mediterranean. Monarch also flies long haul to Orlando, Tobago and Goa and medium haul to the Canaries, Egypt and The Gambia.
In 1972, the airline carried 500,000 passengers in one year for the first time, a million in 1981 and two million in 1988. In 2008 the airline reversed its emphasis on charter flights and 80% of its flights are now scheduled. In 2013 it carried over six million passengers per annum and had 3,300 employees employed across the airline, tour operator and engineering divisions. Monarch were also a finalist for the 2014 TTG awards ‘Airline of the year’. Ask a group of people who have taken a flight in the last 3 months to tell you about their experience and you’ll no doubt get a real mixed bag of responses, from exceptional to truly dreadful and everything in between. So how do individual airlines compare? What things do some airlines do very well, and others do really badly, and why? This was something Monarch Airlines were keen to understand. Monarch Airlines have their own Customer Satisfaction Survey, asking customers to rate their satisfaction on a 10-point numerical scale for 26 individual criteria. They ask customers about everything from searching for flights through to post-flight customer service follow-up. Monarch also use Feefo to ask customers to rate their experience. This is a two stage process and customers can rate their booking experience and their flight experience so Monarch get a clear picture of how
they perform on the ground and in the air. Monarch currently obtains 80,000 reviews and maintain a 92% satisfaction rating. Whilst Monarch have an extremely clear picture of what customers think of them, they were unsure as to how non-customers perceive competitor airlines. Therefore the research objective was to understand how satisfied non-customers are with competing airlines across the same 26 customer requirements measured in the Monarch customer satisfaction surveys. Utilising the TLF Panel, we sourced a representative sample of 1000 UK adults who had taken a flight in the last 12 months, and asked them to rate their last experience. After asking which airline they flew with and when, respondents were asked to score their satisfaction with the airline across all 26 criteria. From the sample, some airlines obviously featured more prominently than others. BA, easyJet, RyanAir, Thomas Cook, Thomson and Virgin all obtaining larger sample sizes. Other less popular airlines obtained smaller sample sizes. A number of respondents also cited Monarch as the airline they most recently flew with. In addition to obtaining numerical satisfaction scores, respondents also provided detailed text comments to describe their
experience of dealing with that particular airline. One thing people are very happy to talk about is a good or bad experience with an airline! The satisfaction scores for competitor airlines allowed Monarch to overlay this data onto their own, producing ‘Customer Journey Maps’ for different airlines, and see exactly where competitors under and over perform compared with Monarch. The final report and analysis was produced quickly – within 3 weeks of initial project discussions. It provided Monarch with some vital insight into how they perform and are perceived by customers compared with competitors.
Darren Wake Business Development Manager TLF Research 01484 467012 darrenwake@leadershipfactor.com
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CASE STUDY
pangaea laboratories product testing research Pangaea Laboratories manufacture high-end personal care products. They produce a variety of products for men and women designed to reduce the signs of ageing and provide smoother and younger looking skin. Specifically their product range includes cleansers, moisturisers and serums. These products are regarded as high-end and used by skin care professionals when dealing with clients. One particular product they have developed and marketed is the Medik8 Anti-Ageing Serum, designed to be used alongside a daily moisturiser to reveal younger looking skin. Pangaea were keen to obtain the views and opinions of women who were using this product over a period of time, so wished to commission a piece of product perception research.
