The $30 trillion challenge

“My lesson for financial services brands, actually for all brands, is that delivering the best customer experience is something that technology can enable and make better. But it will always require people who are well trained, compassionate, and empowered to solve the toughest problems, money being key among them. Different customers want different levels of high tech versus high touch engagement. Technology will enhance the experience. The brands that win will be the brands that know how to use it to get closer to the customer.  With $30 trillion at stake, I’d figure out how to get really close.”

triljoenOneThis is the closing paragraph from a recent Forbes article by Allen Adamson and the full article is here for you to read.

He makes the case that brands, most noticeably in the financial services sector need to use technology as an enabler to deliver great customer experiences, as well as being able to make more tailored offerings to individual customer (and channel) preferences which I’d all agree with.

However, what’s more interesting is the $30 trillion he makes reference to. (Here’s a nice little graphic to show what $1 trillion dollars looks like in $1 bills..! as does the image above)

The $30 trillion as Adamson explains is what’s expected to be left in wills and handed down from the Baby Boomer generation to the Millennials to invest and spend. The biggest wealth transfer ever!

That’s a significant amount of motivation for the financial services industry to up their game, should they choose to accept the challenge. Time will tell.


Leading on Service

In a previous incarnation, I worked in the fleet and leasing industry. For the benefit of those people who are unfamiliar with it, as a company we provided fixed term finance to businesses who wanted to provide company cars to their employees (so lease rather than buy).

We then provided support services as required during the life of the contract, which could include maintenance, breakdown recovery, windscreen replacement, accident management and fuel cards as required. All the support services were provided by third party providers under agreement which was a common setup in the industry.


The industry itself is an interesting one in which, at the risk of generalisation, products and services are pretty much of a muchness. This in the main is due to the regulation around financial products and accounting principles for tax and how companies treat assets; on versus off balance sheet treatment, depreciation etc.

So contract hire (which is one of the most common products) is well, contract hire. Terms and conditions like up front deposits vary slightly between competitors but at its core, contract hire as supplied by most companies is exactly the same given the accounting and legislative rules.

The same goes for services. Breakdown cover is the same. It might be RAC or AA or Green Flag who actually turn up, but again at its core it’s the same service. It might be packaged slightly different, but nonetheless, it’s essentially the same

Differentiation was (and still is) difficult. