Customer Innovation

NickB

AI: are you being duped by Google’s Duplex?

Getting a realistic view on the rise of the machines means being aware of the hype cycle

Film buffs will know that this year marks the 50th anniversary of Stanley Kubrick’s 2001: A Space Odyssey – a film that consistently ranks in my personal top 10 favourites. Its plot included that great sci-fi trope, the Malign Artificial Intelligence (AI), in the shape of HAL, the on-board computer who attempts to kill the two astronauts and then take over the Jupiter mission that forms the main portion of the film.

Well, the year 2001 has come and gone and the only Jupiter missions we’re making are unmanned so, once again, the rate of technology development and innovation relative to its fictional counterparts has let us down. The tech-prediction industry is subject to massive distortion and hugely unreliable: whether it’s in fiction or building on current innovation it’s an act of imagination after all.

So how much weight should we give to the current hype around AI?

Duped

Google demonstrated a pretty impressive new piece of tech the other week. Dubbed Google Duplex this piece of Benign AI can do some things that a PA might do like book hair appointments or get you a table to meet clients, even book a conference room. On first view, the tech is impressive. The software has the ability to imitate a human’s natural foibles in speech – even the umms and ahs. It is impressive in that it appears so natural. That said, the range of functions it can perform is still pretty limited and to be honest, the amount of time saved is not going to be huge – who finds booking a hair appointment a problem? And it also raises ethical issues about whether you disclose that it’s a machine who’s talking to you.

I’m not going to second-guess Google’s future plans, but Duplex, as impressive as it sounds in demonstration is not particularly revolutionary, at least not in the outcome it creates. It’s not a “game changer”. At least not yet.

My question is “does this advance in technology create any new opportunities for improving things for my customers?”

Answering this question involves steering a way between hype and thinking creatively about the possible outcomes. I can see the cost-saving implications over time as this sort of technology becomes more available, cheaper and smarter, but consistently great customer experience is a challenge even for highly talented human beings so can a machine seriously contribute?

Robot wars

It’s not too much of a stretch of the imagination to picture a situation where Google’s Duplex assistant can be the recipient of calls. Indeed, it’s easy for the sensationalist journalist to produce headlines such as “Rise of robots threatens to terminate the UK call-centre workforce” – as was recently reported in the Guardian.

The cost-saving potential alone shows it’s a threat to existing ways of managing customer queries. But customers are notoriously fickle. Some will have no issue with an all-knowing virtual call centre assistant without the almost obligatory wait whilst others will be less impressed with the lack of genuine human interaction. Does automated response increase customer experience or reduce it?

For quite a long time, anything other than a simple interaction will require hand-off to a trained human service representative. People who are not clear communicators may find the experience frustrating even though technology’s ability to understand a wide variety of communication styles is improving.

Whilst it’s not a dramatic rise-of-the-machines Terminator-style threat just yet, but that doesn’t mean you shouldn’t plan for it.

Keep thinking

And by plan, I mean imaginative, creative planning that continually tracks and assesses customer outcomes in the context of what developments are underway. In meetings last week with potential contributors to The Next Ten Years – with a deep interest in AI-driven innovation – we examined possibilities created in different markets.

In banking, it’s easy to picture an extension to services like Monzo’s which allows customers to keep tabs on spending across various categories with automated proactive review on past spending patterns, income etc to provide a more holistic view of your finances and spending possibilities. I can imagine the app being extended from money management into lifestyle management (which from a consumer customer perspective is the business banking should be in) tut-tutting at you if you buy an extra round of drinks and immobilising the car if you don’t blow into a tube before attempting to drive home etc etc. It might also tell you the planned holiday in the sun is going to be 2% more expensive now because it’s linked your planned spending patterns to alternative providers giving you a stream of alternative options whilst you make your decision.

The individual apps to accomplish most of these things are mostly available now, but the potential sifting through of alternatives that can be done automatically without human intervention is the next development that will help identify critical information in relation to your needs.

The possibilities are endless but the distortion , false information and misaligned results  are not only ever present but increasing difficult to manage as the information world continues to explode with endless alternatives.

Think outcomes

Even in my made-up example I’ve moved from the customer outcome that Monzo current delivers which could be phrased as “keep tabs on my spending” to “help me stay on track financially, now and in future” or “help me manage my lifestyle”.

The deep understanding and alignment to customer outcomes is where the opportunity lies. Sure, advances in robotics will change the nature of the call centre in the next few years (very likely within three to five) but viewing these as cost and efficiency improvements with a same or slightly improved experience is to miss the wider opportunity.

A view on Customer Success i.e. the delivery of desired outcomes and enhanced experiences will be absolutely critical to maximising the impact of any new technology. Starting with the customer, looking beyond the immediate hype and taking a realistic view of technology progress will help – as futurist Roy Amara put it:

“We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.”

Or as Michael Hammer observed:

 “We need to prepare for a world that cannot be predicted.”

Actually, the nearest we can come to prediction is the needs, wants and preferences of our customers. We need to place considerably greater focus on that to help harness the sheer potential that AI offers.

Keeping focused on customer outcomes will keep you focused on the long run. It’s possibly the only predictor that you can rely on!

NickB

Net Promoter Score – what’s the point?

It all depends on the context

An unwanted set of medical visits last week resulted in an equally unwanted set of follow-up texts.

