Back in July 2010, Sainsbury’s announced that it was scrapping the HR Director role and creating instead a single role that would encapsulate HR and Customer services. The new Customer Services & Colleague Director, in addition to having one of the longest business cards, would take responsibility for HR, customer services, sponsorship, corporate responsibility, and both corporate and internal communications. A huge role then, and massive undertaking that was described by Gwyn Burr, who was promoted from the role of customer service director, as “an opportunity for HR to become much more focused on strategic delivery”.
So, fast forward 30 months to the announcement that Burr will leave Sainsburys in March 2013 and that Angie Risley, current Lloyds Bank Group HRD will take over as Sainsbury’s Group HRD. It was clear from this announcement that this also signifies a demerger of the customer service and HR roles so should we conclude that the initiative failed?
It was only in 2004 that Sainsbury’s first created the position of Customer Service Director with Justin King, then and still CEO, bringing in ex-Asda colleague Gwyn Burr to the role. At the time he felt the customer service needed to be improved dramatically and although Burr sat on the Board she remained a contractor. She also held, and continues to hold, a number of non-Executive Director roles and whilst this isn’t unusual for board members perhaps in this case it indicates that the move was always temporary.
Certainly Sainsbury’s customer service has improved and they have now moved ahead of their rivals. With various initiatives over the past few years the retailer has tackled the causes of poor customer service with training and technology initiatives as well as better use of the web and the introduction of Click-and-Collect, which has been rolled out to more than 900 stores.
The evidence would suggest that we shouldn’t read into this latest announcement that the HR/Customer Service mash-up initiative has failed. Perhaps the greater focus on strategic delivery has worked and now Sainsbury’s is simply putting in place an organization structure that will keep it moving. We will certainly be watching with interest.
This week’s People Management magazine, the HR magazine of CIPD, featured an interview with Gwyn Burr, Sainsbury’s “Customer Service and Colleague Director” in which she described the changes t the organisation since she undertook the combined role in July 2010. The role was designed by Sainsbury’s CEO Justin King specifically so that Burr could “maximise her experience and personal strengths” and I wonder if it is due to an even wider opportunity that he has seen.
Many of the areas that Burr speaks about in the interview concern her commercial skills and how these are being leveraged into HR. There is also reference to customer focussed activities that are being repurposed for colleague initiatives and mention of touch-points with customers. If the move was born of pragmatism and promoting a talented individual only I would be surprised because I think it could be an inspired decision that takes HR in a direction I have long thought it should go – Customer Experience.
So much of customer experience excellence is about the strategy surrounding and the management of the touch-points that exist between organisations and their customers. Many of these touch-points are at the mercy of individuals within the organisation who are both expensive, compared to self-service, and unpredictable. What better way to align HR strategy with customer strategy than by bringing the two together?
I attended an event recently where research was presented by Gallup that highlighted the relationship between employee engagement and customer engagement. Organisations that had either only good customer or employee engagement performed at about the same level but those that had both out-performed the others by a factor of 2:1 (or thereabouts). That might seem obvious but what was interesting was that companies that had neither good customer engagement nor employee engagement performed better than those with only good performance in one area – customer or employee engagement.
Sainsbury’s has just focussed on customer services and HR at this stage but I wonder whether they will go further and widen the responsibilities if the initiative is a success? Should they or is there the potential for stripping some of the primary value away from marketing? I’d be interested in views on this.
On Wednesday I ran a customer experience master class for Marketing Week as part of the Customer Retention conference. With a colleague, we shared some thoughts with just over 10 senior marketeers during the one day workshop about why having a customer experience strategy is critical to services businesses today and introduced some models that they could put into practical use.
Although over ten years old now, I used the concept of progressing economic value introduced by Pine & Gilmore in their book (Experience Economy 1999) to explain why customer experience strategies can help businesses differentiate. For those unfamiliar with the concept it deals with the evolution from commodities to goods to services and then experiences with increased differentiation, premium pricing and closer alignment with customers needs as you move up the progression. The book uses a coffee example to illustrate the progression from commodity (bean) to goods (ground coffee/packaged coffee) to service (Cafe coffee) to experience (Starbucks coffee) and it easy to understand from this the increasing pricing and differentiation associated with each step.
The big challenge of course is getting from a service to an experience – an experience being something memorable for the right reasons; it is easiest to be remembered for delivering a poor service as the image from Passive Aggressive reveals:
Most organisations seem to struggle with the balance between mass customisation and commoditisation of services. If you read my blog about Starbucks I alluded to this very problem. In their drive toward lower cost service delivery they have made decisions about the technology they employ that actually damages the customer experience (IMHO). They hoped to increase the interaction time between Barista and customer but in the process devalued some of the theatre.
