Nick Martindale 5 Dec 2017 01:10pm

At whose service?

Giving customers a good experience should be at the heart of any business. So why are some of the world’s biggest organisations so bad at it? Nick Martindale investigates

Caption: Photography: Getty Images 2017
The debacle surrounding Ryanair’s cancelled flights on account of failing to plan its pilots’ working hours effectively is just the latest in a long list of sorry tales surrounding some of the world’s biggest companies. Aviation as a sector is a repeat offender, but it is far from the only culprit.

There are many reasons why things may not always go according to plan, but how businesses react to these is ultimately what they are judged on from a customer service perspective. Tim Knight, managing director of customer experience firm KPMG Nunwood, which conducts research into how well or otherwise organisations from around the world handle this, says that while it is not always the case that large organisations fail to deliver adequate levels of service, there are reasons why such businesses can struggle.

“It tends to be due to a combination of geographic spread – the larger the organisation the more geographically diffuse it is and the less control you have centrally over how customer service is delivered – and the extent to which that organisation has grown organically rather than through a series of mergers and acquisitions,” he says. “The world leaders in customer service have tended to grow organically because it’s easier to put in place compatible systems or ways of thinking around the customer if it has grown from a common set of values.”

Often the failure comes down to the lack of a culture which is genuinely built around customers, rather than just paying lip service to the concept, says Professor Moira Clark, director of the Henley Centre for Customer Management at Henley Business School.

“The key is organisational climate, which is the practices, procedures and rewards in the organisation, which the employees perceive,” she says. “If the head of an organisation says they’re passionate about customer service but managers ignore customers then staff will realise they’re not practising what they preach.”

She gives the example of staff working in call centres being rewarded on how many calls they get through in a certain period of time. “That instantly impacts on customer service because they’re trying to get through the calls quickly, and the message you send to staff is that what matters is speed and efficiency,” she says. “What really matters should be that you have dealt with the customer properly so they don’t have to phone back again.” This is the concept adopted by First Direct, she adds, which has pledged to customers that the agent they speak to will take ownership of any issue themselves and not pass it off to someone else.

Welcoming complaints

Helen Dewdney is founder of the Complaining Cow website and author of How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results! She believes good customer service stems from the very top of an organisation, and should filter down to those who have contact with customers.

“No one expects a CEO to spend time investigating and responding personally to a complaint, but they should be developing a culture of welcoming complaints to improve service and ensure that staff are trained in dealing with complaints,” she says. “Every company makes mistakes; it is how those mistakes are handled that is important.”

Putting in this kind of culture paid dividends for video collaboration firm Lifesize, which appointed Amy Downs as chief customer success and happiness officer as part of a deliberate strategy to better engage with customers back in 2014. “The CEO wanted me to transform the culture of the company to be customer-obsessed,” she says. “We had to transform the way people thought about customers, and help them realise that it’s our customers that pay us and our job is to serve them.”

Customer experience

Crucially, this extended far beyond the customer service team to include engineering, product development and service teams. “In many companies, departments don’t get along or feel something is their area and don’t want anyone else to touch it,” she says. “That’s often where the customer experience breaks down because you’re then designing processes and systems which do not look at the experience the customer would have. That’s why that customer-centricity has to be a CEO-driven initiative rather than sitting in any particular function.”

A combination of changing the culture and focusing on issues that had already been highlighted through customer feedback has seen the business acquire more than 5,000 new customers and significantly improve the retention of existing customers, she adds.

In some sectors, there can be a tendency for organisations to hide behind legalities, falling back on procedures rather than admitting they got something wrong and attempting to fix it. “With organisations that are heavily regulated or subject to certain forms of legislation around data control, particularly GDPR in the UK and EU, they get into a position where the need to manage that can be over-emphasised,” says Knight. “There is a tension between the needs of the regulator, the requirements of the customer, and the culture of the organisation. The best organisations become very adept at walking that tightrope.”

Often an over-emphasis on policies and procedures can restrain customer-facing staff from taking action they know would improve service. “Changing this top-heavy approach is not merely challenging to business leaders – it is terrifying,” says Robin Gadsby, founder and CEO of creative communications company Forever Beta. “Today’s business leaders need to throw out the rule book and allow employees the space to think on their feet; team members need the power and flexibility to respond to individual customer needs.”

“Our research shows customers are willing to pay more for better service, and ‘human touch’ factors such as a friendly conversation and honest advice can increase spend by 42%”

Yet while organisations have much room for improvement, there is also an argument that customers should expect a standard of service in line with the price they have paid and the ethos of the brand. “If you pay a premium it is reasonable to expect a good service,” says Knight. “Equally if you don’t pay a premium it’s reasonable to expect an appropriate level of service. Where this becomes difficult for the consumer is where they believe they’re buying into a premium proposition and don’t receive the service associated with that.”