My local hospital trust “would like me to think about your recent experience in the Emergency Department. How likely are you to recommend us to your friends and family if they needed similar care or treatment? Reply 1 for Extremely likely, 2 for Likely, 3 for Neither likely nor unlikely, 4 for Extremely unlikely or 6 for Don’t know. Please reply today, your feedback is anonymous and important to us and helps us to improve our service…”

There was no follow up question in their survey – clearly they were just wanting a number.

My GP’s surgery then did exactly the same.

Yes, the much-touted and widely-discussed Net Promoter Score (NPS) was at work again!

Well, actually the experience and the care in both cases were great but I didn’t reply, but because the context of the experience means that I think NPS has no significance in isolation. If I had responded with 8 but with no opportunity for follow-on comment how can they react? If the hospital looks at their scores how can they do anything meaningful unless they have some view of what aspect of my experience is not great in the my opinion.

No choice

It got me thinking what do people use NPS for? Picture the scene if you can: someone close to you is suddenly taken ill. The LAST thing you are going to do is say “Hmm, let’s take you to XYZ Hospital, they have a really great patient experience and I’d heartily recommend it!”

If you lived in my neck of the woods you would only have one choice in an emergency, assuming it didn’t require an ambulance: the nearest hospital. And that’s in London – an area not short of “competitor” hospitals; elsewhere you most likely wouldn’t have a choice.

Similarly, signing up for a GP is not like having a bank account or a phone service: you tend to sign up long-term and don’t like to switch unless you move house. You might recommend individual doctors within a practice to your nearest and dearest depending on your experience but that’s not the question.

I asked a GP friend of mine who’d moved from my surgery to another practice whether they were using a similar measure. “Oh yes” she said, “we do the scoring as specified and then we have to send the results to the Department of Health.” As far as I can tell there is no follow-up or any expectation to do anything differently. The score was being used little more than a traffic light to gauge the surgery was performing above a minimum threshold.

So, what’s the point of NPS?

Despite its misapplication in parts of the National Health Service, the measure is partially useful, but it does not deliver quite the impact it claims:

  • If I have a great experience from supplier A where various competitors are readily available, I’ll form an emotional attachment to the supplier that provided it. I might quite like Supplier A but part of the attachment is based on confidence they can do the job and trust that this will happen consistently.
  • I’ll be more much likely to tell someone that I recommend supplier A and much of the time I will give them a 9 or 10. In this scenario NPS accuracy is working.
  • I might be using NPS after a visit to a retailer. If I got what I wanted, and the assistant had smiled at me nicely then I would be more than happy to give a nice round 10. Then I would most likely forget I had ever been there and I never raise it in conversation again. The scoring system is not working so well.

Because it’s focused on measuring my reaction to specific events NPS is not a complete picture. The experience I have had needs to be part of a journey towards a particular outcome. To use my recent healthcare example, that journey won’t be complete until I have had a follow-up appointment and further treatment, if needed, a process involving referral and booking into the appropriate clinic. My satisfaction (not likelihood to recommend) won’t be determined until my desired outcome – good health, reassurance about future health concerns – is achieved.

And it still won’t involve me recommending any form of medical treatment, no matter how great the experience is.

Building on success

At NextTen we find it’s much more helpful to talk about customer success which we define as a combination of fulfilling the customer’s desired outcome and providing a good experience. Using these two dimensions we can build a customer advocacy matrix. High advocacy companies combine a great customer experience with a great outcome delivery, although it’s possible to achieve business success with an OK or even below-average experience as long as you deliver the customers’ desired outcomes as low-cost airlines continue to prove.

  • Ryanair and Spirit: poor customer experience but great profitability.
  • Kingfisher Airlines: great experience but went bust!

Context is everything

NPS can certainly tell you if you’re in the high advocacy quadrant of the matrix, but you’ll need additional qualitative data to understand why you’re there, or if you’re not, where you need to improve. And if your market context isn’t one where high levels of customer choice or switching occur then you would be better off measuring something meaningful like the number of and reasons for customer complaints.

NickB

Why the Sainsbury’s/Asda merger is short-termist and simply dumb

The old retail model is dying – consolidation merely postpones the inevitable

The news that UK supermarket Sainsbury’s and Walmart subsidiary Asda plan to merge may have been judged a great move by many analysts but it’s not. It’s short-termist. It panders mainly to the immediate shareholder value issues and, as so often happens, the customer – who holds the key to long term value and success – is insufficiently considered.

Sainsbury’s Chairman, David Tyler, has claimed this consolidation as the most “historic and pivotal move” they can make. History will judge this a short-sighted manoeuvre based on preserving a predominantly bricks-and-mortar player in an industry that’s dying on its feet – unless it changes significantly.

Vote with your clicks

If you’re a customer in a town where your supermarket options are Asda or Sainsbury’s ability get exactly what you want with minimised household spend (part of their model) will be limited. In addition, the time, effort, inconvenience and – in my case – sheer boredom involved will encourage me to search for other options. If you’re a customer in cyberspace you have more shopping options than you know what to do with. Its arguable that having 20 choices of grade, size, price and expiration date of a cherry tomato might add layers of complication and the illusion of control.