“MEDIK8 ANTI AGEING SERUM HAS REALLY IMPROVED MY SKIN. IT BLENDS IN REALLY EASILY AND IS SO LIGHT AND DOESN'T LEAVE ANY RESIDUE OR GREASE - IT’S THE LIGHTEST THING I HAVE HAD ON MY FACE/SKIN - AMAZING RESULTS”
Using the TLF Panel, 200 women aged between 35 and 50, who were concerned about skin ageing, were recruited to use the product over a period of time and provide
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feedback on an on-going basis. The 200 recruits were mailed the product along with usage protocol and a schedule for the programme. After 2 weeks of using the product, respondents were asked to complete an online survey, providing their views and opinions. In addition to answering closed and open questions, some respondents were also asked to provide a video of their views. This data collection process occurred again after 4 and 6 weeks of product usage. After each fortnightly round of data collection (survey responses plus video opinions) results were reported back to Pangaea. Panellists were delighted to be involved in the project, receiving a highend beauty product, worth £70, and being asked for their opinions on it. Also 30% of respondents were willing to record and upload a video diary of their views. The results of the study were very interesting, with most respondents rating the product very highly. Over two-thirds would
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
use the product again and the vast majority of respondents would recommend the product to others. The results of the study are to be used in Pangaea’s marketing and PR materials, as well as providing some vital insight to help with future product development. Video diaries really helped bring the research to life, showing real women’s opinions and thoughts of the product on an ongoing basis. This was particularly interesting as the videos showed opinions after a usage period and also after 6 weeks of use. “It’s fantastic - my husband (who was unaware I was using the product) asked if I’d had Botox!!” “My teenage daughter has actually complimented me on how young my skin looks! She said all other mums look older” “Two people have made comments about my skin and lack of wrinkles and this has really boosted my confidence.”
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Who has improved most over the last 6 months What the links are from customer service to loyalty, trust, and recommendation How your sector differs from the UK average How much performance varies for each question The long term trend for your sector (back to January 2009) NPS and Customer Effort scores for each organisation How satisfaction varies by customer type and channel Data on the sector’s complaint handling performance
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Rackspace® (NYSE: RAX) is the open cloud company and founder of OpenStack, the standard opensource operating system for cloud computing. Headquartered in San Antonio, with data centres on four continents and offices across the globe, Rackspace delivers its renowned Fanatical Support® to more than 205,000 business customers. Rackspace is a leading provider of hybrid cloud, which enables businesses to run their workloads where they run most effectively — whether on the public cloud, a private cloud, dedicated servers, or a combination of these platforms. Zuzana Bielikova, European Communications Manager for Rackspace, takes up the story.
FANATICAL SUPPORT Service that goes above and beyond for customers is what separates us from our competitors. It is such a fundamental part of who we are and what we do that we trademarked it, Fanatical Support®. Fanatical Support is about more than just service: it’s working hard 24x7x365 to support our customers. Our driving purpose is to take care of our customers’ businesses, to make sure things go as smoothly as possible. It means that we never charge for customers to call us, and it means that a real person will always answer the phone – no voicemail or automated menus!
FINDING THE RIGHT PEOPLE Finding the right employees (Rackers) is absolutely essential to maintaining our culture, and it is our first step in continuing to deliver Fanatical Support to customers. Making sure that we continue to employ the right kind of people can be a challenge, so we don’t leave it up to chance. Nobody knows the talents and skills we’re looking for in new employees more than Rackers.
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Applicants that have been referred by other Rackers are about four times more likely to be hired than general applicants. Rackers know who we’re looking for! It’s not easy to find people who live for customer service and understand geek speak, but our talent scouts use their keen sense, combined with specialised search engines and a broad network throughout the IT industry to find the right people.
our very best to keep this attitude and approach at the forefront of every Racker’s mind and have these standards on the walls at every one of our office locations. Rackers who best exhibit these Core Values in their work are rewarded, as discussed below.
DEVELOPMENT
1) Fanatical support in all we do
We offer several formal and informal opportunities for Rackers to develop new talents and sharpen their strengths for personal and professional development. All of which results in Rackers being equipped with the precise strengths and skills that they need to provide Fanatical Support to our customers.
