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Enlightened management

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May 2010 £4.50Creating value for customers, employees and shareholders

COMPANIES

IN THIS ISSUE

Affinity Sutton

Cougar Automation

Direct Line

Johnsons Apparelmaster

RBS International

Royal Yachting Association

British Gas

COUGAR AUTOMATION

Half day Briefing

ComplaintsUnderstanding dissatisfiedcustomers£155 (excluding VAT)

The Leadership FactorTaylor Hill MillHuddersfieldHD4 6JA

Tel: 01484 517575Fax: 01484 517676 Web site: www.leadershipfactor.com

Tuesday 5th October 20109:30am - 12:30pmCentral London: Gloucester Road Tube Station

For a detailed agenda please contact Sandra on 01484 467000or email [email protected]

For more information or to book your place visit:

www.leadershipfactor.com/training

Part 1: Who to survey - choices and practicalities· The differences between Complainants and

Defectors.

Part 2: Measure Complaints· Measure your customers’ satisfaction and

understand the drivers of satisfaction withyour complaints process.

· Identify the consequences of the silentmajority who do not bring a complaint toyour attention.

Part 3: Defection who and why do customers defect· Measure satisfaction with the defection

process and understand the legacy ofdefectors and their likelihood to return.

Part 4: Drive improvements· Improve the complaints process.· Encourage complaints.· Improve the defection process.· Customer attitude profiling.

Coffee and Registration

6 News

A more customer focused BritishGas? Promiscuous customersand Banks rewarding loyalty.

8 Latest Thinking

Co-creation - part 3 of the newcustomer experience.

12 Case Study

Nigel Hill takes a look at thechanges going on at AffinitySutton.

18 Conference

The key topics and discussionsfrom The Leadership Factor’sAnnual Client Conference.

VOLUME 7 ISSUE 2 May 2010 In this issue...

37 Book Review

Drive:The surprising truth about whatmotivates us.

24 Employee

Ray Roberston gives his thoughtson the employer - employee rela-tionship here in the UK.

29 Conference

Stephen Hampshire fills us in onthe presentations at the ICSConference.

33 Case Study

Cougar Automation.

35 Research

Sarah Stainthorpe provides us withpart 2 of her summary on differenttypes of research and their purposes.

www.stakeholdermagazine.com | May 2010 Stakeholder 3

ManagementEnl ightened

gets resu l ts

Monthly onlineOmnibus SurveyMonthly onlineMonthly onlineOmnibus SurveyOmnibus SurveyMonthly onlineOmnibus Survey

www.yoursaypays.co.uk

How trusted is yourbrand compared to your competitors?

DOES THEINTERNET IMPROVECUSTOMER SERVICE?

How quickly docustomers expecta response to acomplaint?

Which companiesdo customersrecommend?

Do customersreally dislike IVRin call centres?

How often do customers

write to complain?

How do customers like to becommunicated with?

Do customersexpect companiesto make use ofsocial media?

A new and highly cost effectivemethod for getting answers

you need to know.

On the 1st of every month YourSayPays distributes itsonline omnibus survey. The survey is live for the wholecalendar month as over 3000 panellists complete the

omnibus survey. Respondents represent age 18 and overfrom across the UK. At the end of the month we producea report showing your results by age, gender and region.

If you need to track customer behaviour or attitudes, addingquestions to our monthly omnibus survey is an ideal and

inexpensive tool.

BUT, you don’t have to add questions every month. It can be a one off.

Often colleagues or senior management would like to know aboutcustomers’ behaviour, spending habits or their perception or

awareness of a brand or product. If a whole survey isunnecessary then this could be the inexpensive quick fix you need to

get the answers.

Add your questions to our monthly online Omnibus Survey. Prices start at just £395 (excluding VAT) for 3 closed questions.

To receive a menu of costs and aschedule for submitting questions

please email

[email protected]

and we’ll email something straightback to you.

Nigel Hill editor

Stakeholder SatisfactionPO BOX 1426HuddersfieldHD1 9AWTel: 0845 293 9480

NB: Stakeholder Satisfaction does not accept responsibility for omissions or errors. The points ofview expressed in the articles by contributing writersand/or in advertisements included in this magazinedo not necessarily represent those of the publisher.Whilst every effort is made to ensure the accuracyof the information contained within this magazine, nolegal responsibility will be accepted by the publishers for loss arising from use of informationpublished. All rights reserved. No part of this publi-cation may be reproduced or stored in a retrievablesystem or transmitted in any form or by any meanswithout prior written consent of the publisher.Copyright © STAKEHOLDER SATISFACTION 2010

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Stakeholder Satisfaction is the magazinefor people who want their organisation todeliver results to employees, customersand any other stakeholders as part of acoherent strategy to create value forshareholders. We publish serious articlesdesigned to inform, stimulate debate andsometimes to provoke. We aim to bethought leaders in the field of managingrelationships with all stakeholder groups.

[email protected]

ISSN 1749-088X

We’re entering a very interesting period at UK plc. The first peace-time

coalition since the Great Depression in the early 1930s, the youngest PM

for nearly 200 years and potentially a new parliamentary and electoral

system. It’s quite exciting in many ways but coalitions are not the natural

order of things in this country. So far, politicians have buried their differ-

ences and agreed to collaborate only in extremis. And economically the

challenges are extreme. Relative to the size of the economy you have to

go back to the Second World War to find a worse position and some of

the coalition’s policies will add to Government spending. To avoid the

markets losing confidence in us and precipitating a Greek-style crisis, the

deficit needs to be tackled with plenty of urgency. Messrs Osborne, Cable

and Laws are well aware of this and they are hoping to achieve as much

as possible by making savings rather than increasing taxes. Savings from

waste reduction and efficiency improvement rather than cutting front line

services.

If they want some ideas for reducing costs and increasing efficiency whilst

at the same time improving service to ‘customers’, they could do a lot

worse than look at Affinity Sutton. Formed as a result of one of the earli-

est transfers of a large stock of urban housing from a local authority to a

Housing Association, the company has driven through a culture change

from a property-focused to a customer service-focused organisation as

well as pioneering in its sector many best practices such as customer sat-

isfaction-related pay for all staff, partners (for operations such as repairs

and refurbishment) who are judged and rewarded on customer satisfac-

tion as well as cost savings and a state of the art contact centre.

Reading the Affinity Sutton article (page 12) it’s also interesting to see how

many of their customer satisfaction improvement actions have been low

cost initiatives based on engaging and motivating staff to get the basics

right and do best what matters most to customers. This can also be seen

in some of the presentations at The Leadership Factor’s Client

Conference (page 18) at companies like Direct Line, RBS International

and the Royal Yachting Association, as well as our cover story, Cougar

Automation (page 33). And our review of Dan Pink’s latest book (page 37)

provides plenty of food for thought about using intrinsic rather than extrin-

sic rewards to keep staff engaged and motivated.

Best wishes

Nigel Hill


Our people and **** ******:

Printers of Stakeholder Satisfaction

Stakeholder May 2010 | www.stakeholdermagazine.com6

News

British Gas

customer-focused?

Having attracted much criticism for poorcustomer service, volume of complaints,poor complaint handling etc., it seemsthat British Gas is making real efforts tobecome more customer focused. LastNovember the company invited applica-tions from anyone who wanted to join itsnew customer panel. Over 500 peopleapplied and the customer panel waslaunched in early 2010. The panel hasalready visited customer service headoffice, a parts distribution centre and beenout on service visits as well as having dis-cussions and making suggestions forimprovement. One of its successes wasto get the bills re-designed to presentinformation (such as how much gas thecustomer has used) in a more under-standable way. Later a second customerpanel was launched to accommodatemore of the 500 applicants and on April26th they made their first visit, to a BritishGas call centre.

So is this all worthwhile? On the one handyou can never have too much contactwith and feedback from customers, butthe big concern about panels is how rep-resentative they are. There are three mainproblems:

Not representativeIf, like in the British Gas example, peopleare asked to volunteer for the panel, youtend to get a certain type of person volun-teering. How many people are sufficientlyinterested in British Gas to give up seriousamounts of time to take part in a panel?Not most people, as evidenced by theminiscule percentage of the customerbase that applied. So you are not getting‘normal’ customers.

ExpertsThe kind of people who are motivated tovolunteer for panels tend to be highlyinterested ‘experts’ – in the particularproduct or in general customer service /complaints issues. An example would bethat the Consumer Affairs Director ofuSwitch.com joined the British Gas panel.Even if panel members are not experts atthe outset, they tend to become onebecause their involvement gives them aheightened awareness of the company,product or subject area.

Misleading feedbackWhilst customer feedback is a good thingin principle, it can be dangerous if anorganisation places too much emphasison feedback from non-representative cus-tomers. How do you know if they’resuggesting things that are just not whatthe majority of customers want? Youcould be taking action and making invest-ments on initiatives that will not improvethe satisfaction and loyalty of mainstreamcustomers.

Promiscuous

customers

It’s generally assumed that switching is onthe increase especially for products seenby consumers as undifferentiated, suchas utilities, insurance, broadband and

mobile but a survey by price comparisonwebsite Gocompare.com casts doubt onthis assumption. The most heavilyswitched product was car insurance buteven here only 23% had switched in2009, closely followed by home insuranceat 21% and mobile phone contracts at19%. Only 14% had changed their broad-band provider and 11% their credit card.Overall, 59% had switched something,but 41% had remained loyal to all theirproviders. Needless to say, Lee Griffin,Business Development Director atGocompare sees switching as a goodthing and loyalty as a mug’s game, saying“the only reward you get for your loyalty isa higher price”. This is a view that wouldbe shared by many people, emphasisinghow important it is that companies don’tgive new customers better deals thanexisting ones. In addition, as well asrewarding the loyalty of existing cus-tomers it’s essential to promote the factso that customers understand the bene-fits of not switching.

news

THE ONLYREWARDYOU GETFOR YOURLOYALTY ISA HIGHERPRICE.

News


OFT

backs switching

Another organisation that likes promiscu-ous customers is the Office of Fair Tradingwhich sees switching by customers as away to make banks improve their service.Earlier this week, the chairman of the OFT,Philip Collins, re-stated the regulator'slong-standing view that the banking mar-ket was still not working well for currentaccount holders. He said it needed to beone in which "properly informed con-sumers manage their accounts and makeactive choices about which accountprovider to use, switching where neces-sary in response to individual andchanging needs and new competitiveoffers".

But earlier this year a survey of 1,000 UKadults for the BBC revealed high levels ofsatisfaction with the service provided bythe UK's banks. 92% of bank accountholders questioned had not changed theirbank in the past two years and 93% ofthose people were happy with their serv-ice. Only 7% of people with bankaccounts said they were consideringswitching in the next twelve months.

Rewarding

loyalty

Some of the banks do finally seem to begetting to grips with the advantages ofrewarding the loyalty of existing cus-tomers. This has been driven by threemain factors:

· The heavy promotion and facilitation ofswitching by companies such asGocompare has prompted banks tocounter this threat by strengthening theirown customer retention strategies. Acustomer who has several financialproducts with the same provider is lesslikely to switch than someone with onlyone product.

· The recession has made the banksmuch more risk averse. Advancing loansto existing customers whose financialhistory is a known quantity is a muchsafer bet than lending money to newcustomers.

· The financial services industry doesseem to have become much more famil-iar with Service-Profit Chain principles inrecent years and has taken on board thelink between customer satisfaction, loy-alty and profit.

Several of the major high street banks andthe Nationwide Building Society are nowoffering preferential mortgage deals toexisting current account customers, withbenefits including free valuations, cash-back options, better rates or the chanceto borrow a higher proportion of the prop-erty value. Santander has a currentaccount that’s available only to existingmortgage customers. It’s also a growingtrend for existing customers to be offeredpreferential rates of interest on savingsaccounts.

To manage these strategies, a key ques-tion to add to a customer satisfactionsurvey is “to what extent will you considerapproaching bank X next time you need afinancial product?”. This enables you toidentify the specific drivers of that cus-tomer decision which are often factors likethe extent to which they feel their past loy-alty has been rewarded and the quality ofadvice they have received. S

What’s special about co-creation?