It might be simplistic to say that online will replace “offline” – the current low penetration of Amazon Fresh suggests that it will take time – because some elements of shopping remain resistant to online. This of course will surely change and as it does rapidly accelerate. Do you honestly see the bricks-and-mortar model being the same in 2025 as it is now? People who extrapolate based on prior behaviour might argue differently on the basis that the experience is not much different from 2011 but extrapolation arguments in a world of customer innovation opportunity are often TOTALLY wrong!

Yes, we’ve had online shopping for a decade or so and we still have plenty of physical spaces to go and buy stuff in so why panic? The trend extrapolators might have a point? Reality check: we’re already seeing the death of many high street retailers as they lose out to online operations so although the death of the high street has been a long time coming, it looks like it’s not only here but accelerating. The high street actually has a big part to play but not in its current guise. This is where customer success, experience and exposure to innovation plays a critical role.

Focusing on what I term customer success which consists of customer outcomes and related experiences (outcome and experience are different things) gets us away from this sterile “bricks v clicks” debate and opens up innovative new areas for growth.

My personal outcome for food shopping is to have my chosen fresh foodstuffs, delivered not only to my house but placed exactly where I want them in my kitchen. I don’t want to have to repeat my eggs, milk and bread order every time, but I do want the option to adapt it if I expect visitors. I don’t want to worry about being in the house when there is delivery, but I also want to ensure my property remains secure.

As a Customer Success expert, I know that there are many people who would want exactly the same, but I also know that there are a large number of variants – because we have levels of uniqueness which we expect to be actively considered. I am also aware that the distribution model for this type of shopping whilst lower cost than traditional bricks and mortar is still more expensive than say “click and collect”. For a few pounds reduction I might opt for a model which places my shopping in the boot of my car at a click and collect location such as a local petrol station.

Brick it

Does this mean the current bricks and mortar is redundant? Time will tell but I think that it does not have to be the case.

If I now live in a heady world where I don’t need to walk up and down an aisle why would I go to the “bricks and mortar” and spend?

What experiences around food would make you get of the house? Certainly, interacting with people and companies online will make many crave getting away from a screen – so what sort of experiences would make you move? Maybe it would be to experience something specific. Maybe it would be to learn something. Maybe it would be to better understand new ideas around nutrition. Maybe it would be meet your friends and do something. I certainly would not meet my friends to do a weekly shop, but I might go if a celebrity chef was doing a workshop which you could join in. Is that workable? Not sure, but I do know that a commodity process such as basic shopping will not be the domain of the high street but companies that offer the customer something different most certainly will.

You can start to think differently about the outcome and ask questions like:

  • How does the arrival of more intelligent devices change the ability to predict my demand for specific goods on specific days?
  • Could we use my social network to pick up shopping for me and automatically recompense them? (note that this could be of real benefit to people with mobility constraints)
  • What other delivery mechanisms might work? How can the principal online provider integrate with other local providers to optimise deliveries?

This is only a starter list – if I took a walk to the shops I might even think up some more…

Customer-centric strategy?

As Charles Bennett noted recently, building customer-centric companies is difficult, usually because customer-centric change must have a business case that stands up to scrutiny alongside other more concrete initiatives. When you get to the level of big strategic moves with tangible benefits (in Sainsbury’s case, assuming 73 stores can be offloaded, and other economies of scale realised) you realise just how far strategic thinking has to go to put the customer genuinely at the centre.

I’m hoping that somewhere in Sainsbury’s there’s a someone taking a creative view of what the future of retail might look like from a customer perspective and how the company might respond to it, but I’m not convinced. I think it’s more likely that the company will lurch, albeit elegantly, from one defensive manoeuvre to another – we’ve fended off the lower cost supermarkets (Aldi/Lidl) and we’re staying ahead of Amazon (for now, by removing one UK acquisition target from the game) – keeping analysts happy and, in the case of one senior executive, apparently staying “in the money”.

But it’s not the best outcome for customers and, ultimately, not the best one for the company.

NickB

Focus: a recipe for customer success

Sometimes you just need to stick to one thing and do it really well

Back in January I had a celebratory meal that illustrated the good and bad aspects of complaint management and so it was with some trepidation that we embarked on another celebration recently – but this time at a different restaurant. Fortunately the experience could not have been more different, and the key to success this time was the restaurant’s single-minded focus.

Le Relais de Venise is a small, international chain of restaurants that offers you a choice of one thing: steak-frites. And it’s great.

To be specific, there is some choice: you can have your steak (only one type of cut) cooked in one of four ways – well done, medium, rare or bleu (no sitting on the fence with medium-rare) and there’s a good range of wines and a choice of desserts, mostly variations on the combination of ice-cream, cream, cake and chocolate.

But if you’re averse to red meat for any reason then the message is clear: this place is not for you.

I’m happy to say that for this unrepentant carnivore, the proposition is bang on the money, so let’s unpack it and find out why it works.

Firstly, and most importantly, did it deliver my desired outcome which was a great evening out to celebrate my wife’s birthday? It did, because all the elements were in place:

  • A great product – beautifully cooked, tender steak with plentiful French fries and, oh joy! actual “secret sauce”, which we spent a few minutes trying to figure out the ingredients of (probably cream, anchovies, parmesan – who cares? It was excellent).
  • Friendly service – despite the stern “no medium-rare” warning – and even though we were in the Soho branch on a busy Friday evening, it was relaxed and unhurried.
  • Reasonable prices – portion sizes (you get your steak in two servings, so it doesn’t get cold) are generous so it feels like value for money.