2) Results first, substance over flash
EXPERTISE AND RECOGNITION
3) Full disclosure and transparency
The first Core Value, Fanatical Support in all we do, truly is the core of what we do here. That’s why we have the Fanatical Jacket award – the most coveted award at Rackspace. This jacket is awarded once a month to an employee that has gone above and beyond to provide Fanatical Support to our customers. It has become an icon of our culture. Recognising employee achievement is so important to our company that
CORE VALUES At Rackspace we have six Core Values that we take very seriously:
4) Passion for our work 5) Comitted to greatness 6) Treat Rackers like friends and family Every Racker knows what these values are, and lives by them every day. We do
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
CASE STUDY
we award it in front of the new hires, so they can see what they should aspire to be. The winning Racker is literally strapped into the straitjacket on stage for all to see as a senior leader describes the phenomenal work the Racker has done for our customers. The award is both a time for celebration and a symbol of respect. The Fanatical Jacket means so much because Rackers are the ones nominating their peers to receive it. Engagement is key to the success of Rackers. Happy Rackers participating in work that they love to do means our customers are supported fanatically.
UNIQUE APPROACH TO SUPPORT Rackspace customers are a hugely varied group – from start-up companies to massive global enterprises. We recognise that different types of customers require different levels of support from us. Our Support teams are segmented into SMB (Small to Medium Businesses) and Enterprise (customers with over £100million annual turnover). Both have specific support offerings suited to customers’ needs for redundancy, security, scalability and tech support. We also offer specific solution offerings and related support depending on business industry need: a retail customer will have significantly different requirements to a digital agency, e-commerce site or public sector organisation. We structure our support teams and account teams to be able to flex to the needs of customers at all times.
Finally, for customers that may be unfamiliar with the latest cloud technologies and how to get the most out of them, the Customer Success team guides them through their first days using the Rackspace Cloud. Depending on needs and requirements, Onboarding and Retention experts engage customers to make their time with Rackspace as productive as possible. Whether they require a walkthrough of the customer portal or in-depth solution advice, the Rackspace Customer Success team facilitates free, fast and direct access to relevant experts on the Rackspace product portfolio. These include Product Specialists, Cloud Mentors, Business Development Consultants and Service Delivery Managers.
THE FANATICAL SUPPORT PROMISE Fanatical Support is so ingrained in who we are that we created the Fanatical Support Promise: although we can’t promise that hardware won’t break, that software won’t fail, we can promise that if something goes wrong for our customers we will rise to the occasion, take action, resolve the issue and accept responsibility. If one of our customers reasonably believes that we have failed to meet our five elements of Fanatical Support (Responsiveness, Ownership, Resourcefulness, Expertise and Transparency) then we have a dedicated three-step process to rectify the situation and make sure we take lessons-learned on board so that it never happens again.
improvement. That’s why we rely on the Net Promoter Score survey (NPS) to deep dive into how our customers think we are doing – whether that be where we are exceeding their expectations, or where we need to up our game. NPS is just one question (How likely are you to recommend Rackspace to your friends and colleagues?) which is rated on a scale of 1-10. Traditional metrics like revenue and market share tell companies when they’re growing, but they don’t necessarily tell whether customers and employees think a company is great. The reason that Rackspace sets great store by NPS is because it tells us if customers are willing to stake their reputation on our ability to deliver. If they are, then we’re delivering on our Fanatical Support commitment to them. If not, then we need to improve. NPS is a performance metric for our Service Delivery Managers (SDMs), who are also reviewed on the customers’ rates of response to the survey. This ensures that not only are we soliciting feedback, but that customer satisfaction is at the heart of everything our account teams do. Each customer’s response goes in to a closed-loop feedback process, and is dealt with by the account teams, before being
FEEDBACK We know that we have the right people in place with the right values and expertise to deliver great customer service. But we also know that there is always room for
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CASE STUDY
passed up to leadership who isolate recurring themes and incorporate them in to our overall strategy. All Rackspace employees get a random sampling of our customers’ NPS responses each month and our CEO, Lanham Napier, reads NPS responses daily. Lanham is a driver of NPS within Rackspace, and says that “Greatness is achieved when customers say we are great.” Fred Reichheld – the founder of the NPS metric and one of the world’s most respected loyalty experts – sits on the Rackspace Board of Directors, where he guides us on deepening customer loyalty by continually improving the service experience we provide.