Here’s a definition from Wikipedia. “Co-creation is the practice of developingsystems, products or services through thecollaborative execution of developers andstakeholders, companies and customersor managers and employees.” I prefer myshorter definition:

“Co-creation is doing things withcustomers, not at them”.

Co-creation tends to be associated withservices, which are characterised asintangible, perishable, heterogeneous andinseperable. In other words we’re doingsomething for the customer rather thanhanding over a product, the 2.30 hairappointment can’t be sold at 3 o’clock,every hair cut is different and the customerhas to be there while it happens. If wemade a list of the characteristics that

make a live performance special it wouldbe pretty similar, which is where the cus-tomer experience metaphor comesfrom...but that metaphor leads us awayfrom the active role that the customershould have in the interaction.

The above characteristics of services don’tcause co-creation...but they provide fertileground for it. Whenever you have two peo-ple interacting to produce something ofvalue it creates an amazing opportunity toprovide a tailored solution for each cus-

tomer. At the moment it mostly provides achance for staff to mitigate any dissatisfac-tion created by broken processes.

Doing best what matters

most to customers

The thing is, being good at customer sat-isfaction is about doing best what mattersmost. But average importance concealsdifferent needs and, more subtly, differentpeople MEAN different things by “profes-sionalism”, “efficiency” and so on. BeingGREAT at customer satisfaction demandsco-creation as a way to meet the needs ofindividual customers. Co-creation worksby meeting each customer’s unique needsthrough involving them in the process ofdelivery. Good Business to Business rela-tionships are all about co-creation (or youmight call it partnership).

If co-creation is so great, why isn’t every-

Part 3: With customers not at customersCo-creation

This article, the third in our series on co-creation is based on Stephen Hampshire’spresentation at The Leadership Factor conference in Manchester in March 2010.

The basic purpose of co-creation is to help all businesses to engage more closely with their customers. I’m going to focus on three aspects of co-creation:

why co-creation is different, in important ways, from service or the customer experience; how social media is revolutionising the opportunities you have to engage with your customers; ways in which any organisation can start to benefit from the lessons of co-creation right now.


Latest Thinking

one doing it? Because it’s hard. In order tobe effective it has to be real (i.e. unscript-ed), which means you need great,engaged, staff. The surest way to kill co-creation is to try to fake it by telling staffhow to do it. Mass customisation is allvery well...but it doesn’t go far enough -the essence of co-creation is that it is oneon one. But if it’s not simply about cus-tomisation, it’s also NOT about choice.

It’s not about choice

That’s right, choice can be bad. Choicecan be confusing and dissatisfying forcustomers. One of the benefits of co-cre-ation is that it allows you toAVOID making customerschoose by tailoring to a cus-tomer’s needs without themknowing it. “Don’t make methink” is a classic text on webusability, which applies just aswell to designing customerinteractions. The principle isthat customers are good at “satisficing”,quickly choosing something that seemspretty close to what they want, rather thanspending the time to absorb every detailthey need to make a fully-informed deci-sion. This means, for example, thatwebsites work better when they nestchoices, rather than presenting all userswith all the options.

Let me give you an example. Let’s say youwant to buy a new computer. Do you wanta Mac or a PC? Okay, so let’s imagine wewant a PC and look for one on the PCWorld website. Next choice - laptopor desktop? If we want alaptop we get another layerof options. Even if you nar-row it down to “homecomputing” you still get59 laptops to choosebetween. This is precise-ly where good staff couldstep in, in person orthrough live chat, andco-create a great experi-ence for the customer.Customers prefer thingsthat are easy and familiar, aprinciple that psychologistscall “cognitive fluency” -

co-created experiences are easy for cus-tomers. Tesco are tapping into this ideawith the “Your Basket” feature on theirwebsite. Apple, by the way, have a choiceof 3 types of laptop on their site.

Co-creation is NOT just for services

Car dealerships, for instance, have a greatopportunity to co-create with cus-tomers...but it all hinges on trust. Docustomers believe you will find the bestoption for them? In a co-created situationthe customer sacrifices some control togain ease, so they’ve got to trust you.Manufacturers can’t often create a unique-

ly tailored product in thecustomer’s presence, althoughwhen they can the results arepretty spectacular. But let’s lookat some trends in manufacturing.Brands like Nike have embracedthe trend towards customisation,and Lego have gone one stepfurther by allowing customers to

design their own products (some of whichmay go on to be retail models). More andmore websites like Cafepress,Lulu, Etsy, and Spreadshirtencourage people to create(and sell) their own designs.

The Lean movement empha-sises both the importance ofgiving the customer whatthey want and the greater efficiency ofgetting manufacture as close to the cus-tomer as possible. Doesn’t that sound a

lot like co-creation? The alternative iscommoditisation. Even toothbrushesare now trying, rather pitifully, toreflect our need for individual self-expression.

Using social media

for co-creation

It’s no coincidence that weneeded the internet to openthis massive untappeddesire for creation and cus-tomisation. The web ischanging the way we talk

to each other, connecting andorganising people who had noeasy way to communicate

before. That includes your customers.Like it or not we are all going to have to getused to the idea that so called “socialmedia” will be part of the way we talk andlisten to our customers from now on.

Aleksandr Orlov has36,000 followers on Twitterand 706,000 fans onFacebook. Let me say thatagain - 700,000 peoplehave VOLUNTEERED toreceive marketing mes-sages from a fictional

Russian meerkat. You cannot afford towrite Aleksandr off as some sort of stu-dent cult. Every ad and every tweet orFacebook update carries a very clearmessage—for cheap car insurance usecomparethemarket.com. Here areGoogle’s stats on people searching for“Moneysupermarket” and “Compare themarket”. Look what happens whenAleksandr gets on the scene in Januarylast year.

Latest Thinking


Viral complaining

At The Leadership Factor Conference weasked the audience:

Here’s the results.

In October last year I had a question Iwanted to ask Leica - I wanted to know ifthey could tell me where to hire one oftheir mind-bogglingly expensive, hugelydesirable, cameras. After waiting twoweeks for a response to my email I wasgetting annoyed, so I posted a whinge onTwitter. Simple reputation management, orlistening to customers, is not optionalnowadays...and it’s so easy that it’s unfor-givable not to do it. Basic competencewould be to react to my whinge that

day...but I never heard a word. Did Leicaever read it? No idea, but I do know that afair number of other people did, becausethat post gained me more followers thanany other I’ve made. Why? Because theymonitor the social web for mentions ofbrands like “Leica”, “Nikon”, “Canon” andso on. So why don’t Leica?

New technology

There’s an ever-escalating growth of newtechnology than can help you to interactmore with your customers. For example,there’s a useful ethnography app for theiPhone, Flip videos are a cheap and effec-tive way to get engaging customer voicesright into the heart of your business, andthat’s not even getting to voice over IP,social media, webcams or text analytics.How many businesses even use thepotential of SMS text for quick surveys orinformation alerts? One great use of thistechnology is for opt-in information shar-ing. Kirklees Council, for example, set upa “Gritter Twitter” to keep residents up todate with winter road disruptions.

“Crowdsourcing” is a trend that will not(and should not) go away any time soon.Eric Raymond, talking about softwaredevelopment, puts it this way - “givenenough eyeballs, all bugs are shallow”.Crowdsourcing can cut R&D costs andimprove service by using the “wisdom ofthe crowd” and involving customers at thedesign stage. A good example is“Womanity” - a new site designed toinvolve customers in co-creating futureClarins brands and products.

If you’re still resisting some of the newtechnology, perhaps you should think

about Douglas Adams’ quote on the sub-ject (above).

The Cluetrain Manifesto made a passion-ate call for companies to make the mostof the opportunity that these new chan-nels provide for staff and customers tohave unmediated conversations. This isamazing. Seriously, this should changethe world. It means if I’m having a problemwith my camera I can chat direct with thepeople who designed and built it.Unmediated contact between engagedstaff and customers is hugely powerful.Networks of customers are forming, help-ing each other, talking about you and yourproducts. The choice is whether you wantto make that part of your customer serv-ice and marketing strategy, or watch fromthe sidelines and threaten to sue anyonewho criticises you?

Making a start

So how can we start co-creating with ourcustomers? The first step is to talk to them,or invite them to talk to us. How often doyou make proactive contact with cus-tomers (not counting selling)? How easy doyou make it for customers to contact you?A lot of agencies and consultants activelydiscourage organisations from talking totheir customers— “leave that to us, we’rethe experts”. That’s a terrible idea—go andtalk to customers for yourself as well asresearching them. So many organisationshave dissatisfied customers waiting on holdor fighting IVR systems and disengagedstaff crying out for customer contact...doesanyone else find that odd? Call it virtualisa-tion if you want to sound cutting-edge, butwhy don’t more businesses get ALL theirstaff talking to customers?

“If I posted a com-plaint about yourcompany on Twitter,how long would ittake you to findout about it?”


Latest Thinking

Talking to customers is not the same thingas prioritising anecdote over facts, it’s acultural question about how you see cus-tomers. It means talking about customers,not processes. It means customer contactis NOT a cost. How many people do youemploy? How many of those people arealso customers? Why not? If they are, whynot talk to them as customers?

Bullshit pollutes a lot of our communicationwith customers. According to HarryFrankfurt,

Bullshit is so damaging because the bull-shitter (unlike a liar) has no regard for thevalue of truth. It doesn’t matter to themwhether what they say is true or false, solong as it sounds good. The CluetrainManifesto tells us how to cut out the bullshit- cut out the middle men (and women). Cutout the people who polish all the risk, andintegrity, out of every message. Sometimesyou have to sacrifice perfection of messagefor honest communication. This is particu-larly important at moments of truth, likewhen a customer has a problem or com-plaint, and it makes such a differencebecause customers judge our INTENTIONSat least as much as outcomes. Co-creationmeans allowing staff to take ownership anddeal with a problem in the right way for thatcustomer, at the point of complaint.

The thing is, customers don’t have a prob-lem with talking to you...but they do object

to being mindlessly sold to. If you send mea new credit card and ask me to phone upto activate it, that’s great—I like security. Ifyou use that interaction to kidnap me andtry to sell me insurance for 15 minutes youlose. I believe this kind of hostage sellingdoes more harm than good. BUT what’sone of the most powerful sales tool thereis? Maybe “I’ve got one of those myself”.Here’s a new sales strategy:

“bullshit is a greaterenemy of the truththan lies are.”

1 make good products;

2 give them to staff;

3 let them have natural conversa-tions with customers. This isexactly how specialists (climbingshops, running shops, bikeshops) sell at a premium to thebest customers in their market,who go away happier.

How do you “do” co-creation? Come at every interaction with

the aim of adding value for the customer and you ARE co-creating.

Stephen Hampshire

Client ManagerThe Leadership Factor

Stephen manages customer and

employee surveys for RBS, NatWest,

Visa and Pace amongst others. He

also presents training courses on

employee surveys, customer surveys

and data analysis.

[email protected]

Latest Thinking


S

Customerto theCloser


Case Study

Affinity Sutton is the product of three sep-arate housing associations comingtogether – Broomleigh, Downland andWilliam Sutton. The customer serviceingredient goes back to 1992 when theLondon Borough of Bromley instigatedthe first urban council housing stocktransfer in the UK. The transfer of 14,000properties to what was then calledBroomleigh Housing Association was alsothe largest ever made at that time, so thecompany was a ground-breaking organi-sation from the outset. To win tenantsupport for the change quite a lot of prom-ises were made, so the early focus of thecompany was property refurbishment and

modernisation but in1995 when that pro-gramme was well inhand, CEO KeithExford brought inNeil McCall asOperations Directorwith a brief to mod-ernise the organisationand make it customer-focused.