Core competence

Of course, if you can do one thing really well, it’s tempting to think you could expand your product line to include non-red meat options and thereby capturing more potential customers. But actually, why bother? In the case of Le Relais they would lose their distinctiveness if they expanded beyond their core competence of steak frites even though I am sure their chefs could knock up a pretty good sole meuniere or Poulet frites if asked.

I don’t know if, in these vegan-friendly, clean-eating times the market for a narrow slice of classic French cooking is big enough to sustain or even grow their operation – in the UK at least times are tough for the restaurant trade, but I hope so, since I am keen to return in future.

Focus and grow

But having a narrow focus doesn’t mean you have to stay where you are. Remember that Amazon started out as an online book retailer but soon built on their underlying core competence in distribution to offer almost anything, with a wide variety of delivery options.

Finding out what you should focus on and making sure you deliver it brilliantly is a fundamental business challenge. I believe having a clear idea of what customer success looks like – a combination of customer outcomes and customer experience – is fundamental. The rest is down to execution – as our regular contributor Gordon Tredgold often puts it: “the right job, done well”.

Or, putting it another way: what’s your equivalent of steak-frites?

NickB

How much do you really understand your customers’ needs?

When it comes to customers with any form of impairment the answer is most likely not enough

As my previous articles on accessibility have shown, the experience for a customer who doesn’t fit the “norm” of being a walking, intelligent person in possession of all five senses is typically a lot worse than it is for those who do. A conversation the other day made me realise that businesses don’t make sufficient effort to understand the needs of all their customers and therefore there is a significant business opportunity for those who do.

Say again?

The World Health Organisation (WHO) estimates that around 466 million people worldwide have disabling hearing loss and that by 2050 over 900 million people will have disabling hearing loss – one in ten of the world’s population. That’s a cause for concern, particularly as much of it is preventable but, whatever the cause, it doesn’t take away the fact that this is going to be an increasing challenge for up to 10% of any business’s customers.

I was pleased to discover that one specialist company – SigncodeUK – has developed a simple-to-use product that has the potential to make life easier for the profoundly deaf. With Signcode, messages can be conveyed via video: all the customer has to do is scan a QR code showing the SigncodeUK logo and a video appears on the customer’s phone with the message relayed in British Sign Language (BSL).

Courtesy of SigncodeUK

Now you may be thinking “that’s all well and good, but surely most people can read the information anyway?” – good question but missing the point. For people who are profoundly deaf, BSL is their first language – not surprising if you think about how a young deaf child will learn to communicate (they won’t learn to read English first).

When Signcode’s Jeff Earl told me this I was surprised – but then I had a flashback to a scene from years back where I noticed two teenage girls on the street laughing like mad with each other but not saying anything. I then noticed they were rapidly signing to each other, and I remember thinking that it of course was obvious that that’s how deaf people would tell each other jokes – it was something that I’d never had to think about.

You may now be thinking “that’s never occurred to me either, but how many people do you think this affects?” The answer is that, in the UK around 50,000 people have BSL as their first language – less than 0.1% of population, although about the same number who speak Gaelic and not much less than the c130,000 who speak Welsh as a first language at home. In fact, as Jeff Earl points out, the number of deaf people may be under-recorded  as health organisations (hospitals, GPs and Adult Services etc) did not have to register deaf people unless they ticked the disabled box. This has led to the numbers looking on the low side as the majority of deaf people (culturally and linguistically deaf ) do not consider themselves disabled.

A tiny percentage of anyone’s customer base then. So why bother?

Health warning: the following section may be offensive to statisticians

Whether we succeeded at mastering maths at school or still remain baffled by the simplest equation, we are bombarded with statistics every day, typically to tell us things like, flying is incredibly safe or that you are more likely to die from a collapsing sandcastle than a shark attack.

We’re conditioned to accept the idea of “the norm”, the middle of the Bell Curve (“normal distribution” for the statisticians amongst us) and I think this permeates our idea of customer service and customer experience where we tend to design around an idealised view of the customer – how we would like them to be rather than how they actually are.

Now, I’m not arguing that anyone’s customer base doesn’t have a normal or typical customer – it makes sense to design your products and services around what most people would do – but I’m more interested in what you do for those in the margins, as that’s where competitive advantage lies.

The bell curve below shows, conveniently, that 0.1% of your customer population lies 3 standard deviations from the norm so in a customer population measured for hearing ability, that’s where you would find your BSL first language population. So why cater for such a small sample?

Source: Chris53516 at English Wikipedia [Public domain], via Wikimedia Commons
The answer is that what you do for a small percentage has a knock-on effect on the whole customer population because it shows the 99.9% of your customers that don’t use BSL that you want to be inclusive, that you’re taking pains to customise your offering to those customers who do.

Extra miles (or inches)

I don’t much care for the expression “going the extra mile” in relation to customer service – sometimes an extra inch or two may be enough – but providing inclusive services will distinguish your business from the competition.

The good news is that there’s plenty of opportunity to do this and cater for people who lie closer to the centre of the bell curve – the 2% of the population with some form of dementia for example.