EXTERNAL VALIDATION We were delighted to win the 2012 UK Customer Experience Award for IT and Telecoms. We were recognised as an outstanding leader among organisations who place customer service at the forefront of
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their commercial operation. One of the judges said: “This commitment to providing ‘Fanatical Support’ and exceeding customer expectations every single day is exactly what the Customer Experience awards are all about.” Don Hales, Chairman, Awards International said: “The Rackspace team is passionate about delivering a first class customer experience at every touch point.” Importantly, it is not just our company that is recognised for excellent customer service, but also individual Rackers. Warren Jonas was a finalist in the Customer Professional of the Year award category. His commitment to excellence and placing the customer at the centre of all he does is exemplary of the standard which all Rackers aspire to. Taylor Rhodes, Chief Customer Officer for Rackspace summed up just how much this kind of recognition for supporting our customers meant to Rackers when he said: “Our Rackers are dedicated to
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
providing the highest standard of service in every customer interaction. Clients around the globe trust us with their business-critical IT infrastructure, so we must put them and their business first every time. We see ourselves as an extension of our customers’ IT teams and we will go out of our way to make sure they receive the best support.” 2013 has been a great year for awards. We were placed 4th and 7th in the Great Places to Work and Best Companies to Work for surveys – a positioning that helps us attract and retain the best talent. Rackspace is a Texas-based cloud computing company with offices and data centres all over the world. They are regularly named in the top 100 companies to work for in the USA and the UK. Zuzana Bielikova is the European Communications Manager for Rackspace.
CUSTOMER
OMNI
CHA NNEL WHY IT’S TIME FOR CUSTOMER SERVICE TO GO OMNICHANNEL It’s well recognised that consumers are increasingly choosing to use many different communication channels when transacting with customers. A survey at the end of 2013 for CRM software specialists Zendesk of 7,000 consumers in 7 countries showed that 67% of online shoppers had made purchases that involved multiple channels in the previous six months. But of those, only 7% were extremely satisfied that brands provided a seamless, integrated and consistent customer service experience across channels. 87% of the sample said that brands must work harder to create a seamless omnichannel experience for customers and a surprisingly high 37% of respondents expected to be able to contact the same customer service rep, by name, regardless of the channel they used. How many companies are there where they can do that? Contacting the same person across all channels may seem like a big ask but it does emphasise how quickly customer expectations are going up. In the Zendesk research 69% of respondents said that they believed that customer service expectations are increasing every year.
Earlier this year American customer service technology firm [24]7 conducted similar research in the UK. Their Managing Director for European Operations, Nick Mitchell, takes up the story.
THE RESEARCH Working as a customer service or customer insight manager must feel at times like a really tough job. We’ve recently conducted research with TLF Research into customer service in both the financial services and utility industries and some of the findings revealed a whole host of customer service ‘pet hates’ most or all of which likely apply to all industries. Some of these issues included; companies not knowing who a customer is, despite having interacted with them previously; uninformed customer service agents unable to tell people the required information and the old chestnut, being left hanging on the phone for too long.
CHANGING CUSTOMER SERVICE EXPECTATIONS But our most recent survey of more than 2,000 UK consumers about utility customer service also showed that customer service expectations are changing and that utilities are starting to meet those changing
demands. The new Omnichannel customer service - defined as predictive experiences across channels, devices, location and time - is already starting to take hold. In the UK, 92% of UK consumers are using a variety of different channels, from voice to chat to online and mobile, to communicate with their utility provider’s customer service departments. According to Google research in August 2012, 90% of customers cross devices in pursuit of a single goal like shopping, managing finances, and planning travel whilst two-thirds of consumers surveyed by Google reported using smartphones and laptops simultaneously. So it is time for brands regardless of industry to take the next step on the omnichannel journey. They must make sure that consumers get the same quality of service every time they connect, irrespective of the channel they use. Businesses must also use the data they hold on their customers to predict intent and maintain the context of the situation so that customers can continue their interactions in a different channel, device, at a later time.