Not very close to the customer

Neil’s enthusiasm for customer serviceoriginated during a trip to the States in1993. As well as being impressed by the

general level of service and attentive-ness compared with the current UKnorm, he was also intrigued by thesystems behind it. He would bookhotels through their call centres,for example, and be amazed by

how much they knew abouthim, such as his history ofstaying with that chain, howthey would gather more infor-

mation about his likes anddislikes, how they would treat him thesame across all their hotels. Broomleighhad people on the ground who knew thetenant well but it operated through threelocal offices that handled their own calls

our job isto look after

our customers

NeilMcCall

Housing Associations have two purposes:1. To improve the lives of their residents by improving the quality of their homes, neighbourhoods and communities. Some,

like Affinity Sutton, even have declared objectives to improve wider aspects of residents’ lives such as helping them withskills training for jobs, child care and access to low cost finance such as credit unions.

2. To invest in developing new social housing, especially in areas where there is a shortage of affordable homes. AffinitySutton builds over 1,000 new homes each year, a mix of rented, shared ownership and houses for sale. The profits fromsales help to fund further investment in achieving objectives 1 and 2.


Case Study

and effectively did their own thing. Therewas no information whatsoever to monitorcustomer satisfaction or even parts of thecustomer service function. Neil got his firstinformation about what was going on(stats on call volumes and abandonment)from BT! There were plenty of abandon-ments. Perhaps there was nobody in theoffice when the phone was ringing, per-haps it was inconvenient so wasn’tanswered. With most of the staff havingbeen transferred over from the localauthority, it just wasn’t a customer-focused culture. Not on the front line, notin the back office and not even at seniormanagement level. To demonstrate theproblem to the Senior Management Team,Neil made a video of a real tenant calling alocal office and waiting as he stood therewhile the phone rang and rang. Neil askedMark Easton, another new 1995 recruit torun a one-year customer service project toassess Broomleigh’s current service lev-els, to look at latest thinking and practice,particularly the use of call centres for serv-ice delivery and to examine what culturaland communication changes were need-ed to make the organisationcustomer-focused.

A call centre for housing

Mark decided to set up a pilot call centrein Penge. The small eight people ContactCentre was officially a pilot not justbecause it was a new thing in housing butalso because at that time there was still alot of suspicion generally about call cen-tres. Criticism included ‘de-skilling’, poorservice because the technology wasn’tgood enough or the staff lacked theexpertise and within Broomleigh becauseit was seen as a Big Brother approach

with staff constantly monitored throughthe contact management stats and thestart of a centralisation process that wouldremove all power from local offices andeventually close them down. In someways they were right. By 2000 theContact Centre had 12 staff in a newbuilding and all calls had been transferredto it from local offices. But only because itworked well, had eliminated abandon-ments, improved response times and wasincreasingly acting as a spearhead formaking the organisation more customer-focused and changing it in other ways too.

A customer culture

To take responsibility for the ContactCentre and new customer focus drive,Broomleigh had appointed a newAssistant Director of Customer Service.Two in fact – Vicky Bonner and AnnSheckley took on the role as a job share.They developed ‘CustomerFirst’, a four day customerservice training pro-gramme for everymember of staff fromcaretaker to CEO. Butto change the culturefrom “our job is to lookafter our properties” to “ourjob is to look after our cus-tomers” was going to take morethan a four day trainingcourse, because alongwith its 14,000 proper-ties, Broomleigh hadinherited many of its200 people from theLondon Borough ofBromley and a large num-ber of them had little

exposure to other sectors and althoughthey knew the job, they didn’t like the ideaof changing it in any way, and were defi-nitely not ‘close to the customer’. Theexpansion of the Contact Centre enabledthe company to recruit young people,often from the private sector, train themthoroughly in customer service, infusethem with the customer-focused cultureand, as they developed, promote themout into the rest of the organisation.

Partnering

As the 1990s advanced, customer satis-faction was becoming increasinglyimportant throughout the UK, even in theindependent sector, and the Governmentnow required Housing Associations tocomplete a customer satisfaction survey,albeit only every three years. Vicky andAnn commissioned Broomleigh’s first onein 2000 with high hopes after all the work

they had done, but the results weredisappointing, especially for

repairs. A lot of time and moneyhad been spent improving theproperties in the 1990s butthis wasn’t reflected in tenantsatisfaction.

As Neil McCall reflectedon this disappointment,the reasons became clear.

The system Broomleigh hadinherited was to undertakerepairs and improvements toits properties through a net-work of local contractors, whowere used to working in a very

contractual way. Neitherefficient nor customer-focused, the relationship

AnnSheckley

VickyBonner


Case Study

became increasingly confronta-tional as Broomleigh tried tomodernise them and encourage themto get closer to the customer. Neil there-fore looked around at what was happeningin other sectors and found a civil engineer-ing company called Osborne that wasdoing a lot of work through a ‘partnering’arrangement with Railtrack. At the time thiswas quite a step change involving:

Fundamentally it was about both partnersworking together, looking at the bigrepairs picture and working out ways ofachieving better outcomes at less cost. Ifthat was achieved, both would benefit.The partnership with Osborne broke newground in the industry and became anaward winning project. ConstructingExcellence, a Government funded bodywith a brief to promote innovation in the

construction industryselected the partner-

ship as a NationalDemonstration Project. By

2001 the small contractors were all elimi-nated and for reasons of risk managementa second partner, Rydon, had beenappointed to work alongside Osborne.

Measuring customer satisfaction

By now, Broomleigh was doing a numberof innovative things and was well ahead ofthe housing industry game with its focuson customer service. However, the scoresin its annual customer satisfaction surveywere not going up. In 2003 they broughtin UK customer satisfaction specialists,The Leadership Factor, to undertake astrategic review and recommend howBroomleigh could translate its good workinto higher levels of customer satisfaction.The fundamental problem was that theircustomer satisfaction survey was not pro-viding clear guidance on exactly whatneeded doing to improve satisfaction. Soin another pioneering move, Broomleighdropped the rather bureaucratic ‘STATUS’survey that was almost universally used bythe industry and replaced it with TheLeadership Factor’s much more action-focused methodology. This broughtseveral benefits:

- A move from 5-point verbal to10-point numerical scales for moreprecision and reliability

- Questions based on ‘the lens of thecustomer’ (i.e. the things their owntenants found most important) ratherthan standard industry questionsinvented by bureaucrats

- An understanding of the relative

importance of customers’ require-ments so that Broomleigh could ‘dobest what matters most to customers’

- Clear, focused PFIs (priorities forimprovement) at the end of eachsurvey so the company knew whataction to take and was not diluting itseffectiveness by trying to improve toomany different things

- The introduction of a customersatisfaction bonus for all staff if thetargets were hit – quite an innovativemove at the time in any sector, letalone housing.

Expansion

By now Broomleigh had moved muchcloser to customers and, due to the suc-cess of its sector-leading innovations suchas partnering and the contact centre, wasa very efficient and profitable organisation.Deciding that the next challenge wasexpansion, Keith Exford and the Boardlooked for opportunities to merge withanother Housing Association and identi-fied Downland Housing Association, acompany with slightly fewer properties butspread over a much larger geographicalarea along the south coast. When themerger happened in 2004, managementset up a group structure with a parentcompany called Affinity to take over allcorporate functions such as finance, withoperational functions vested inBroomleigh and Downland as sub-sidiaries.

The Broomleigh journey was now repeat-ed in Downland – customer servicetraining, customer satisfaction surveys,customer satisfaction bonus, partnering,winning hearts and minds for a more cus-

- Open book accounting

- Not pricing and quoting every sin-gle job but working on an agreedprofit margin with the partner

- A recognition that the contractordid need to make an acceptableprofit

- A profit share where both partnerswould benefit from any under-spend on the budget

- A customer satisfaction bonus toreward the partner if high levels ofcustomer satisfaction wereachieved and to make sure thatany underspend bonus was notachieved at the expense of goodoutcomes for the customers.

Case Study


tomer-focused, go-ahead culture.Downland’s incoming calls were routedinto the Broomleigh contact centre whichwas now up to 20 employees. As soon asDownland was assimilated, managementwere looking for the next merger opportu-nity and identified William Sutton Housing,an organisation with over 20,000 proper-ties spread all over the country. The 2006merger transformed Affinity (now re-named Affinity Sutton) into a top 5Housing Association with 55,000 proper-ties, a national footprint and one of thebiggest new build programmes of anysocial landlord. William Sutton had goodcustomer satisfaction and a century ofheritage but had a high cost base. So tospeed up the integration Neil McCallmoved over to be CEO of the new operat-ing company.

The Contact Centre

By 2008, when the William Sutton incom-ing calls had all been re-routed, theBroomleigh contact centre employed 37FTEs - mainly full time staff. In many waysit had driven and policed the customersatisfaction journey of the organisation. Aswell as being a great unit for recruiting anddeveloping new employees that couldsubsequently percolate out into theorganisation, taking their customer-focuswith them, the contact centre was at theforefront of adopting best customer serv-ice practice.

The journey was very much helped byconsistency of senior staff. Both VickyBonner and Ann Sheckley were action-focused, eager for change anddetermined to base the contact centre(and the customer service function) on the

best practice to be found in the privatesector. The latest CRM and resource plan-ning software were introduced as weretargets at team and individual level whichwere monitored daily and displayed in realtime on a Call Board. Not typical LocalAuthority or Housing Association cultureat the time!

Vicky and Ann also played a lead role indriving the organisation closer to the cus-tomer by commissioning the customersatisfaction surveys, disseminating theresults, managing the action planningprocess after the survey and organisingcompany-wide customer service training.Following the Customer First training in2000, a second module, ‘In theCustomer’s Shoes’, was developed andrun in 2005, and a third, ‘Closer to theCustomer’, is planned for this year. AtVicky and Ann’s insistence, the customerservice training courses were alsoextended to cover all the partners’employees. Partners were also includedin the new complaint handling proce-dures, targets and training, as well as thedevelopment of a culture that embracedcomplaints, encouraged and captured asmany problems/complaints as possibleand significantly reduced the averagetime for responding to and resolvingcomplaints.

Improving customer satisfaction

Complaint handling was one ofBroomleigh’s first PFIs (priorities forimprovement) from the early LeadershipFactor surveys. To drive satisfactionimprovement by making a difference onthe PFIs, the secret is to keep the spot-light on, constantly reminding and

motivating staff to address the relevantissues. Vicky and Ann kept reminding staffabout the customer satisfaction bonus,did countdowns to the next survey andafter listening to the Irish Life talk at TheLeadership Factor’s 2006 ClientConference, introduced a succession ofinitiatives to engage staff by bringing cus-tomer feedback into the office. (To readmore about Irish Life’s customer satisfac-tion improvement measures go towww.stakeholdermagazine.com/articles).These included PFI reminders in the lifts,cardboard cut-outs of customers with vel-croed comment bubbles from customersurveys and a Pledge Tree in the staffkitchen / restaurant area. In its first week,the Pledge Tree generated 70 pledges ofactions staff were going to take to addressthe PFIs, and the prize for the best onewas only an Easter egg. Motivating staff toimprove customer satisfaction doesn’thave to be expensive! When one of thePFIs was to improve the general sur-roundings in people’s neighbourhoods(with litter and dumped rubbish among themain dissatisfaction drivers), another cost-effective satisfaction improvementinitiative was to put skips on all the estatesand encourage residents to have a goodclear-up. This involved customers andmade it obvious that their concerns werebeing addressed, and since the HousingAssociation has a responsibility to removeabandoned rubbish, the cost of the skiphire was no more than they would havespent anyway.

Evolving the surveys

As companies become more mature inmeasuring and improving customer satis-faction, the difficulty of the task tends to


Case Study

The frequency of survey was increased to monthly. Having results every month keeps the

spotlight on customer satisfaction and greatly improves the link between taking action

and seeing a change in the results.

The sample size was increased so that results could be drilled down to the lowest possible

level. Affinity Sutton has divided operations and service delivery into 21 neighbourhoods. Each

neighbourhood now gets its own customer satisfaction results every month.