In my experience of implementing strategies to improve services for these “vulnerable” customers, the key to success is to embed the level of awareness in the organisation’s culture. You don’t need to dig too deep in any group of people to find individuals who – often with a passion born of personal experience – want to step up and lead the way in spreading awareness and improving services to all customers.

Very often those people aren’t in senior roles but they’re the ones who, day in and day out, make great service happen. Allowing those people to flourish is the hallmark of great customer service leaders.

NickB

OmniServ: customer care in action

Treat customers as humans and operational challenges will reduce

When BBC correspondent Frank Gardner recently publicised his 100-minute wait for his wheelchair to arrive from the hold to the gate at Heathrow Airport he illustrated a fact not often discussed in the mainstream media: travel – of any kind – when your mobility is restricted can be a massive challenge.

I was glad, therefore, to meet with Samantha Berry who is a passionate advocate of better customer experience in general and accessibility solutions in particular. In her day job as the Heathrow-based Head of Innovation and Regulatory Compliance at airport services company OmniServ, she is responsible for ensuring that people like Frank Gardner get the assistance they need to get through an airport which, she describes as potentially disabling given its sheer size and scale.

OmniServ provides a number of services to airports throughout the UK, including PRM (Persons with Restricted Mobility) assistance which, in essence, means ensuring that anyone who needs additional support to get from one part of the airport to another gets the assistance they need. Airports have a legal obligation to provide this service – some do it in-house and others outsource to OmniServ or one of the other three main providers in the UK marketplace. It’s a pressurised environment: airlines run on a tight schedule and turnaround time is critical so any hold-up in a departure, arrival or flight transfer for a passenger who is slow to board, disembark or connect can have negative consequences for on-time performance.

But behind the sterile acronym and the tight schedules lies a great experience for the customer, according to Samantha, OmniServ’s staff will potentially be spending more 1:1 time with the customer than the airline staff do. Getting the right kind of person in the job is critical and the old adage “recruit for attitude, train for skill” very much applies. Samantha sees the job as a vocation:

“I don’t use the term lightly – we have people whose purpose is to make their passengers journey as smooth as possible. We provide training – accredited by Disability Rights UK – which has moved away from talking about the process to focusing on caring as you assist the passenger, so behaviours are important. A large element of training covers the importance of listening to the customer. For example, sometimes it’s obvious that a customer will need a wheelchair, but only the customer is able to explain how they want to be lifted into the seat.

There’s much about the job that motivates people – “The airport is an exciting environment to be in and no day is the same. Everyone’s very operationally focused and they are driven by delivering a good on-time performance. No-one likes to be faced with a delay, but they like the challenge of a time constraint. Also, your job has a lot of time when you’re talking to the customer and building a relationship.”

End-to-end

As I found out in my recent experience with picking up my in-laws from a rail station, getting the various elements of the journey to link up is a constant challenge (in my case the seamless planning fell apart when the train arrived at a different platform from the one the mobility assistance service was expecting, leaving two people stranded for 20 minutes). Although serious complaints are rare, the loading and unloading of mobility equipment is outside of OmniServ’s control. Sam recalled an incident where she watched helplessly as an electric chair for a customer with motor neurone disease fell to the ramp. Such incidents, again, thankfully rare, can severely affect a passenger’s quality of life – in this case the passenger was bed-ridden for two weeks while the electric chair was repaired.

Balancing airlines’ demands for efficiency versus the cost of assisting less mobile customers is something Samantha sets about with a passion. She recalled a discussion with the head of planning for one airline where she pointed out that flights from some destinations – Malaga for example – would have a much higher proportion of PRM passengers than other more business-focused destinations such as Frankfurt and therefore scheduling should allow for the additional turnaround time required. Eventually the planner changed the schedule to reduce the pressure.

She spends a lot of time talking to the various groups across Heathrow and works with the OmniServ Disability Advocate who provides additional insight into customer needs and how issues can be resolved.

Although the tension between cost and service provision will never go away, Samantha made the point that if you get it right for the customer the challenge will solve itself as more people will choose to use an airport/airline who get accessibility right.

With the number of passengers requiring assistance is growing at a rate of 7% as opposed to 5% for those who don’t, it’s a demand that’s only going to increase.

Innovation

OmniServ is constantly seeking opportunities to improve the experience through new technology. In celebration of International Wheelchair in March they showcased the WHILL, a high-tech solution which has been dubbed “the world’s most futuristic-looking wheelchair“. Designed by a start-up company created by a team of engineers from Japanese companies Sony, Toyota, Olympus and Panasonic and when used in conjunction with beacon technology, mobile devices and other systems, these can be controlled using smartphones, can travel in convoy through an airport and, eventually, will be able to be programmed to move themselves to where they are needed, without passengers or attendants.

Reaction from representatives of disability charities and wheelchair users was positive and the device also attracted attention from able-bodied millennials who saw it as a cool way to move through the airport.

Such facilities will give customers increasing independence and have the potential to drive efficiencies, but the human touch is still very important. Samantha’s aim is to have people whose level of intuition is so great that they will be able to understand customers’ needs and simply ask “how can I make your journey better?”

The airline industry is a high-volume business, with considerable competition for the lower end of the market where margins are tight. In such a world it’s theoretically easier if passengers can all be treated as uniform entities conforming to a standard set of behaviours. In Samantha Berry’s world such a “one size fits all” approach is highly inappropriate and, in the long-term, counterproductive. She recognises that the foundation of a great customer experience is to treat customers like the unique human beings that they are and to provide a service accordingly.