The nature of the feedback shown in the photo links me nicely to the subject our guest speaker Guy Stephens spoke about which received a great deal of interest: using social media as part of a customer service strategy. Social media is a fairly instant feedback technology and is increasingly used by disgruntled customers to make their feelings known – perhaps not in as interesting a way as with the use of ketchup and mustard.
It was very interesting to hear about the issues big companies were facing when dealing with social media. In one example a member of staff who used social media in their private lives had decided to get involved on the Twitter feed to try and help customers or deal with the issues of disgruntled customers only to be told not to by PR and legal teams. Similarly there were stories of brand conflict and a lack of clarity about how the process would be managed.
There is clearly a great deal of confusion from big brands about how to deal with social media and of course the problem is not helped by the fact that most senior managers are (in general) poorly educated about social media not being from the “born digital” generation. Nevertheless, customers are using social media sites in their millions and are commenting and debating their experiences (good and bad) with brands all over the world.
Social Media of course is only one set of touch points that brands have with their customers. We ran an exercise at the event to identify different touch points and see if we could get anywhere near the 100 or more that one of our travel clients claim they have. We managed to get well over 50 before turning our attention to user journey mapping and the connections between the various touch points at our disposal.
Finally we discussed measurement strategy and the common errors that companies make. Once again I found that most organisations don’t have a clear measurement strategy and few of the people at the workshop had clear links between the measures and KPI’s they used on a daily basis and the business plan and objectives. Of course the solution is obvious and everyone knew the answer before I presented it but it is clear that in the cut and thrust of the day to day lives of a marketer it is often hard to address this key issue.
Delivering a differentiated customer experience didn’t feature as a strategic goal of any of the companies we met and yet during the afternoon’s practical sessions more than one described their organisations strategy as being to differentiate (rather than lowest cost or focus for those familiar with Porter) from their competition. All seemed to leave the workshop believing it is important but I worry about their ability to make anything actually happen given the silos that exist within organisations. Perhaps a major competitive shift will be the driving force but I think this is an incremental opportunity given the scale of the task.
So we can all rest easy now that Starbucks have managed the “crack the customer experience code”. This was reported across the “wire” after Starbucks CEO, Chairman and President Howard Schultz reported record earnings and explained that Starbucks had lost its way and would rediscover its “laser like focus on customer experience”. In fact the code cracking report wasn’t quite true and what Schultz actually said was that they have been able to “crack the code at creating and environment where people are treated well, they’re respected and they’re valued” as Carmine Gallo reported for Business Week.
I like what Schultz has to say and he certainly comes across as a man who is passionate about what he believes in which in essence is that if you get the staff environment right you can get the customer experience right. I believe the staff element is a contributing and potentially critical component of the customer experience but there is more to it than that. I am not sure that you can really crack the code of customer experience or even that there is a code to crack.
The code analogy is a useful starting point when thinking about how to discover the solution for providing a differentiated customer experience but in fact we need to move on to puzzles quite quickly. A code is a secret language designed to hide the meaning of a message and I am not sure that the mystical secrets of customer experience have been deliberately or unconsciously hidden from us. More likely this is a puzzle where all the pieces are visible and known and our challenge is to get them in the right combination in order to reach the solution. For this we need a vision of what the end should look like so that we can started fitting together the pieces.
Schultz certainly understands a key piece and that is that front-line staff are the brand in human form. He also talks about the need for theatre and this is further investigated by two previous Starbucks marketeers in the blog “Brand Autopsy”. The post I link to here describes in detail the internal issues surrounding espresso machine selection as it would seem Starbucks have selected a semi-automatic machine for stores that need high through-put and manual machines for those where the pace is slower. The rationale for the selection by Starbucks besides speed is that the semi-automatic machine would provide the Barista with more time to interact with the people because they would be spending less time making coffee.
The blog authors draw the wrong conclusion to me when they say that the automatic machine would not “detract from the customer’s experience because their experience is based upon the need for speed. I don’t agree with this and also don’t think it reflects Schultz view of the world. If speed is the only differentiating factor then it is going to be short lived as anyone can make a fast espresso when it is the machine doing the work. Surely the need for theatre exists in every Starbucks and long run shareholder value is not created by building a brand that is based on volume in what is the epitome of the experiential industry?