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CUSTOMER
THE MOST POPULAR WAYS TO INTERACT WITH CUSTOMER SERVICE Picking up the phone to speak to a utility provider was the most popular way to interact with customer service. But new channels are starting to grow in popularity and brands should be mindful of the requirement to maintain the context of the customer’s situation and deliver the same standard of customer service as they move to a different channel.
LANDLINE
66%
10%
SOCIAL MEDIA Social media is actually the fastest growing medium for customer service, especially amongst younger consumers. The figures for using Facebook and Twitter especially amongst 18-34 year olds, suggest that social media is a customer service channel that should not be ignored. Despite on-going media hype about apps and despite many utilities offering apps for customer service, only 5.6 per cent of those surveyed regularly used a downloaded customer service app on a smartphone or tablet.
USING BIG DATA TO MAINTAIN THE CUSTOMER’S CONTEXT What was particularly interesting about the research was the fact that around one in five people admitted to getting frustrated when their utility firms do not know who they are or what the context of their situation is, despite having communicated via another channel previously. Now if someone interacts over the phone to complete a goal, for example, make a change to their account, and the customer then goes online and there is no recognition of the previous call, no wonder people get frustrated. You can imagine that this issue isn’t limited to any single industry.
LIVE CHAT
22%
50% IN PERSON
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MOBILE
ONLINE
7%
15% CUSTOMER SERVICE APP
Another one in five would expect utility firms to know what they want based on previous contact they have had with them. Data is an incredibly powerful tool for any organisation to utilise and there is no question that most firms hold enough data on their customers to understand and predict intent and enable them to move seamlessly across a variety of channels, should they wish to do so. Simply put, customers today expect a seamless, intuitive experience – one that maintains continuity, connectivity and context across all channels to simplify their lives. That applies to pretty much every industry, not just the utility and financial services industries we focused our research on. It’s more than just offering your services over multiple channels. The differences between being a multichannel and omnichannel company are significant and apply to all of the components of your business. It’s not just a matter of semantics but an adjustment in capabilities, business strategy and philosophy. It’s about connecting the interactions across these channels to improve customer service. The repercussions of not doing so could be severe. Consumers are becoming less inert about changing providers and suppliers, so getting omnichannel right should be a priority for all businesses.
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
5%
Nick Mitchell is the Managing Director, EMEA at intuitive customer experience company, [24]7. Nick has a background of delivering IT supported transformation programs when he worked for organisations such as Logica and Andersen Consulting, while at [24]7 he works with some of Europe’s most prominent brands to deliver a more intuitive and omnichannel customer experience.
Nick Mitchell Managing Director, EMEA at [24]7 www.247-inc.com
BOOK REVIEW
race against the machine How the digital revolution is accelerating innovation, driving productivity and irreversibly transforming employment and the economy. Erik Brynjolfsson and Andrew McAfee
RACE AGAINST THE MACHINE
ANYONE FOR CHESS?
Based at the MIT Sloan School of Management, the authors are respectively Director and Associate Director at the MIT Centre for Digital Business. Both are experts on the rise of the digital economy with Brynjolfsson’s previous book titled ‘Wired for Innovation: How IT is Reshaping the Economy’. Interestingly, their original intention was to write a book about all the worldwide benefits that digital technologies have created. One of their first findings as they researched the field was that the more technology any industry had, the bigger the performance gaps as the leaders rapidly adopted new technology and raced ahead. In other words technology spawned losers as well as winners. As they researched further they discovered that as technology races ahead it widens the gaps between swift and slow individuals even more than between companies and that technology’s impact on employment was a neglected field in research and writing. Consequently they re-focused the book away from the benefits of the digital economy to its implications for employment and incomes now and in the future.
The analogy refers to a traditional story told about the inventor of the game of chess, who showed his creation to his country’s ruler. The emperor was so impressed by the game that he allowed the inventor to name his own reward. The inventor said he would like some rice with the quantity to be determined as follows. One grain of rice for the first square, two grains for the second square, four grains for the third and continuing to double for each of the subsequent squares. The emperor readily agreed to this seemingly modest request. However, when it comes to measure out the amount of rice it’s a different story. At first, the quantity builds up slowly, resulting in about one field’s worth after 32 squares. But once the amount is this large, continued doubling on the second half of the chessboard makes a dramatic impact, generating a pile of rice that would have been bigger than Mount Everest.