As well as continuing to score satisfaction with the most important customer require-

ments out of 10 each month (because you have to have a scorecard that accurately

shows whether satisfaction is improving or not), Affinity Sutton has introduced much

more focused CEM (customer experience modelling) questions. These provide very tangi-

ble data on specific customer experience touchpoints from whether repairs staff showed

identification to the length of time it took for a call-back to be made. The advantage is

that levels of satisfaction can be specifically linked to staff behaviours that did or didn’t

happen.

Since repairs tended to emerge as a PFI on the annual customer satisfaction surveys,

and most of the actions to address the PFI were down to partners rather than Affinity

Sutton, a separate monthly repairs tracker survey was introduced. Previously, the part-

ners had an obligation to conduct their own ongoing surveys to monitor customer

satisfaction, but the results were suspiciously high when compared with the annual

Affinity Sutton surveys. When the monthly monitoring of customer satisfaction with repairs

was taken over by The Leadership Factor, satisfaction was shown to be much closer to

the annual surveys and partners were given a clear objective to improve it. Based on

repairs completed in the previous month, The Leadership Factor conducts 100 interviews

each month for each partner (1,000 per month in total). The combination of swift informa-

tion about current performance and transparent benchmarking across the partners (they

all see each other’s results), has created a powerful incentive to improve. In the 21

months that the survey has now been running customer satisfaction with completed

repairs has improved by over 10% and is much higher than it has ever been in the past.

increase. The higher customersatisfaction becomes, the harderit is to improve it further. Havingimproved customer satisfaction verysuccessfully in the early years and estab-lished themselves near the top of thehousing sector league tables, AffinitySutton encountered this when theimprovement curve began to flatten. Tocounter this trend they made fourchanges:

The future

Affinity Sutton’s closer to thecustomer journey was to take a

mish-mash of inconsistent, uncoordinatedcustomer service provided by a myriad oflocal offices and replace it with a planned,monitored and consistently good level ofservice led by the contact centre. This part ofthe change process is now largely completebut ironically, the next phase is about revers-ing that trend, but in a controlled way. You

have to get rid of inconsistent levels of serv-ice where nobody really knows what’s goingon because that’s rarely good for the cus-tomer and it’s almost always more costlythan it should be. However, whilst centrali-sation improves control, reduces cost andimproves service, there’s no getting awayfrom the fact that one size doesn’t always fitall and, in a national Housing Associationlike Affinity Sutton there’s a danger that thelandlord is perceived as remote and inac-cessible. And that’s not closer to thecustomer! The next challenge is therefore todevelop and implement differentiated serv-ice for different customer segments (e.g.general needs tenants, shared owners andretired people) without reducing the qualityof service or increasing costs. These objec-tives as well as perceived accessibility willbe achieved partly by improving self-serviceoptions on the web – a good model beingthe way the DVLA has made it so mucheasier for us all to renew our road tax usingtheir website. But customers can’t doeverything themselves on the web, espe-cially when customer requirements are ascomplex as they are in housing, so there’s aneed to improve local service delivery with-out sacrificing the control, quality andconsistency that have been so hard won. Itwill mean a more mobile, flexible and wellequipped workforce. NeighbourhoodHousing Officers, for example, will all haveto be equipped with laptops, 24 hourremote access to all computer software andfiles so they can instantly check the status ofany of their tenants’ repairs, transferrequests or arrears. Managing all this will bea bigger challenge than managing a contactcentre and it will be essential to make surethat it evolves in a way that benefits cus-tomers, not just the organisation – hencethe brand name for the next customer serv-ice training – Closer to the Customer.

1

2

3

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Case Study


S

Client Conference

2010T h e

Venue: Radisson Blu, Manchester

Green Fluffy Des and Red Anti-Des

As well as market leading RBS brandssuch as Direct Line, Churchill and GreenFlag, Chris is responsible for many toppartner insurance brands such as BMW,

Nationwide and Caravan Club. Whilst it’sobviously essential to protect and improvethe loyalty of RBS customers, it’s evenmore critical to deliver a flawless customerexperience for the customers of partnercompanies. With 22 million policies, RBSinsures over 20% of the UK adult popula-tion and handles over 50 million customercalls every year.

On March 18th almost 150 delegates assembled at the Radisson Hotel at Manchester Airport for The Leadership Factor’s 11thAnnual Client Conference. With speakers from a diverse range of organisations that have succeeded in improving customersatisfaction, this exclusive focused event is free to The Leadership Factor’s clients and a small number of selected guests but isnot available to the public. A combination of latest thinking and real world advice from successful practitioners, the conferenceprovides an exceptional learning and networking opportunity for customer management professionals. The conference was openedby The Leadership Factor’s own ‘thought leader’, Stephen Hampshire. Always entertaining as well as interesting, and usually alittle bit provocative, Stephen’s take on co-creation is published in full on pages 8 to 11 of this magazine. We’ll therefore start thisreview with the morning’s second speaker, Chris Wilson, Director of Fulfilment and Supply Chain at RBS Insurance.


When it comes to customer experience,RBS Insurance is now right at the top ofwhatever benchmarking league table youcare to use – The Leadership Factor’slarge customer satisfaction league table,net promoter score or specific aspects ofservice delivery such as keeping cus-tomers informed. Their journey from goodto great was a combination of some veryclever stuff plus a lot of absolute basics,spiced up for employees by a good doseof inspired creativity. First the clever stuff.Following some complex analysis of thou-sands of customer interviews by TheLeadership Factor, it was calculated that acombination of increased renewals pluscost savings from fewer complaints andinbound calls meant that every 2%improvement in customer satisfactiondelivered £1.7 million to the bottom line.

Focus on PFIs

There was now a clear incentive toimprove customer satisfaction, but thesecret to achieving it was to move awayfrom monitoring a series of complicatedoperational measures (the lens of theorganisation) to focusing on a very smallnumber of usually simple things that werebugging the customer and fixing them (thelens of the customer). Monthly customersatisfaction interviews enabled TheLeadership Factor to identify for RBSInsurance four basic things that, if notflawless, would damage the customerexperience, slash renewal rates and driveup costs. These PFIs (priorities forimprovement) were not rocket science –an example of one is keeping customersinformed all the time about what’s hap-pening with their car repair. There weretwo keys to addressing the four PFIs. Thefirst was making it real, interesting andmotivating for the thousands of employ-ees handling those 50 million calls. Thiswas where Green Fluffy Des and CuddlyCalls came in. Christened ‘Engagementfor Success’, the initiative that brought thePFIs to life featured Green Fluffy Des (I amDelighted Every time and Stay) and hisalter ego Red Anti-Des, a bottom box cus-tomer who had been let down on one ormore of the PFIs, was very unlikely torenew and would often cause staff a lot ofhassle and grief calling in to chase things

up and perhaps end up making a formalcomplaint. The differences between GreenFluffy Des and Red Anti-Des were broughtto life by recording a percentage of thecustomer survey interviews and playingback customers’ comments to contactcentre staff. But there was also a secondkey to success.

It’s our business in your hands

Like many organisations these days, RBSInsurance delivers a big chunk of the cus-tomer experience through a wide range ofpartner companies, from a local garageproviding roadside assistance for a GreenFlag customer stranded on the motorwayto a loss adjuster assessing flood damagefor a home insurance customer inCockermouth. Consequently, RBS’ cus-tomer satisfaction, renewal levels andbusiness success will be hugely affectedby the performance of these many suppli-ers. Chris therefore assembled all of themat a conference in Edinburgh and toldthem that since ‘it’s our business in yourhands’, ‘here’s the new reality’, and thenew reality was delivering a flawless cus-tomer experience especially on the fourPFIs. Another critical part of the new real-ity was that the partners’ customersatisfaction performance would be moni-tored – independently and continuously.Monthly customer satisfaction interviewswould be conducted in sufficient volumesto produce scores for all partners. Gettinga high Red Anti-Des count would not begood for their future relationship with RBSInsurance!

Cuddly Calls

Partners were educated about the bene-fits of customer satisfaction (StephenHampshire presented to them at theEdinburgh conference) and were encour-aged to adopt Des with their ownemployees. They were also provided withrecorded customer comments from theirown customer satisfaction interviews andasked to introduce the final piece in thecustomer experience jigsaw – CuddlyCalls. Again not rocket science, CuddlyCalls are simple follow-up calls followingcritical touchpoints in the customer expe-rience to check that everything is OK, andif not, what can be done about it. A pilotcampaign had demonstrated that CuddlyCalls could increase the customer satis-faction index from 81% to 92% - andremember how much each 2% improve-ment was worth to the bottom line!

Next up were Affinity Sutton, one of theUK’s largest housing associations. Theirstory is told on pages 13-16 of this mag-azine.

Here are Chris’s six conclusionsabout how to successfully improvecustomer satisfaction:

1. Calculate the benefit and spell outthe business case. If you can add£1.7m to the bottom line for every2% improvement it’s a powerfulmotivator.

2. Understand what really matters toyour customers.

3. Make it real for your people.

4. Understand what improvements willhave the biggest impact.

5. Build a clear outcome-focused planthat will deliver improvement.

6. Design satisfaction into the process– don’t leave it to chance.


Conference


Conference

Who complains most?

Filling the graveyard slot after lunch wasLeadership Factor Director Greg Roche.Perhaps that’s what prompted him to usethe technology and get everyone votingon a whole series of questions designedto profile the typical complainer. Based ona YourSayPays survey conducted inFebruary 2010 with a representative sam-ple of the UK population, a complainer ismore likely to be:

- Female 69.2%- 41-60 years old 40.2%

Moving on to the UKCSI results fromJanuary 2010 to explore UK organisa-tions’ complaint handling performance,Greg informed us that:

- Problem incidence remains high, withnearly 12% of the population havingexperienced some kind of problem witha UK organisation in the last 12 months.

- 75% of us do complain to the organisa-tion when it happens.

Since it’s now widely recognised that agood complaint handling process will makecomplainers far more satisfied and loyalthan customers who have a problem butdon’t complain, it’s really important toencourage everybody who has a problemto bring it to the organisation’s attention.The good news is that the reasons given bythe 25% who didn’t complain are all easy toaddress, as shown in chart (top right).

The UKCSI is also very clear about thestaff behaviours that make the most, andleast favourable impression on customerswhen they do complain. The chart (middleright) shows customer satisfaction withthe complaint handling process based onvarious staff behaviours. The biggest pos-itive differentiator is dealing with thecomplaint immediately.

And these staff behaviours are reallyimportant, because the thing that causescomplaining customers the most irritationis a poor staff attitude. (As shown in thegraph on the right).

Why customers don’t complain

52.2%

18.4%

15.5%

14.2%

11.3%

9.1%

8.6%

Didn’t think it would make any difference =

Didn’t have time =

Didn’t know who to complain to =

The complaints process is too much hassle =

Don’t like complaining =

Didn’t know how to =

Other =

Staff behaviours

Dismissed it

Made excuses

Seemed uninterested

Passed you on to someone else

Acknowledged your complaint in writing

Apologised

Told you what would happen next

Told you how long it would take to resolve

Listened carefully/wanted to fully understand the problem

Were sympathetic

Took responsibility

Dealt with it immediately

1 3 5 7 98642 10

8.1

7.9

7.1

7.0

6.9

6.6

6.5

5.8

3.4

3.0

2.9

2.5

Annoyance by cause of problem (where 1 = ‘slightly irritated’ and 10 = ‘very annoyed’)

Availability of goods/services (e.g. couldn't find what you wanted)

Suitability of goods/services (e.g. didn't do what you expected)

Quality or reliability of goods/services

Other

Late delivery or slow service

Cost

Staff competence

Staff attitude

5 6 7 8 9 10

8.2

7.7

7.6

7.5

7.2

7.1

6.9

6.7

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Making the most of your

survey results

Following Greg was Paul Stoddart,Customer Service Manager at JohnsonsApparelmaster who are the UK’s leadingprovider of workwear, renting and launder-ing over three million garments per monthfor around 40,000 organisations.Johnsons did their first customer satisfac-tion survey with The Leadership Factor in2004 and identified an unusual outcome –their new customers were less satisfiedthan longer standing ones. With moststakeholders (customers, employees,suppliers, shareholders) there is a honey-moon period of high satisfaction but inJohnsons’ case the opposite applied. At72.4%, the Satisfaction Index of new cus-tomers was 5% lower than the average forthe entire customer base.