 

NickB

Giraffes, razors and jet engines: the re-emergence of the subscriber

There are attractions in the subscription model, but only if it’s genuinely customer-centric

Somewhere along the road from a government department to an FTSE100-floated plc, BT stopped referring to its subscribers and started referring to them as customers. Strangely, the outmoded term is making a comeback as more and more companies try to move their customers onto a subscription model for their products and services.

The problem is, it’s not going to work for everyone.

I got confused by an advert in London’s Evening Standard this week: it features a toy giraffe in a toothbrush and on closer inspection is promoting a new subscription service – Brushbox – for toothbrushes and toothpaste.

That’s right, those commonplace items you can find in any supermarket, corner shop or chemist. I’m struggling to see why anyone would need to sign up for a service that sends you a new toothbrush when you should be changing it. Presumably you’re one of the feckless “70% of us who don’t change our toothbrush when we should”. The advert, which promises “a fun and environmentally friendly way to look after your family’s oral care” reminds us that 1 in 3 children are starting school with signs of tooth decay so it’s basically tooth-shaming you into coughing up for a subscription.

Razor boy

I’m not immune to the charms of a subscription service though: I’ve been having razor blades delivered to my home on a regular basis and that works for me as the product – Harry’s in my case (other subscription services are available) – is superior to others that I’ve used and isn’t available in shops. I don’t think I’m paying a premium for this either – possibly because replacement blades are eye-wateringly expensive whether you buy them in a shop or online.

The model has been well-established in the business sector for many years. When I started out in the computer industry a few decades ago, we would seek maintenance contracts as a way of extending our software project income and also giving the client the ability to have regular upgrades. The other night I was talking to someone about how Rolls-Royce’s jet engine sales include an ongoing maintenance contract – sensor technology enables Rolls Royce to keep tabs on engine condition and notify the aircraft operator of any problems in real time. Preventing a flight taking off with a faulty engine seems like a premium worth paying and in the long term will more than likely have cost benefits for the subscriber in reduced overall down time.

But I’m wondering if in the consumer world we may well have reached “peak subscriber”…

Too many schemes, not enough customers

The subscription model clearly has benefits for customers but, on inspection, has even more attraction for businesses and their investors. Viewing customers as a source of ongoing income is easier to account for than a number of one-off transactions. And advances in technology mean that businesses can use the data gleaned from the customer base to predict demand and tailor offerings accordingly.

However, as an article in The Economist (another of my subscriptions) points out, the downside of the model lies in the high cost to subsidise customer acquisition and likely increasing volatility of the market. As competitors offer better subscription schemes, customers will vote with their feet and, with more businesses finding ways to run subscription schemes the choice will only increase.

Lock-in

The answer to this, at first sight, is to make it difficult for customers to end their subscriptions early. Some gym chains, for example, have been doing this for years, locking customers into annual schemes at a reduced rate. This approach is anything but customer-centric: it’s a defensive manoeuvre that gets the business off the hook of continuing to make their offer more attractive.

And this is the nub of the challenge: those businesses that will succeed with a subscription model are those that commit to continuously improving the value they deliver to customers. Netflix, for example, continues to offer high-quality unique content to its subscriber base and has a low customer churn rate as a result. Spotify, the music streaming service, has a more volatile base as much of its content is available from other sources – YouTube and recorded media – and faces a challenge of proving to enough paying customers that it provides something unique.

Businesses adopting a subscription model need to get their priorities straight: provide a compelling reason to subscribe (hint: customer outcomes are a good way to start) and then work out how that subscriber base gets “monetised”.

I’m still confused by the giraffe though.

NickB

There’s no place like Home(base)

Pretty soon, there may be no Homebase at all

My track record as a DIY-er is not all that great, but I’m thinking I could have done a lot less of a botched job than Australian company Wesfarmers did when they acquired UK DIY retail chain Homebase back in 2016.

The analysts’ views could not have been more damning with GlobalData’s retail analyst, Patrick O’Brien referring to it as “undoubtedly the most disastrous retail acquisition in the UK ever.  I can’t think of a worse one that has made these kinds of losses so quickly.

According to reports in the Guardian, up to 40 UK stores could close with a possibility that the parent company could exit the UK altogether as Wesfarmers recovers from a £454m write-down due to the acquisition.

My use of the term “botched job” is not a management consultant’s know all “post-disaster” arrogance but the term used by Rob Scott, Wesfarmers’ managing director, who stated the problems with Homebase were largely of their own making – a slightly diplomatic way of saying “we just shot ourselves in the foot with a gun we already knew was loaded. The number one – and probably most critical – mistake was to remove the entire management team plus 160 middle managers as soon as the takeover was concluded.

If you want big change, do it fast but beware of the risks

There’s a school of thought that suggests that if you are going to implement big change then do it quickly and do it early. The catch of course is that these have to be sensible changes and if you haven’t assessed the strategic landscape effectively then hitting fast and quick can make the acquirers look like drunken rhinos in an overpacked china shop.

Moving fast was not the mistake. Streamlining is an obvious first move but arguably they went too far. Including the people who effectively ensure at least short term smooth running – the middle managers – in the first tranche shake-up was too great a risk. All the knowledge about what worked in the stores and what did not – gathered over years of trial and error also walked out of the door at the same time.