The business model seems to me to rely to heavily on staffing with low skilled and low salaried people. If you analyse the earnings report the revenue growth is marginal and the operating margin is up due to costs savings from stores closed in 2008 (100 in the US) vs. store openings in the US of 53 in 2009. Internationally store openings are up year on year but references to “in-store labor efficiencies” in the earnings report that have driven costs savings in store operating expenses do not point to an experience rich strategy.
There are examples of this low cost staffing model working, say at ASDA in the UK, but the recruitment strategy is fundamental. ASDA use assessment centres to select store staff and they were the first and I believe are still the only grocer to do this. Expensive yes, needing of time and energy also yes but they get staff that like people. David Smith, formerly Director of People at ASDA is writing a book on the subject and spoke about his experiences at this years CIPD annual conference and how ASDA transformed the way they selected their people.
Another code breaker that brings the brand dimension to the argument is Lois Boyle who wrote in 2007 about “cracking the multi-channel code: The Brand Experience“. Her explanation of how brands create a differentiated and personalised experience I particularly like. You do this, Boyle says, “by creating a differentiated brand that can be translated into meaningful benefit and then delivered in an engaging experience that will connect with the hearts of customers and prospects” and goes on to explain that this is a process that “must be defined and managed”.
Too often the creation of a differentiated customer experience is
This is brilliant! http://producten.hema.nl/The website is from a Dutch retailer called HEMA. Their first store opened on November 4, 1926, in Amsterdam and now there are 150 stores all over the Netherlands . The link is to HEMA’s product page and although you can’t order anything and it’s in Dutch if you wait a couple of seconds things start to happen.
Management Today’s March 09 issue covers Customer Experience in their Master Class column. This is a regular feature that reviews the latest terminology and trends and at the bottom of the piece a ‘Fad Quotient’ is offered. I was disappointed to see that Customer Experience received a 7 out of 10 and so I decided to write to the editor to explain where I think they are misjudging the area.
Customer Experience Master Class
Your customer experience master class was accurate and informative right up to the final section on the direction it is going where I think you missed the point.
Whether consumers or customers are hard up or affluent is irrelevant. They will be interacting with organisations and brands and judging them either consciously or subconsciously based on the quality of those interactions and that in turn will impact their likelihood to recommend or return. Just because an organisation doesn’t embrace customer experience it doesn’t mean their customers won’t have an experience. This is the fundamental difference with CRM.
Customer experience strategy is not only about differentiation it is about consistency with brand perceptions. So taking your example of Travelodge – it is quite acceptable to be an economy brand provided the experience meets or exceeds those expectations. Ryan-air personify this with an awful experience but one that nobody is surprised about.
The reason the Internet accelerated the adoption of customer experience thinking is that to do it well you have to think holistically. Most organisations treated their web presence as a separate business and the level of autonomy that created meant that for the first time someone could genuinely impact most if not all of the contact points in the customer interactions. That knowledge is helping drive the benefits in to other, older channels.
The term ‘Customer Experience’ may warrant a 7/10 for FAD effect, but what it relates to clearly cannot.
Recently, Tesco changed the packaging of their Coleslaw. Not exactly front page news and I suspect their motivation was driven by a desire to reduce the amount of packaging they use – or was it cost saving, I can’t decide. The outcome either way is that I can now no longer tell when my coleslaw goes beyond the use-by or best-before date.
The reason? Tesco used to provide a plastic clip-on resealable lid over the thin cellophane film that sealed the coleslaw from the outside world and on the lid was printed the use-by date. They have removed this lid and printed the use-by date on the thin film. The problem is that the film disintegrates when you try and remove it and so you end up throwing it away (thank goodness for clingfilm), together with any clues toward the use-by date of the aforementioned coleslaw. The experience is a specific problem with ‘wet’ products like coleslaw but it has made me wonder about other products and the way the use-by dates are presented.
Here is another example. Can anyone tell me what the use-by date on this label actually means?
For those unable to read the label it says “Best Before End L8210(D)1”.
Well, that’s crystal clear. I thought perhaps it means 8th of Feb 2010 but I have another wrapper with the code L8095DE1 and before you ask I haven’t owned this product since 1995!
So we have one example where the packaging is the problem and the other that simply defies explanation. To me the coleslaw example is a problem with context of use. The same ‘print on cellophane’ technique is used for labelling the best before date on Tesco bacon. It isn’t a problem here because the cellophane is slightly thicker and in any case, if it falls in to the bacon it doesn’t make a mess. Thin strands of cellophane dipping in coleslaw is a problem.