Based on the satisfaction gaps identifiedby the survey, Johnsons made over 30major operational, IT and proceduralchanges, introduced new manuals, starterpacks and online facilities to help newcustomers and trained over 600 employ-ees in the new ways of working. Quarterlycustomer satisfaction surveys were intro-duced to monitor progress. As shown inthe chart below, the result was a massiveincrease in new customer satisfactionwithin two years.

Beating the competition

Johnsons also used the survey results togain a competitive advantage. They dis-covered that they were significantlyout-performing their two main competitorson customer satisfaction (see resultsbelow) and that they had a particularlymarked competitive advantage on thepeople requirements such as accountmanagers’ performance, helpfulness /responsiveness of staff and complainthandling / problem solving ability. Sincethe garments and their cleaning can begivens, it’s the people that are often thedifferentiators.

Johnsons used the information to developsales materials and sales training thathighlighted the differentiators plus a directmail campaign focusing on Johnsons’superior customer service. 100,000 post-cards mailed in 2009 resulted in 2,000appointments and 286 new customerswith a contract value of £1.5 million. Andall this for a campaign costing no morethan £30,000.

Internal benchmarking

Across hundreds of customer satisfactionsurveys and clients, The LeadershipFactor often finds that one of the mostsuccessful methods for improving cus-tomer satisfaction and loyalty is internalbenchmarking. Nobody wants to be at thebottom of prominently publicised internalleague tables. Since producing data toindividual branch, call centre, sales teamor partner (like RBS above) level will alsotell each branch / team what it needs todo to improve its own scores, this is a win-win situation. Analysis of Johnsons’customer satisfaction results showed thatthe same people factors that differentiatedthe company from its competitors also dif-ferentiated branches with the highest andlowest levels of customer satisfaction.This enabled the company to introduce avery successful initiative at its poorest per-forming site that included new trainingbacked up with NVQ qualifications, newdepartmental team leaders and teambriefings, a re-structured customer serviceoffice and improved communications.Together with the pressure of the internalbenchmarking this poorest performingbranch improved its CustomerSatisfaction Index from 74.6% to 84% andmoved up into the top ten branches.

Lost customers

Johnson also asked The LeadershipFactor to interview lost customers, withsome very interesting results. First it pro-vided valuable feedback to combatsalesforce assertions that when cus-tomers were lost it was almost always onprice and therefore couldn’t have beenavoided. In actual fact, whilst price wasthe reason for 28% of customer defec-tions, 48% were down to service. Thiswas consistent with the fact that productand service requirements scored muchhigher than price for importance on thecustomer satisfaction surveys. Anothervery useful finding from the lost customersurvey was that 60% of them would con-sider Johnson again in the future, givingthe company a good reason for keeping intouch as well as focusing on service ben-efits more than price for winning themback.

2004 customer survey results

Newcustomers

ExistingCustomers

New Customer Satisfaction - Where are we now?

Competitor A Competitor B

2009 Customer Satisfaction Scoreversus key Competitors


Conference

Becoming the best bank offshore

Based in the Channel Islands, the Isle ofMan and Gibraltar, RBS International has aclear mission to be ‘the best bank offshorefor service’. Stuart Miller, Head of CustomerExperience, explained how the October2008 crash in the financial markets hadprovided a massive challenge but how RBSInternational had chosen to respond by re-doubling its focus on Service-Profit Chainprinciples (see the first 6 editions ofStakeholder Satisfaction at www.stakehol-dermagazine.com/articles)(See diagramabove).

They particularly emphasised internalservice to internal customers because thisinvolves everybody and was good forimproving staff morale after the crash.There was also strong focus on how high-er customer satisfaction would improvefinancial returns. The Vision Pyramid illus-trates the three planning levels of vision,strategy and culture.

Customer Promises

The company’s customer satisfaction sur-veys had shown, like many others, thatimproving customer satisfaction was notabout massive investment or short termgimmicks, but was down to getting thebasics right, consistently, every day. Todrive this home, the Customer Promisescampaign was developed. The threepromises were:

The ‘U and ME’ service branding was pro-liferated around the company on wallposters, screen savers on everyone’scomputer, mouse mats and display pan-els. Staff couldn’t go anywhere withoutseeing ‘we’re all customers’, ‘I, U, ME’,and the Customer Promises. Stuart calledit TOMA – top of mind awareness.

To drive home the internal service qualitymessage, monthly internal surveys wereconducted with scores out of 10 across all13 divisions for the three promises. Therewere league tables, internal benchmarkingand, to provide additional insight, employ-ees were encouraged to make verbatimcomments as much as possible to explaintheir scores. The internal surveys showedthat all departments wanted to delivergood service but tended to blame eachother when things fell short. The surveysresulted in all taking a much more positiveapproach, stopping the blame game andcollaborating much more to improvethings. This was helped by the ‘Across theFloor’ initiative where staff were encour-aged to personally visit another team (“toget feedback and to understand how wecan meet your needs better”). Across theFloor was promoted with the same ‘I UME’ purple branding but with some newposters. Screen savers have alsochanged to focus on Across the Floor andinternal customers.

The outcomes

All the effort certainly made a difference.Every one of nine frontline RBSInternational businesses improved cus-tomer satisfaction in 2009 and the icing onthe cake happened at the end of the yearwhen the Isle of Man Bank, Peel branch,won Customer Service Team of the Yearat the National Customer Service Awards.

The company’s not resting on its laurels. In2010 the customer satisfaction drive hasbeen freshened up with new, blue brand-ing and new posters, plus a custom-made

Internal Service Value CustomerSatisfaction Loyalty Profitability

and GrowthEngagementStaff

Our people Our Customers

Service Profit Chain (SPC)

1. I listen, understand and respondto your needs

2. I do what I say

3. I act where problems arise.

Service Strategy

Conference


DVD showing how an unempatheticbranch employee delivers a poor cus-tomer experience and subsequentlyregrets and learns from her behaviour. TheDVD was widely used within the companyincluding at group training sessions in allbranches.

Charting the candidate experience

With a Customer Satisfaction Index con-sistently over 90%, the Royal YachtingAssociation is right near the top of TheLeadership Factor’s customer satisfactionbenchmarking league table. Making thefinal practitioner presentation, James

Stevens, Chief Examiner at the RYA,explained how they use customer satis-faction tracking to monitor the satisfactionof candidates for Yachtmaster qualifica-tions. Echoing comments made by ChrisWilson earlier in the day, James pointedout that the continuous tracking surveysalso help the RYA to assess the perform-ance of their partners – in their case,examiners who work part time for the RYAand conduct Yachtmaster exams allaround the world. The exam is a full dayaffair, with a large yacht or motor launch,often in difficult seas. Nobody doubts thetechnical competence of the examiners,but one-to-one in close confines, andmaybe in stressful situations, communica-tion skills and empathy can make a bigdifference to the candidates’ customerexperience, pass or fail. The survey, whichinterviews candidates all over the world,does ask questions about non-personalrequirements such as booking proce-dures, fees and credibility of thequalification, but the differentiators arestrongly driven by examiners’ relationshipskills. It’s things like the examiner’s helpful-ness, friendliness, willingness to explainthings properly that make the difference. Arandom sample of examiners’ candidatesis enough to flag up any examiners whoare coming towards the bottom of theinternal benchmarking league tables. Acensus of their candidates can then beinterviewed for a period to verify whetherthere’s a real problem. The fact that exam-iners know that the satisfaction monitoringhappens is enough to focus them on the

importance of the candidate experienceas well as the technical requirements ofthe examination.

Intrinsic or extrinsic rewards?

The conference was closed by LeadershipFactor Client Manager, Richard Kimberwho pointed out that most organisationsstill attempt to motivate most employeesusing traditional ‘carrot and stick’, ‘if –then’ rewards; basically extrinsic rewardsystems, but if they switched to an intrin-sic, self-motivated mind-set, could itrevolutionise their ability to deliver greatcustomer service? For details of intrinsicrewards see Richard’s review of DanPink’s book, “Drive: the surprising truthabout what motivates us”, on page 38.

Conference feedback

Feedback from delegates illustrated somevaluable benefits from attending the confer-ence. As well as meeting andbenchmarking with new people from differ-ent industries who may have completelydifferent ideas, delegates took away a lot ofvalue from listening to the speakers. New,‘latest thinking’ ideas are always welcome,but the main benefit for most people waslistening to customer management practi-tioners from successful companies whohave driven real change that resulted in tan-gible and often quantifiable benefits for theirorganisations. S

WorkAccording to the results of research from global professional services firm Towers Watson, the economic down-turn has fundamentally altered the way employees view their work, the organisations they work for and theirbusiness leaders, shifting the whole employer-employee relationship in the UK. Unsurprisingly, employees don’tlike what has happened compared to pre-recession times when jobs and career opportunities were plentiful andemployees often held the balance of power in the employer-employee relationship.


Employee

Attitudes

The Towers Watson Global WorkforceStudy 2010, “a survey of employee atti-tudes and workplace trends”, was basedon more than 20,000 private sectoremployees in 22 countries, including over1,000 in the UK, surveyed betweenNovember and December 2009. In starkcontrast to earlier studies, the latest surveyfound that the recession has madeemployees more realistic, more likely tostay with the same company, more likely towork hard and to accept that their rewardsshould be judged on performance.

But the survey found that organisationshave many frustrated employees who cansee no opportunity for career advance-ment in the organisation. That suggeststhat while career development may be onthe back burner, it’s still an aspiration formany employees. However, some of theactions companies took during the eco-nomic downturn, such as organisationalrestructuring, fewer tiers and the cancella-tion of training and developmentprogrammes, are likely to have reducedthe options available during the upturn.

Priorities

The downturn has changed employees’priorities. Job security and workplace sta-bility are now more important to mostemployees than career advancement.

Only 12% are currently ‘looking’ for anoth-er job and only 4% have made activeplans to do anything about it. However,the latest CIPD quarterly employment out-look report suggests 22% are looking,although this is slightly down from the pre-vious three surveys (25%). For 18-24 yearolds (the “lost generation”) the figure risesdramatically to 43% of UK employeesand, according to Towers Watson, thisgroup are now more interested in careeradvancement opportunities, work life bal-ance and flexible work hours. Enthusingthe lost generation and giving them hopeof a future at work through training, workplacements, internships and apprentice-ships should be a priority for all HRDirectors and CEOs.

While public sector employees are leastlikely to be actively looking for a new jobcurrently, they are the group that ideallywould most like to change jobs in the nextyear (42%). It wasn’t long ago that somesurveys were predicting a mass exodusfrom the private to public sector. Howtimes have changed!

Towers Watson reports that UK employ-ees appear to be redefining “careeradvancement” – it’s more about acquisi-tion of new skills and less about atraditional progression through the hierar-chy of the organisation. 53% ofemployees define career advancement asbeing about acquiring new skills to do

kforce2010

Employee



Employee

their current job better and to make themeligible for other jobs. That’s especiallyimportant for two employee groups: first,the lost generation; and, second, thosewho have been employed in the same jobfor many years, sometimes decades. Forboth groups, seeking work is unfamiliarterritory and demands a high degree ofdrive and self-belief.

Mobility

There’s been a big shift in employeemobility too. 50% of employees want towork for one company for life and most ofthe remainder no more than three.PriceWaterhouseCoopers’ (PwC) 2009survey of millennials at work (millennialsare those who entered the workforce after1st July 2000) has a similar finding – 75%believe they will have between two andfive employers in a lifetime. However, mil-lennials want the opportunity toexperience overseas assignments – 80%would like to work abroad and 70%expect to use another language duringtheir career. Maybe the expandingeconomies of Brazil, China, India andRussia will be their oyster.