Don’t change what’s already working

Homebase had already achieved some success attracting more female shoppers with an emphasis on top-end soft furnishings from Laura Ashley and Habitat which created  a differentiator over other brands. Based on the experience of their Bunnings chain in Australia, however, Wesfarmers decided that a different approach was needed and opted for a purer DIY warehouse, providing customers with a no-frills (or chintz) experience.

Judging from customer feedback and our own research the previous approach seemed to be working. And, subjectively, our experience of the post-acquisition Homebase has not been that great – product facing is poor, and it seems harder to find what you want with too many options and price-points in some categories.

The lesson here is don’t change what’s already working and expect feedback from customer segments in one country to be replicated in another without sufficient research. History has shown time and time again that this approach does not work.

Ignore middle managers at your peril

Middle managers get a bad rap: the term suggests a lack of ambition and a degree of mediocrity, so they’re a target for easy downsizing. But middle managers hold a lot of knowledge about what works and what doesn’t and, whilst you can argue that companies would be more effective if they codified and shared that knowledge better, it seems a rather crude piece of change management to cut it out just like that.

Home or away?

Homebase’s problems are challenging – a £1bn rent obligation prevents Wesfarmers from walking away completely. The UK retail market is depressed, and the outlook remains uncertain for the short to medium term. The new Homebase have clearly not listened enough to their customers (or their voices in the company). They might want to think more about what their customers – male and female – want from their outlets before wielding the axe further.

Mistakes may have been made and recovery will be tough, with a degree of downsizing appearing all but inevitable. But in a crowded market, customers will shop around and loyalties can change. Homebase has every chance of recovery if a customer first philosophy is adopted and aligned to every aspect of the organisation. Time will tell whether the new owners have learned from their mistakes.

NickB

Gender pay gap: a blunt instrument is better than no instrument

Obsessing about what’s right obscures the real issue

Measuring the “right” things is talked about in almost every company. Unless we agree with what and how something has been measured we howl “this is too subjective” and then refute some of the core findings. The rush to meet the 4th April deadline for UK companies to report on their gender pay gap is a case in point.

Criticism has come in from many quarters that the measures created an unnecessary burden on employers and failed to measure enough of the right things other than what we already knew – gender pay inequality exists.

If you look a little deeper then there are findings which are valuable and actionable:

  • The headline is that men are paid on average 9.9 per cent more than women but with significant disparity between companies and industries. Some companies like Google were quick to claim that none existed and others like HSBC, which has claimed equal opportunity as a core value, emerged as one of the worst offenders.
  • The trend in closing the gap is currently slow with pay parity only by 2048 unless something changes.
  • Interestingly, some reports demonstrated a poor understanding of statistics with 38 companies reporting no difference between median and average pay, something that is statistically highly unlikely.

It has to be said the figures are pretty depressing, but what these figures will do is put pressure on companies to action in change in a way that has not been done before. There is a very good chance that a significant improvement in pay parity will be achieved a long time before 2048 – so even if on reflection the initiative could have been delivered better it has gone further to establish change than many.

So wrong it’s right

The debate illustrates one of the key problems with measurement in business. Almost all measures other than those on the balance sheet, can be subject to debate and accusations of subjectivity.

This is particularly acute in customer experience. I’ve used all sorts of measures in my time – various types of customer satisfaction scale and, of course, Net Promoter Score – and the only conclusion I can come to is that none of them predict with absolute certainty how customers will behave.

But even if accurate prediction is impossible, correlation can give you some clues about likely customer behaviour. This is both the flaw and the virtue of Net Promoter Score: Frederick Reichheld’s research correlated high NPS with high financial performance but that doesn’t mean that in all circumstances you can generate the same increase in performance simply by raising NPS. However, the correlation indicates a general tendency for high NPS companies to do well, so if your NPS is lower than your peer group’s score it indicates there’s something you need to pay attention to and you need to drill down into the root causes of customer reluctance to promote your company.

Accountability

This is like gender pay gap reporting. Any company with a gender pay gap will appear to be under-rewarding female employees but a drill-down in to the reasons why will expose the factors that cause this. Some – such as the likelihood of women to take more career breaks for childcare – may be seen to be outside the company’s control, but the link between this factor and the disparity in pay should force the debate about what the company could do to, for example, to make it easier for anyone returning from a career break to make the same, or improved contribution that they made before the break, and to ensure that it was rewarded fairly.

Whether you are talking about gender pay gaps or the gap in your customers’ experience, the essential thing is to have people accountable for the changes in what the organisation does and the improvement in the associated measures.

In the customer experience world, I have seen too many organisations where the customer experience leads have the responsibility for the measures, but insufficient accountability – whether shared or individual – exists for their improvement.

It’s wrong that women should be paid less than men for the same job. It’s wrong that people should not be seeing year on year improvements in customer experience. Both are fixed by adopting measures and clear accountability.

 

NickB

Travelling hopefully: the problems of accessibility

When customer journeys are actual journeys it’s hard to get a joined-up solution

I love a challenge and this one seemed quite straightforward: two elderly people – my in-laws – are travelling by train this weekend to Paddington station in London. I need to get them from there to my home with a minimum of walking.

Little do I realise that planning this simple piece of travel will send me on an information hunt lasting well over an hour and requiring almost Sherlock Holmes-like detection skills.