IMPACT OF TECHNOLOGY-DRIVEN CHANGE When did the population of working horses peak in the UK? 1791, 1831,
SIGNIFIGANT AS HARDWARE IMPROVEMENTS ARE, THEY ARE ACTUALLY DWARFED BY THE IMPACT OF SOFTWARE ADVANCES.
MOORE’S LAW 1861, 1881 or 1901? The answer is 1901, with a peak of 3.25 million. This seems rather late, but it’s because the impact of all technology-driven change accelerates exponentially. It makes a big difference only on the “second half of the chess board”.
Moore’s Law is just the same. In the first three or four decades after the publication of Moore’s 1965 article, computing power did keep doubling but not beyond all recognition. However, it’s now moving onto the second half of the chessboard. Significant as hardware improvements are, they are
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BOOK REVIEW
actually dwarfed by the impact of software advances. The authors quote a study by Martin Grotschel, who quantified advances in computers’ problem solving performance from 1988 to 2003. He calculated a 43 million fold improvement, but broke this down into processor speeds improving by a factor of 1,000 compared with a 43,000 fold improvement for algorithms / software.
IMPLICATIONS FOR THE FUTURE People now are like horses in the first part of the 20th century. Technology-driven changes to the world of work are now entering the second half of the chess board. There are three main implications:
investment has increasingly been focused on technology not labour. In the US, corporate profit as a share of GDP is at a 50 year high but spending on people as a share of GDP is at a 50 year low.
Brynjolfsson and McAfee’s recommendations for winning the Race Against The Machine are five-fold.
As these trends gather pace it isn’t only the least skilled who are affected. Computers are rapidly advancing into areas such as complex communication and advanced pattern recognition, displacing human labour from such highly skilled tasks as medical diagnoses, legal research and foreign language translation. And tests have conclusively shown the Google driverless car to be far safer then the human piloted alternative.
Invest in education including paying teachers more, holding them more accountable and extending tuition hours.
ONE
TWO Stimulate entrepreneurship through higher education, vocational training and drastically reduced regulatory barriers for new businesses.
THREE
• High versus low skilled workers As automation of tasks gathers pace routine tasks are increasingly being undertaken by hardware and software whilst opportunities for more complex tasks such as programming, management and marketing are increasing. Downward wage pressure for unskilled jobs will slow but not stop this trend. In 2011 Terry Gou, founder of Foxconn, announced his intention to introduce a million robots by 2014 to replace thousands of low skilled workers. • Superstars versus the rest Economists Frank and Cook have explained how technology has transformed music, software, sports and many other products that can be transmitted as digital bits, turning them into ‘winner take all’ markets’. Since 2002, the top 1% of US households have grabbed 65% of the financial benefits of growth in GDP. • Capital versus labour What makes most sense? Investing in capital or labour? When it was cheap and had no bargaining power the answer was labour, even during periods of strong technological advance such as the Industrial Revolution. Since World War II, big increases in the cost of labour, driven by stronger bargaining power, coupled with the effects of Moore’s Law, have completely reversed that equation. Since the onset of the recession
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COMPUTERS ARE RAPIDLY ADVANCING INTO AREAS SUCH AS COMPLEX COMMUNICATION AND ADVANCED PATTERN RECOGNITION, DISPLACING HUMAN LABOUR FROM SUCH HIGHLY SKILLED TASKS AS MEDICAL DIAGNOSIS, LEGAL RESEARCH AND FOREIGN LANGUAGE TRANSLATION
So what’s left for people? Anything involving ‘human’ characteristics such as empathy or emotions, e.g. counselling or social work. Jobs involving complex and especially unpredictable communication and decision making such as nursing, management and most professional services are still growing. And computers remain poor at creativity whether it’s cultural (writing or composing), aesthetic (architecture, fashion), or innovation (a new product or a new business). But if you really want to have a job for the future why not learn programming so you can help the machines to eliminate the last few areas where humans still retain the upper hand?
customerINSIGHT www.customer-insight.co.uk | Winter 2014/15
Encourage selective immigration through green cards for selected post graduate students, visas for highly skilled workers and founders’ visas for entrepreneurs.