At the opposite end of the age spectrum,older employees seek job security andbetter pensions even more now than theydid pre-recession. As life expectancyincreases and pension deficits continue,this is unlikely to change significantly.

Engagement

Unsurprisingly, employees are consciousof the need to help their companies survivethe recession and to achieve this 62% arewilling to put in effort beyond what is nor-mally expected. Such discretionarybehaviour and effort is at the heart ofemployee engagement, so it will be inter-esting to see if this translates into higherengagement levels in the upturn. But,what’s been the impact of the downturn onemployee engagement, about which somuch has been written over the last 5years? The latest CIPD quarterly employ-ment outlook report provides some usefulinsights about “job satisfaction, attitudestowards management, and communica-tion and advocacy”. Overall, jobsatisfaction now runs at a net score of 35,although the figures differ markedly by agegroups. There has been a dramatic drop injob satisfaction among 18-24 year olds,from a score of 28 last quarter to just 5 thisquarter. In contrast, 55+ year olds scored54. Satisfaction is highest among the char-ity/voluntary sector (55) and sole traders(60) and lowest in medium and large busi-nesses (more than 250 employees).

Employee attitudes towards their immedi-ate manager continue to be generallypositive and have changed little over thelast 12 months. Employees are most like-ly to feel that managers always/usuallytreat them fairly (68%), are supportive if

they have a problem (62%) and listen ifthey have suggestions (61%). On theother hand, employees are most likely tosay their manager never/rarely coachesthem on the job (45%), discusses trainingneeds (40%) or gives feedback about theirperformance (28%). If managers are to re-connect with many demoralized anddemotivated employees, the latter threeperceptions need to improve rapidly.Performance management must ensurethese are delivered.

Net satisfaction scores about employees’perceptions of senior managers are muchless positive, especially over consultationabout important decisions (-28), trust inthem (-1) and confidence in them (2). Again,this has changed little over the last 12months. Perhaps the recession has rein-forced rather than changed perceptions.

Employer advocacy, an oft quoted impor-tant aspect of engagement, appears to beon the decline. Employees are less likely(27) to recommend their organisation asan employer than last quarter (33) andthey are increasingly unhappy with theiropportunities for feeding back their viewsto senior managers. Are perceptions ofthe latter the root cause of the decline inadvocacy? .

Building spirit and motivation

66% accept that their pay should bedetermined by personal performance.That’s unsurprising, because most sur-veys which include a question about thisissue find that. But that’s not the point.The real issue is “how” should they belinked and that’s when trust and fairness inperformance assessment rise to the fore.This is why the Towers Watson study’sfinding about what employees want from

their leaders is particularly important.Trustworthiness (71%), care about the

well-being of others (62%), being highlyvisible to employees (56%) and encour-

aging the development of employees(50%) feature highly. For organisationsthat do a good job satisfying these“wants”, the future looks promising; fororganisations that don’t, the future is lesscertain. When we look, in 2-3 years time,at organisations that win the “Employer of

Such potential scenarios pose some intriguing questions:How will organisations maintain the morale of a new breed of Òcompany people ”who have nowhere to go?What should organisations do to mitigate a potential brain-drain oftalented employees who realize they are in short supply andwant to / decide to jump ship for a better future when theeconomic recovery has been secured?To what extent will employees in new, expanding sectors forexample, green energy, digital and bio-technology, still feelthis way towards one employer when a brighter futurebeckons?What talent management strategies do organisations needto put in place to balance the globally-mobile few and thestay-put majority?Will the tarnished reputations of some organisations makemore talented people want to run their own businesses?How should organisations respond to the aspirations of anaging workforce?

Employee


Choice” accolade, we will find that theyhave delivered on these top employee pri-orities and “done best what matters mostto employees”. It will be interesting tocompare the lists of Best Companies toWork For in 2008 and 2012!

While we’ve seen and survived the worstof the economic crisis, there still remainsone very real danger ahead, according toScott Blanchard, Vice President of ClientRelations for The Ken BlanchardCompanies. That danger is complacencyabout meeting the motivational needs ofemployees. As Blanchard explains, “I thinkthat there have been some organizationswho felt that the recent lack of options foremployees let them get away with lessthan great practices with their people. Andso I think that people are at a pretty lowlevel of trust and excitement with many ofthe organizations they are working for. Sothe challenge right now is for leaders to

build spirit and motivation, energy, com-mitment, and innovation in theirorganizations.”

Changing the talent culture

According to the PwC 13th Annual GlobalCEO Survey of 1,198 business leadersfrom around the globe betweenSeptember and November 2009, includ-ing 69 from the UK, the signs areencouraging. PwC believe success in2010 will in part be dependent on howcompanies motivate, manage and rewardtheir talent pool. They found that: · 42% of UK CEOs expect headcount

numbers to increase in the next 12months

· 52% of CEOs plan to make significantchanges to their staff morale/employeeengagement programmes

· 65% plan to increase investment in lead-ership and talent management

· 78% plan to change their talent manage-ment strategies in the wake of thefinancial crisis

The PwC report goes on to say “The scaleof anticipated change suggests that forwhatever reason, existing HR practicesdid not support the businesses when thecrisis hit. The past year has demonstratedthat many reward models are broken,CEOs did not have sufficient flexibility toredeploy talent when the crisis hit and thatdifferent skills will be needed to competein the new landscape.” We will have towait to see how the HR function in organ-isations responds to this challenge.

Managing during the upturn: Top 5 tips

1. Communicate, positively, a picture of the future: tell all employees where theorganisation is heading – its vision, goals and values – and the part employeescan play in helping the organisation to succeed. Be open, send a compellingmessage and build trust.

2. Leadership development: define the behaviour and competencies that will helpdrive success in the new world. Develop leaders at all levels, from the top teamto team managers. Give them the skills, tools, knowledge and confidence tomanage a sceptical workforce that is seeking direction. Judge leaders by theirbehaviour and how it translates into business results.

3. Collaborative, energised, innovative culture: build a culture where teamwork andgroup cooperation counts and is recognised. Live by your organisation’svalues. Implement a new reward model that balances individual, team, shortterm and long term elements. Look at what you can do to provide growthopportunities and give people the opportunity to rise to the challenge.

4. Customer service excellence: deliver excellence in everything you dofor customers. Never forget they pay the bills. Hold customer days,involve your employees in them and introduce smarter ways ofworking with customers. Celebrate customer satisfaction successstories – they are infectious.

5. Stay energised: maintain momentum during what looks like aprolonged rather than a quick recovery. Employees will understand thechallenges the organization faces. Keep them informed and listen totheir concerns/ideas – through for example, roundtables and nevertake them for granted. Treat them fairly at all times.

Raymond RobertsonDirector, Strategic Reward

Consultant, Visiting Lecturer, Guest

Speaker and Author

Tel: 01425 612789; email:[email protected]

Ray works with a wide range of

organisations to develop and

implement HR practices which drive

employee engagement and business

success. His clients include

Manchester United, Whitbread,

Siemens, ABB, Northumbrian Water,

Porsche, Miller Insurance and Ralph

Trustees, owners of one of the largest

independent 4* and 5* luxury hotel

groups in the UK. Ray is a visiting

lecturer/guest speaker at several

business schools and conferences.

He facilitates HR/Board away-days,

in-company events, focus groups and

workshops. He is the author of a

major book The Together Company –

Rewarding what matters most to

people and organisations.

S

Conference


The green endof a hard winterICS annual conference 2010

a new beginning......the renaissance of customer service

The economy, predictably enough, was high on the agenda at this year's ICS confer-ence. That didn't mean that it was depressing, with one exception, but it did make youwonder about the "green shoots" featured on the front of the delegate pack. The con-ference was entitled "a new beginning...the renaissance of customer serivce", and Ithink an important message was that customer service may be one way for organisa-tions to weather the financial crisis and emerge stronger than ever. Interestingly thespeakers focused on simple things rather than big splashy investments. Frankly I thinkthat's good news—it has never been possible to buy your way to great service, thoughmany organisations have been deluded by the claims of people with a product to sell.Great service is usually cheap (often cheaper than dealing with the fallout from bad serv-ice) if you can figure out how to do it right.

IN ESSENCE THERENAISSANCEWAS SIMPLYTHE GREENEND OFCIVILIZATION’SHARDESTWINTERS.

Conference

Jo Causon—ICS

Jo used her Chief Executive spot to posi-tion the ICS at the forefront of a"renaissance in customer service", start-ing with a need to demonstrate return oninvestment in the customer with the eco-nomic climate as it is.

Where is customer service today? Joused figures from the January 2010UKCSI (see last issue for more details) toargue that the recession has galvanisedcompetition for footfall in retail, and othersectors, leading to a greater focus on thecustomer and gains in satisfaction. Jo also

reported on an ICS survey of memberswhich found that 88% of people believethat their board sees a link between cus-tomer service and profit—people are atleast saying the right things at board level.

What keeps chief execs awake at night?From conversations Jo has had, shebelieves the main things are technologyand the need to personalise service. Iwonder to what extent these two thingsare complementary opposites? In otherwords, if we provide effective automatedor self-service options, where appropriate,does that free up time for better personalservice when it matters?

Where does the ICS fit into all this? Usingresearch into member priorities last year(including focus groups moderated byyours truly) Jo has made some radicalchanges to the organisation in the pastfew months, restructuring the organisationto offer members a simpler route into ICS,improving communications, and position-ing ICS as the place to go for informationon customer service. Backing this up is aprogramme of literature reviews andresearch, including some new researchaiming to prove the ROI of investing incustomers.

88% OFPEOPLE BELIEVETHAT THEIRBOARD SEES ALINK BETWEENCUSTOMERSERVICE ANDPROFIT.

WE AREHEREBECAUSEWE BELIEVETHATCUSTOMERSERVICE ISIMPORTANT.


Conference


Roger Martin-Fagg—Economist

Roger gave us his thoroughly depressing,though entertainingly and clearlyexplained, vision for the future of the UKeconomy, entitled "why a sustained recov-ery is highly unlikely and what the comingyear will look like". I'll leave Roger's expla-nation of how we got into this mess to oneside; even though he gave the clearestexplanation that I've heard of the nationaleconomy, how credit relates to GDP, andwhy the extent to which banks are lever-aged matters. His prognosis is that we arein for a seven year period during which "itwill feel tough" for individuals and busi-nesses, a period during which we will allhave to get used to working from equityagain.

What does that mean for customers andemployees, I wonder? Roger didn't reallytouch on this, but I think it's likely to meanthat employee satisfaction may suffer(though job security is likely to be moreimportant than ever). Data from the UKCSIhas so far shown an increase in satisfac-tion during the recession...but will thatlast? Even if suppliers realise that cus-tomer service is vital during tough times,they will need to achieve that service withfewer resources. One likely outcome isthat consumer choice is reduced—notnecessarily a bad thing.

Julie Southern—Virgin Atlantic

Julie talked us through the way VirginAtlantic coped with 2009—a traumaticyear for the airline industry. She sum-marised the industry as consisting of a mixof perenially hopeless, state-supported,airlines with a scattering of profitable ones,and asserted "never has an industry exist-ed which has routinely destroyed so muchshareholder money."

A large part of the painful process VirginAtlantic had to go through was losing a lotof staff (from 9,000 at the beginning of2009 down to 7,500). Interestingly, theystarted this process at a time when rev-enues were ok, but they knew trouble wason the horizon. This meant they were inthe difficult position of dealing with redun-dancies whilst announcing profits and

even paying bonuses. They knew that thefuture of the business depended on keep-ing the cash position healthy, but they alsohad to look after staff morale and, ofcourse, the brand.