These are not problems that are going to take either Cadbury’s or Tesco’s to the wall in the immediate future but I wonder how much administrative overhead has gone in to dealing with complaints and providing free replacement product? There could even be direct losses from people who switch product (Twirl) or stop buying altogether (Coleslaw).
Clearly there has been no customer research in either case and probably because there was no business case or compelling reasion to do so. But as a colleague recently told me: “when the going gets tough, the tough get measuring” and identifying avoidable costs in a business and then applying solutions is what next year will be all about.
I look forward to the return of the hard plastic lid on my coleslaw and to eating my Twirl safe in the knowledge that it has not gone off. However, I am not sure when this will be.
This was just one of the many statistics provided to call centre operatives by Tim Bishop, Head of Strategy for programme and awards sponsor Siemens at last nights gala dinner and awards ceremony for the ‘Top 50 Call Centres‘. The evening celebrated customer service excellence and the atmosphere from the outset was palpable. The screen behind the stage rotated the logos of the top 50 companies, and there was a cheer from each group every time their logo appeared. The auditory Mexican wave was something to behold and went on throughout the dinner until the awards ceremony proper began. After an hour or so of continued, and increasingly enthusiastic cheering, I began to realise how little positive recognition the call centre operatives receive and also how competitive they are.
Eamonn Holmes hosted the evening and presented the awards and was an excellent speaker. He particularly enjoyed congratulating the team of nine very attractive ladies and one ‘fella’ from Holiday Extras who won the best overall in the Entertainment, Leisure and Travel category. He even took the trouble to visit their table after the awards had ended and congratulate them personally. What a martyr!
The awards are the brain child of Claudia Hathway, Editor of CCF magazine who opened the event with a rousing speech about how call centre operatives were unrecognised for the good work they do. She set a challenge for all companies to achieve an average of 95% satisfaction next year, which looks like a tough target if you ignore how competitive these people are. The data was pulled together by mystery shopping partner GFK NOP who carried out the biggest ever survey of its kind gathering real customer experience data based on real consumer feedback. And the competition was very close with only 1 1/2% separating the top 5 call centres.
So finally, here are the winners:
1st was First Direct, who were also 1st in the Financial Services category. They achieved an overall satisfaction score of 91.73%.
Denplan were narrowly beaten into second place with 91.32%
3rd was F&C Investments with 91.26%
4th overall was Lloyds TSB Insurance with 91.02%
5th and also best in the retail category was Laithwaites with 90.36%
6th Prudential with 89.33%
7th with 89.29% Charles Tyrwhitt
8th ING Direct with 87.89%
9th was Specsavers with 87.57%
10th and also winners in the public sector category were Cambridgeshire County Council with a customer service rating of 87.13%
Holiday Extras won the best in Entertainment/Leisure and Travel category with a rating of 85%
Given our recent study in to the travel sector the low overall score and lowest category score is of no surprise and clearly, for all the celebrating last night, this sector has a lot to do.
I was lucky enough to be invited to the Travolution Question Time which was held on 23rd September at the Soho Hotel. The evening was very interesting, particularly with the timing following the collapse of XL and the Channel Tunnel fire and the economic outlook loomed large over most of the discussion. Indeed, nearly every question had an economic undertone.
The panel consisted of various luminaries from the travel sector and included Justin Cooke, CEO of Fortune Cookie, the event sponsors, or as question master and Travolution Editor Kevin May introduced him quoting Management Today “the internet in human form”. The rest of the panel was formed of Mark Tanzer, chief executive, Abta, Paul Evans, chief executive, Lowcostbeds Group, Matt Cheevers, managing director, Teletext Holidays and Chris Loughlin, managing director Europe, Travelzoo.
There was a great deal of discussion about how the worsening economy would impact the travel sector and most of the panelist offered views consistent with industry research. This shows that holidays are the last area of expenditure that consumers cut back on in a slow down or recession. However stats offered by Matt Cheevers showed that searches for cheap holidays are down year on year. Last year there was a drop in September of -6% for cheap holiday searches whereas this year the drop is -26%.
One of the many interesting points made concerned the positive impact of a recession. One panellist told of the 2001 slowdown and how it had removed the silos in the industry. Our recent research indicated that silos are a real problem in delivering a decent customer experience. With multi-channel user experience becoming increasingly important this could be a real benefit to organisations and in particular to consumers.
Finally, one of the panelists mentioned a website where disgruntled passengers and employees of United Airlines were venting their frustration. The website is called ‘Untied‘ and was created following an incident in 1996. It is well worth a look and demonstrates how delivering a bad customer experience can come back and bite you.