FOUR Invest in much improved transport and communications infrastructure.
FIVE Increase research funding for technologyrelated R&D institutions.
Nigel Hill Founder of TLF Research & Editor of Customer Insight Magazine info@customer-insight.co.uk
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HLY
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EY
E FRE
UR CONSUMER S
We’re offering you a FREE no strings attached question in our monthly consumer survey (worth £245) - giving you access to the views and opinions of our panel of over 55,000 UK individuals.
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ADVERTISING TRACKING
PRICING SURVEYS
WHAT RESULTS WILL I GET? The survey will be completed by at least 2,000 members of our panel and the results from your question will be split by age, gender and region. When we close the survey we will email you the results and they’re yours to keep. Email UK@leadershipfactor.com to reserve your question
TLF PANEL RATE CARD
THE PRICE INCLUDES:
NUMBER OF QUESTIONS
NUMBER OF RESPONSES
PRICE (EXCLUDING VAT)
10 15 20 10 15 20
1000 1000 1000 2000 2000 2000
£1,100 £1,300 £1,600 £1,750 £1,900 £2,100
NUMBER OF QUESTIONS
NUMBER OF RESPONSES
PRICE (EXCLUDING VAT)
1 3
2000 2000
£245 £445
MONTHLY OMNIBUS SURVEY
QUESTIONNAIRE SCRIPTING AND DESIGN ADVICE RESULTS ANALYSIS (DATA TABS FOR 5 SPLITS - OVERALL, GENDER, AGE, CITY, REGION) ANY NECESSARY SCREENING ALL INCENTIVES
O
N
0 £3 LY
R PE
O RS PE
N
(e
x
T) VA
The NEW Breakfast Briefing from TLF Research
B2B CUSTOMER EXPERIENCE SURVEYS Ideal if you’re responsible for customer service and the customer experience in your organisation. This 90 minute briefing is filled with practical B2B survey tips and advice. You will learn how good survey design can get you more actionable insight to drive change. This highly practical briefing starts at 8am and lasts until 9.30am. It is suitable for those with existing B2B customer surveys in place and those who are designing their first B2B customer experience survey. Learn what drives your customers’ satisfaction, loyalty and churn. The presenters have carried out B2B customer surveys in all industries over many years and will share their hard won do’s and don’ts of successful customer experience measurement.
RUN YOUR SURVEY TO: • • • • • •
Get the questionnaire length right Maximise your response rates Use the right question types Survey the right number of customers Probe for comments in the right place Choose the best headline measure for you
ARRIVAL 7:45AM FOR 8:00AM START MANCHESTER MACDONALD HOTEL & SPA LONDON ROAD MANCHESTER M1 2PG THURSDAY 30TH APRIL 2015
DESIGN YOUR SURVEY TO FIND OUT: • • • • • •
What’s important to your customers? What drives your customers’ retention? What share of wallet do customers’ place with you? What are the triggers of churn? Who are ‘at risk’ customers? How do you compare to competitors?
PLACES £30 PER PERSON (EX VAT) BIRMINGHAM ETC VENUES MAPLE HOUSE 150 CORPORATION STREET BIRMINGHAM B4 6TB WEDNESDAY 22ND APRIL 2015
LONDON ETC VENUES VICTORIA ONE DRUMMOND GATE VICTORIA LONDON SW1V 2QQ THURSDAY 26TH FEBRUARY 2015
COFFEE, TEA AND PASTRIES INCLUDED
Book online at www.tlfresearch.co.uk or contact Sandra Beever on 01484 467000 or sandrabeever@leadershipfactor.com