The new concept that Virgin Atlantic ispinning its sales on is "discounted deca-dence", in other words "it's okay to treatyourself, because you know it's fantasticvalue". Fundamentally, though, despite aninvestment in new planes, Julie sees thekey differentiator for the Virgin brand as itspeople. In the interview which followed hertalk, Chris Daffy asked Julie how they "hirefor attitude"—something which is ofteneasier in theory than in practice. Theanswer, in Virgin Atlantic's case, is a mix-ture of formal psychometric methods (I'dbe interested to know which ones—there's a lot of pseudoscience in this field)and informal methods based on analysing

the background of stars (e.g. apparentlypeople from divorced parents are better atcustomer service).

Lynne Copp—The Worklife Company

Lynne started with a simple question—why do people dread coming to work ona Monday morning? She took the plati-tude that most people come to work to doa good job, and turned it into a subtle andinsightful point—people's work ethic, likeany other characteristic, is normally dis-tributed. Managers spend up to 85% oftheir time on the bottom 3% of that distri-bution (what we might call the activelydisengaged). The big question is whetherwe set up our organisational cultures tomanage the 97% or the 3%.

The current paradigm, Lynne argues, is"performance culture"—managers' job isto stare at numbers all day. People arereferred to as "headcount" or even, at oneorganisation, WCRTs—"walking costreduction targets". Companies want morefor less, which results in increased work-

load (does the work go away just becauseyou've made redundancies?) and a longhours culture. Lynne quotes stats showingthat we work 46% longer hours than EUcountries, and we're 27% LESS produc-tive because of it. Long hours is "the onlyaddiction we reward", and one that has adirect correlation to illness. It also leads toreduced innovation and efficiency as wellas poor service. Ultimately, Lynne argues,the price is increased absenteeism whichmeans increased costs, leading either tocuts in service or another round of down-sizing—a potential death spiral.

So what's the future? Lynne hopes thatthe pendulum is swinging towards a focuson people—flexible working, worklife bal-ance and so on. The goal is an "engagingculture", which has the same four dimen-sions as the performance culture, but adifferent starting point.

Start with a compelling vision, then askyourself what kind of people you need.Following that, some of the essentials forcreating an engaging culture:

· External focus· Innovation and collaboration· Play to strengths (focusing on weak-

nesses just makes everyone average)· Flexible mindset—what are you doing

to keep yourself ahead?

The payoff is that 75% of current process-es are waste. As Lynne puts it, "imagine ifyou had 75% of your time back. Imagine ifyou had a third!"

Steve Settle & Jo Tomb—Toyota

Of the first day's breakout sessions I choseto attend the one by Toyota, who threw outtheir original talk ("From measurement toaction") and tackled their recent recall crisisinstead. It was an interesting use of an exist-ing platform as part of a strategy of tacklinga difficult situation, in which the companyclearly feels it has been unfairly treated.

RESULTSPRODUCTIVITYQUALITYPEOPLE

Engaging Culture


Conference

Steve began by outlining what lay behindthe recall—in a handful of cases (20reported across the whole of Europe) theaccelerator pedal could stick. He alsowanted to place this in context—in the last2 years there have been 300 safety recallsin the UK, of which Toyota have had 4. Heencouraged us to have a look at theVOSA site to understand the severity ofsome of the others by comparison. Theunspoken point? This was a press-fueledstorm in a teacup. He went on to say thatthe Pius recall was not for safety reasons,in fact VOSA refused to allow Toyota toregister it as a safety recall, but just thatthe braking system "felt funny" to somedrivers under some circumstances.According to Steve the most accuratereporting during the crisis was in the Sun.The impact of the press on their businesswas very tangible—the day after the mostalarmist headline in the Daily Mail ("Don'tdrive your Toyota") call volumes rose froman average of 700 to 14,000.

Interestingly, the impact on staff moraleseems to have been basically positive—pulling together in the face of a crisis.During the crisis everyone worked week-ends, extended opening hours, and allhands manned the phones. The networkwas challenged to handle 6,000 repairs aday, wihle Toyota had to source 50,000parts (in three different sizes) in three daysand train 1,200 technicians in making therepair in the right way.

Ashridge Business School

For my second breakout session, I chosethe session by Ashridge Business Schooldiscussing their research for ICS into thereturn on investment in customer service.They had little to say so far—this wasmore of a launch than a presentation offindings—but this is definitely a pro-gramme to watch. Having completed aliterature search to build a theoreticalmodel and a survey, they plan to move onto detailed case studies. Head to the ICSwebsite to find out more.

Usefully, and unusually, their conceptualmodel starts with what they call "activities"rather than "drivers"—in other words theywant to be able to quantify the impact ofthings that organisations DO, rather than theimpact of outcomes such as satisfaction.

Liz Jackson—Great Guns Marketing

You might recognise Liz's name from herappearance on The Secret Millionaire. Lizshared her life story, starting with 1 GCSEin Drama. Discovering that, though shemight be rubbish at spelling and grammar,she was great on the phone Liz went on tofound Great Guns Marketing in 1998. Heradvice for personal success? There's nosuch thing as luck. Don't be the nearlyman or woman ("last year I nearly sailedaround the world"). If you think you can, oryou think you can't, you're right! Whatabout running a business?

"SMART goals are absolute pants."

"You don't learn anything from success."

"There's no such thing as a perfectperson, but there is a perfect team."

"When you recruit people who arebetter than you it can make you feel

inadequate."

Her talk was littered with gems, some ofwhich you can see above, but perhaps myfavourite was "I don't think you ever stopselling to a customer"—you have to workconstantly to understand their needs, havethe courage to sit down with them whenthings go wrong and talk about it.

RETURN

The ROI of Service?

DRIVERSACTIVITIES

WHAT HAPPENEDIN THE US WASCOMING THROUGHTHE PRESSQUICKER THANTHROUGH THECOMPANY.

I DON’T THINKYOU EVER STOPSELLING TO ACUSTOMER.

S

Stephen Hampshire

Client ManagerThe Leadership Factor

Stephen manages customer and employee

surveys for RBS, NatWest, Visa and Pace

amongst others. He also presents training

courses on employee surveys, customer

surveys and data analysis.

[email protected]

Case Study


Improving customer service

What had happened in that year? No cus-tomer service initiative, no changemanagement programme, no extensivecustomer service training, but many smallconcrete actions. The senior managementteam launched the focus on customerexcellence at their Annual Company Dayand overnight put up posters in the com-pany, so when people walked in the nextday something had visibly changed. Cliveand his leadership team constantly talkedabout customer service and when makingdecisions asked “Does this deliver cus-tomer excellence?” All customer feedbackis shared with all employees and so isfinancial information. Cougar organisedinternal training to help staff to understandand interpret customer survey data andfinancial information. “When the assessorsfor the customer service excellence awardcame to visit Cougar, every one of the 56employees was encouraged to talk tothem freely and give any information theyfelt appropriate. The assessors wereimpressed with the access to informationthat staff had.” says Clive.

Enlightened people management

Parallel to the focus on customer excel-lence Clive introduced some radicalpeople management concepts into thecompany. People are encouraged to playto their strengths using MarcusBuckingham’s strengths inventory andstrengths based recruitment. Cougar hasno annual appraisal but a developmentreview which involves no judging or meas-uring of past performance as that iscovered throughout the year by customerfeedback. The conversa-tion invites the employeeto identify what dragsthem down and actions toreduce this; what theyenjoyed and how they cando more of that. It is theemployee’s responsibilityto re-organise their workso that they play more to their strengths.These re-organisations happen mostlywithin the project teams. People have totalflexibility when and where they work anddecisions are made at the most appropri-ate level. Clive for example does not get

involved with customers as that is the roleof Cougar’s sales people and projectmanagers while he sees his role as the“guardian and architect of the philosophyand structure of Cougar”.

Ensuring performance

In Clive’s experience people’s perform-ance varies in the short term mainly due toexternal circumstances outside of theircontrol but is consistent over a longerperiod of time. When things go wrong,

people make mistakes ordon’t perform to therequired standard, thequestion asked first atCougar is “Are they playingto their strengths?” andhelp is offered to explorehow they could operate dif-ferently, rearrange their

work or find a partner to learn from.Employees can choose a sponsor thatsupports them in their development.People who have not performed havetended to leave of their own accordbecause they did not want to let their col-

When Clive Hutchinson bought Cougar Automation 8 years ago, the company was in trouble. Sixmonths after he took over, they posted a substantial loss. Clive started addressing the issuesstep by step and once the financial situation was sorted he focused on customer service. From2003 to 2009 turnover has increased by 168% and profit by 245%. When Cougar entered TheUK customer experience award in 2004, 80% of the entrants were better than Cougar. A yearlater they won their category.

“If people lovewhat they do,they like comingto work and willgive their best”

ManagementEnl ightened

gets resu l ts

FREE

leagues or customers down. Cougar doeshave a disciplinary process, but it isn’t usedoften. Absenteeism or negative morale arenot issues at Cougar. “If people love whatthey do, they like coming to work and willgive their best” is Clive’s experience.

Management and Leadership

Four out of the six senior leaders are elect-ed at Cougar, an idea taken up after twomembers of staff saw a speaker from WLGore. Team members can select the proj-ect team they want to work on, if there isrequirement for their contribution.

Cougar’s philosophy changed from “Sell-deliver-collect” to a vision of “10/10 forcustomer service; Happy cats (the namefor cougar staff) and Zero waste” and canbe communicated in one picture. Newregional offices are opened when mem-bers of staff present a business plan to theboard and show that they have researchedthe area and are prepared to take a per-sonal risk by for example moving into thearea. They then need to find people whowant to work for them either internally orexternally. Decisions in their office are upto them.

Does it work then this enlightened

management?

Cougar has won customer service awardsin 2005, 2007, 2009 and was among TheSunday Times best 100 SMEs to work forin 2009.

From 2003 to 2009 turnover has increasedby 168% and profit by 245%. Customersrating Cougar’s work 7 and over haveincreased in that period from 37.5% to95.7% and Customers rating Cougar’swork 9 and over from 0% to 63%.

Could you do it in your company?

Cougar so far has been the only companyI have encountered that has implementedsome well researched but still radical prin-ciples on people management. “When Igo to networking events, I am the alien”says Clive. We would love to supportother businesses putting these principlesinto practice. If you run a company or divi-sion and can influence strategy andpeople management, if you are successfulbut your people could be happier, or if therecession has left your company in a weakposition and you would like to implementsome of these principles – give us a call.

Are you doing it already?

We are also interested to hear from otherleaders who implement some of theseprinciples in their business to organise aget together to share ideas and inspira-tion. Please get in touch with either Utaor Clive.

For a FREE report on how to implement some of

these principles, please e-mail

[email protected] and put

Enlightened Management in the subject line.

Clive Hutchinson has been interviewed by Uta

Langley from 2 the point training.

Uta Langley, www.2thepointtraining.co.uk ; Clive

Hutchinson, www.cougar-automation.com

In employee surveys employees say that:

Colleagues go out of the way to help (87%)

Managers share important information (80%)

Employees feel happy with the balance of work and home life (79%)

Staff are happy with pay and benefits (73%)

Hutchinson runs Cougar Automation on sound moral principles (80%)

Staff love their jobs (80%)

Uta Langley, founder of 2 the point training, is an experienced trainer, facilitator and coach and has been working with groups for over 20 years. She

has a record of success in initiating and carrying through a wide range of change management and management development projects involving all

levels within an organisation. Uta has a background in international sales and marketing and has been working with a wide range of individuals and

businesses from owner/managers of small businesses to senior executives in blue chip companies and public bodies.

Uta is also tutoring the Women into Enterprise course at the University of Bath.


Case Study

S

Research


Sarah StainthorpeResearch Manager:

The Leadership Factor

email: [email protected]

Sarah specialises in using data mining to

provide customer insight to Direct Line,

Churchill and RBS amongst others.