I start with mobility assistance at Paddington. I call the accessibility helpline shown for Paddington on the National Rail website. I’m put through to Ruth, who suggests a buggy to pick them up from the train, although they’ll need to phone the booking line to arrange this “owing to data protection”.

“That’s great” I say, “now where can the buggy take them?”

“I’ll just check” says Ruth – a few seconds pass then “there’s a drop-off at the taxi rank above platform 12.”

“OK, is that a pick-up point as well?”

“I’ll just check”.

At this point it dawns on me that she is looking at the same information that I am which, as it wasn’t much help, is why I called the helpline in the first place. We draw a blank.

“I’ll try putting you through to customer relations at Paddington.”

I’m then put through to Carl at GWR. Carl is also willing to be helpful but after describing the situation we seem to be treading much the same ground as before.

“I don’t have a physical view of the station” he says. “I’ll tell you what, why don’t you phone the helpline.”

He then gives me the same National Rail helpline that I dialled to start with.

Loopy

After a fruitless Google search to see if there is a way of breaking out of this loop I dial the accessibility line again.

This time Jamie at National Rail confirms that if my in-laws ask to be taken to the taxi drop-off area I can pick them up. We then conduct a joint mission to decode the information available on the website and Google satellite view and deduce that the drop-off point is signposted from the access road in Praed Street. I decide that I’m not going to get any further and thank him for his efforts.

Image (c) Google Maps

A quick check on Google StreetView suggests that the Praed Street access road might not be that accessible, but I am now in the frame of mind that this whole exercise will be an adventure or quest that I will have to get some fun out of. The prize is clearly going to be some valuable and scarce information.

But this is too high-risk. Knowing the routes around the station, I know that a wrong turning could leave my in-laws standing around while I navigate the various one-way and no-right-turn roads in the area.

I have a brainwave – call the station and ask the simple question “how do you reach the drop-off point?” I type “paddington station number” into Google and dial the 0345 number that comes up. My heart sinks somewhat to discover that it’s another Network Rail number with an options menu. I repeat the question to the helpful woman but as I suspect, she’s in a Network Rail call centre so doesn’t have the information – but she does have the actual number of Paddington Station.

I speak to someone at Paddington Station reception, who confirms that the drop-off point can be accessed from Bishop’s Bridge Road – this is at the other end of the station from Praed Street – but crucially advises me not to go into the taxi queue on the left but to go into the right-hand lane, then turn in. This is the crucial piece of information that I have been after, so I can now plan the pick-up with almost-military precision.

Problem solved for now, but why does it have to be so difficult?

Silo thinking

The various actors in this journey are all operating in silos and, to make matters worse, they are remote silos: all the people I spoke to were operating in a remote call centre providing only the same information that I had already got on Google. They were all professional, courteous and helpful but their help couldn’t reach as far as joining up the bits of my customer journey: in other words, they weren’t outcome focused, since my outcome is “get my in-laws to my house with the minimum amount of walking”. I only managed to piece together the information because I’ve had many years’ experience of picking up and dropping off at Paddington as its been through several improvements and modifications. Anyone without that level of knowledge – or access to Google Maps – would have most likely been given the wrong information.

It could have been worse

This lack of joining up and thinking end to end was highlighted in a more high-profile case at the weekend when BBC defence correspondent Frank Gardner who uses a wheelchair since being shot in 2004 was stranded on a BA flight for 100 minutes on arrival at Heathrow. It’s common practice to stow wheelchairs in the hold and clearly mark them with a label to take them to plane door on landing. Clearly this didn’t happen and according to Gardner it’s not the first time either.

Coincidentally, a couple of days earlier I had met with Samantha Berry, a passionate advocate of customer experience and accessibility for Omniserv, who provide mobility assistance at Heathrow. There will be more on that meeting in a future article, but my take-away from the Paddington experience – and the Frank Gardner incident – is that you need the following conditions in place to provide a joined-up solution:

  • An understanding of customer outcomes
  • Access to detailed local knowledge
  • The ability to act on that knowledge to deliver those outcomes.

It’s easy to state, but apparently quite hard to do.

Postscript – on the day

Here’s what actually happened…

Armed with the essential knowledge about the entrance to the drop off area, I set off in time to arrive about 3 minutes after the train was due in to the platform. Perfect timing but no sign off the in-laws. I wait 5 minutes. No in-laws. I try calling. No response. I repeat this process over the next 10-15 minutes. Eventually I notice a poster with a number to call.

I speak to a helpful person at Paddington station reception. He informs me that the mobility buggy didn’t pick up my in-laws because they weren’t there on Platform 1. Had they actually travelled on that train? Yes, because my mother-in-law had called me. I make one final attempt to locate the errant in-laws and get through to my mother-in-law who was wondering where the buggy was when the train had arrived at Platform 10. I call the reception number again with their precise whereabouts and the same helpful person jumped into a buggy and picked them up.

One small error of coordination cost me 20 minutes wait time (not a big problem) and two rather confused in-laws (slightly bigger problem). Clearly getting these elements to join up continues to be a challenge…

The return journey was all fine however: the buggy arrived at the drop-off point and off they went, happily seated on a GWR train although as there had been a number of cancellations they were in a minority. GWR’s lamentable performance however is another story.