Human touch

Technology such as chatbots or automated call centres can play a role here, helping organisations handle certain types of enquiry and freeing human operators to focus on more complicated issues. “Businesses need to provide customers with choice by offering an omnichannel experience where customers may start their journey speaking to a chatbot, but can have that query escalated to a human where needed,” says Shashi Nirale, senior vice president and general manager EMEA at Servion. “In the future, these systems are also likely to detect and react to emotion so this escalation process will be seamless, and companies will have specialist hubs where call handlers will be trained to deal with more complex queries.”

But Mike Petrook, director of policy at The Institute of Customer Service, believes companies need to tread carefully with the use of automation. “Our research shows customers are willing to pay more for better service, and human touch factors such as a friendly conversation and honest advice can increase spend by 42%,” he says. “Although increased automation can meet customer expectations for speed and efficiency, the impact on the bottom line of an empathetic, personal approach cannot be ignored.”

Benedetta Crisafulli, lecturer in marketing at Cranfield School of Management, questions whether the idea that consumers require a quick response – as facilitated by technology – is correct. “I have done research which goes against this whole idea of getting instant responses,” she says. “Sometimes less timely responses are accepted by customers on the basis that they are necessary and can lead to a satisfactory resolution. We will accept a delay, as long as other aspects such as interpersonal interaction or more tangible resources such as an apology or compensation are rendered.”

There are examples of countries, sectors and organisations that handle customer service well. KPMG Nunwood’s research identifies six traits shared by businesses offering a great customer service experience, including setting appropriate expectations for customers, staff having the freedom to respond to any issues that need addressing, and empathising with how customers are feeling. “One of the key headlines from our Customer Experience Excellence Centre research is that if we in the UK want to learn more about how excellent service experiences occur consistently and at volume, then we should look at the US,” he says.

Customer service is the brand

Organisations there tend to have a stronger customer-focused culture, he says, and also realise there is a close link between customer service and the brand itself. “We no longer live in a world where you can have a group of people responsible for service delivery in one function and another function that is responsible for marketing, communications and branding,” he says. “The world’s best organisations are restructuring to bring those functions together, so they fundamentally recognise
that in a socially enabled, always-on, mobile world, customer service is branding.”

Clark, meanwhile, points to companies such as John Lewis, Metro Bank, Amazon, Apple and US-based online shoe retailer Zappos as examples of best practice. “The lesson we can learn is that all those organisations treat their staff really well,” she says. “The more you do that, the more it impacts on the customer. It doesn’t have to be face-to-face; with Zappos or Amazon you order online but if you have an issue the people behind the scenes still need to be doing things properly. You need this match between culture and climate, customer satisfaction and the performance of the firm.” This contrasts with sectors such as telecommunications, utilities and aviation, she adds, where organisations have engaged in a race to the bottom in terms of price and customer service, and failed to invest in appropriate technology.

The business case alone – in terms of winning new customers and retaining existing ones – should be enough to force firms to ensure they deliver consistently high levels of customer service, making it all the more baffling why some are seemingly unable to do so. The UK Customer Satisfaction Index, published by The Institute of Customer Service, makes a clear link between a brand’s reputation and business performance. “Analysis of 42 major retailers over the past five years finds that in 60% of cases when customer satisfaction increases or decreases, share price follows suit,” says Petrook. “Our findings paint a clear picture for big UK companies: place the customer at the centre of business strategy, or risk losing out to those who do.”

Time to reflect

Poor customer service is just one factor that can adversely affect how consumers view particular businesses or sectors, something that contributes to a wider mistrust over how business operates.

Over the last year, ICAEW has developed a campaign that aims to rebuild trust. Known as Connect and Reflect, it seeks to generate discussion around the big issues facing business, and foster new norms of behaviour in order to overcome these.

ICAEW has already outlined the vision behind the initiative in an explanatory white paper, and intends to publish pieces on a range of issues. These include whistleblowing, employee directors, excessive pay, how to mark corporate governance, and the effective use of social media.

“We’ve gone for quite challenging topics and we hope to help companies navigate their way through these difficult areas,” says Elizabeth Richards, head of corporate governance, technical strategy department at ICAEW.

The initiative fits in with the FRC’s wider review of the UK Corporate Governance Code, she adds, but will seek to provide more practical assistance. “The subject matter and the underlying dilemmas are not new,” adds Richards. “They’re the problems that won’t go away. The ultimate aim is to see improved public trust in business.”

ICAEW members can voice their opinions and share best practice at the new Talk Accountancy section on the ICAEW Communities platform. Visit ion.icaew.com/talkaccountancy