The three types of self-completion surveymethod we are going to cover here are:

· IVR (Interactive Voice Response)· Text· Point of sale

With IVR surveys, there are two mainways of administering the survey. Firstly,customers can be given a freefone tele-phone number to call where they connect

to the survey and answer pre-recordedquestions, using the buttons on theirphone or speaking. This telephone num-ber can be given to customers on aone-to-one basis, for example sentthrough the post to them or at a face toface point of sale, such as on a till receipt.Alternatively, the survey telephone numbercan be publicised en masse, for example,on a company’s website. The second wayof administering an IVR survey is to trans-

fer customers to the survey from the callcentre after they have called your compa-ny. If this happens the customer would nothave to pay for the cost of the survey call.

This second way also has different optionsas to how the customers’ call can be trans-ferred to the survey. The moststraightforward option is that customersare manually transferred to the survey aftertheir call. This is done by the member of

In the last edition of Stakeholder Satisfaction we discussed the pros and cons of different survey methods. Inthis article, we will go into more detail about some of the latest self-completion methods, which we had saidwere useful for conducting transactional customer experience research in particular.


Research

staff who has been speaking to the cus-tomer, who first needs to ask if they arehappy to take part in the survey. However,one obvious problem with this option is thatthe staff member could choose not to askcertain customers to take part, for exampleif they felt that the customer was not happyand may give a poor score. Transfer ratesby staff member can be monitored though,allowing you to see if certain staff memberswere transferring fewer customers to thesurvey than others. It should be noted thatstaff selecting the respondents doesencourage ‘buy in’ from staff as it is difficultfor them to challenge the results when theythemselves have selected the respondents.

To overcome the problem of ‘cherry pick-ing’, rather than manual transfer by the staffmember the customer can be asked if theywould like to take part in the survey beforethe call, via a pre-recorded message beforetheir call is connected to a staff member. Ifthe customer has indicated that they wouldlike to take part, they are told to hold theline once they have spoken to the staffmember. However, the problem here isthat customers may forget to do so. Analternative option is that instead of holdingthe line at the end of the call, the customeris offered a call back facility if they want totake part in the survey. They are then calledback and automatically connected to thepre-recorded survey.

With text message surveys, customersare sent survey questions via text mes-sage to their mobile phone. Questionscan be closed, or open-ended to obtaincomments. One question is asked pertext and as with other surveys, questionscan be routed so that the customer getsasked different questions, depending onthe responses they have given. As analternative to sending out specific surveyquestions, like with the IVR option, a textmessage number can be advertised, invit-ing open-ended feedback fromcustomers, for example at an event.

Point of sale surveys capture customerfeedback at the point of sale where thecustomer interaction is face to face.Customers access the survey at kiosksand fill in the survey immediately after theinteraction they have experienced.

The advantages of these survey

methods outlined are...

Real-time reporting is usually available.

The experience is still fresh in the cus-tomer’s mind, particularly for point ofsale and IVR surveys where the cus-tomer is transferred straight from theircall to the call centre.

These type of surveys tend to be costeffective, particularly to obtain enoughsurveys to measure individual staffmember performance.

You don’t need to have a customerdatabase, customer feedback can becaptured face to face at the point ofsale, or a text message number or IVRsurvey telephone number can beadvertised. In this way, IVR could infact just be used as a means of allow-ing customers to register their interestin taking part in research, such as atelephone survey or focus group.

Good for engaging staff and motivatingthem to understand what customersthink of their organisation and specifi-cally to understand their ‘own’customers’ satisfaction, as the lowercost allows for results at an individualstaff member level. As IVR provides‘vox pops’ or ‘sound bites’ from realcustomers, it is a useful tool for ‘bring-ing the customer to life’ for staff.

Useful to measure the incidence of cer-tain actions or staff behaviours thathave been identified as having a posi-tive impact on customers’ satisfaction.For example, the survey could askwhether the staff member had offeredto pack the customer’s shopping forthem at a supermarket. This type ofmeasure was often traditionally trackedby mystery shopping, but is obviouslymore credible if the findings are fromreal customers.

Good for getting customer feedbackfrom people without internet access.

These surveys are often completelyanonymous.

The disadvantages of these survey

methods are ...

There is a fairly limited number of ques-tions compared to other self-completionmethods such as postal and email sur-veys. The surveys really need to berestricted to a duration of a couple ofminutes. IVR surveys should be nomore than ten questions and text sur-veys should have a maximum of fivequestions. However, there is the oppor-tunity to rotate the questions asked tocover a wider number of questionsacross the survey.

To measure the true end to end cus-tomer experience the surveys that takeplace at the point of interaction, or imme-diately afterwards, may be too soon tomeasure customers’ true satisfaction.For example, at point of sale, the cus-tomer has not yet got the product hometo see if they are happy with it and that itdoes meet the requirements outlined bythe member of staff. The customer has-n’t yet found out whether the promisesstaff made were kept or the advice givenby staff was correct.

Text message surveys are limited topeople who have mobile phones anduse text messaging which may limitinput from the older generation.

Text surveys cost the customer to sendresponses, but as many people are onpackaged deals with a certain numberof free texts, this should not affect toomany people.

These survey methods often represent atrade off, where greater volumes ofresponse are gained at the expense ofreduced quality and depth of information,and therefore understanding. One of themain benefits of these methods is the lowercost allowing for greater volumes to obtainindividual staff member results. They areperhaps therefore often functioning moreas a staff engagement tool than a replace-ment for statistical customer experiencemeasurement. The ‘vox pops’ capturedcan also be relayed back to employees tobring customer feedback to life, furtherboosting employee engagement. S

Motivating people

These are the first words you will read onthe inside front cover of the latest offeringfrom Dan Pink, author of ‘A Whole NewMind’. Since managers striving to improvecustomer satisfaction and loyalty are con-stantly trying to motivate employees tokeep promises and commitments, to gothe extra mile to help customers, under-stand customers, keep them informed,take ownership, solve the problem etc etc,it’s very relevant to anyone in a customermanagement role. Have they been doing itwrong for all these years? Let’s find out.

Intrinsic or extrinsic rewards?

The Leadership Factor Client Conferencewas closed by Richard Kimber who won-dered whether there’s a disconnectbetween ‘what science knows’ and ‘whatbusiness does’. Richard pointed out thatmost organisations still attempt to moti-vate most employees using traditional‘carrot and stick’, ‘if – then’ rewards; basi-cally extrinsic reward systems, but if theyswitched to an intrinsic, self-motivatedmind-set could it revolutionise their abilityto deliver great customer service?

Pink lists seven problems of traditionalcarrot and stick motivation systems:

· They can extinguish intrinsic motivation· They can diminish performance· They can crush creativity· They can crowd out good behaviour· They can encourage cheating, short-

cuts and unethical behaviour· They can become addictive· They can foster short term thinking.

Continuing in challenging vein, Richardsuggested that management is unnatural,leadership is natural. Putting people in anunnatural management situation thereforecreates inter-personal tensions, resultingin most employees who leave their jobactually leaving their boss rather thanleaving their company. Extrinsic rewardsonly work with a narrow range of repetitivetasks such as piece-work or traditionalproduct line manufacturing.

In “Drive: the surprising truth about whatmotivates us”, Dan Pink highlights threekey human attributes that make most ofus more intrinsically motivated:

AutonomyMost of us want to direct our own lives, tobe in control of what we do and how wedecide to do it. A significant cause ofstress is said to be ‘role conflict’, wherepeople are forced into situations, tasks orroles that are outside their comfort zone oralien to their personality and beliefs. This isexacerbated if they have make no-winchoices between conflicting roles e.g. aboss who wants them to work long hoursand a partner that wants them to comehome early to help with young children.

MasteryThis is the urge to be really good at some-thing. People are always proud of

‘mastery’, whether it’s playing a musicalinstrument or being the best brick layer ona building site. It makes them feel good.

PurposePeople also feel good about spendingtheir time doing something that’s impor-tant, useful or beneficial in some way.

Autonomy

Organisations and managers often grap-ple with the trade-off between autonomy

Drive:The Surprising Truth about what motivates us

Daniel H Pink

Cannongate Books, £12.95

Book Review


FORGET EVERYTHING YOUTHOUGHT YOU KNEW ABOUTMOTIVATING PEOPLE - ATWORK, AT SCHOOL, ATHOME. IT’S WRONG.

and control. Pink is convinced they err fartoo much towards the latter, so trying totake some steps towards more autonomyfor employees would be a positive move.Pink suggests several practical ideas suchas…

Encourage peer-to-peer rewardsIntroduce a budget where employees canaward a small monetary bonus or prize tocolleagues for going the extra mile to ben-efit customers.

Conduct an autonomy auditDo a really quick survey asking yourdepartment or team to score four simplequestions on a 10-point scale (where 1means ‘hardly any’ and 10 means ‘a hugeamount’) asking employees how muchautonomy they have over:

Your tasks at work – what you do on agiven dayYour time at work – how you allocate yourtime each dayYour team at work – to what extent youcan choose the people you collaboratewith on tasksYour technique at work – how you per-form your tasks

Introduce DIY report cardsAsk your team members to specify theirtop objectives at the beginning of eachmonth. At the end of the month ask themto score themselves on the extent towhich they have achieved their objectives.If not why not and what they plan to dodifferently next month. Have monthly one-to-ones with team members where theemployee’s and the manager’s reportcards for the employee are compared anddiscussed.

Mastery

If Pink is correct, mastery has major impli-cations for maximising employeeengagement. One implication is thatorganisations should trust people to dotheir jobs how the employee thinks best.This is ‘autonomy’, and Pink splits it intofour elements, the 4 Ts:

Task = whatTime = whenTeam = with whomTechnique = how.

Fedex gives employees one day permonth when they can do whatever theywant, but they have to make a presenta-tion about it the next day. Othercompanies have copied this idea, some-times with fantastic results. Google gotGmail out of a ‘Fedex day’. Other compa-nies let employees organise themselvesinto project teams or replace productionlines by manufacturing cells where teamsof employees carry out a much biggerpart of the manufacturing process, organ-ising themselves in their own way.

The bigger implication for organisationsstriving to improve employee engagementis whether they seek to do it through anintrinsic or extrinsic reward and manage-

ment culture. If Pink is correct, employeeengagement will not be improved by man-agement implementing a series ofmeasures to ‘make’ employees moreengaged, but by liberating employees tomanage themselves and consequentlybecome more engaged as a by-product.

Employee surveys

One good starting point is to includeautonomy, mastery and purpose ques-tions on your employee survey and in allemployee appraisals, personal reviews orone-to-ones. Autonomy questions caneasily be split into the 4 Ts. Typical ques-tions that relate to mastery include beingproud of your job, being proud of theorganisation you work for, having the rightskills for the job, having the right tools /equipment for the job, having sufficienttraining for the job. Purpose can be cov-ered by questions such as understandingthe purpose / mission of the company,doing worthwhile work, how you / yourjob helps the organisation to achieve itsobjectives, how the company or its prod-ucts / services benefit society. S


Book Review

Richard Kimber

Richard is Client

Manager at The

Leadership Factor,

working with

companies such as

VW / Audi, Co-op Business Banking, Xerox,

Hilti, Principality Building Society and

Lombard Vehicle Management.

Richard can be contacted on 01484 517575

or email:

[email protected]

Half day Briefing

Co-creationDelivering the customerexperience the customer wants£155 (excluding VAT)

The Leadership FactorTaylor Hill MillHuddersfieldHD4 6JA

Tel: 01484 517575Fax: 01484 517676 Web site: www.leadershipfactor.com

Tuesday 12th October 20109:30am - 12:30pmCentral London: Gloucester Road Tube Station

For a detailed agenda please contact Sandra on 01484 467000or email [email protected]

For more information or to book your place visit:

www.leadershipfactor.com/training

Part 1: “With customers, not at customers”· An overview of co-creation and what it has to

offer any organisation.

Discussion/workshop on how we could start usingco-creation

Part 2: “Co-creation & culture”· Co-creation only works when you have good,

engaged staff...but culture is about boards aswell as the coalface - what are the links?

Discussion/workshop on achieving a culture that delivers

Part 3: "Co-creating complaints"· Why the lessons of co-creation are even more

important at moments of truth, and how totake advantage of that.

Coffee and Registration

Stakeholder

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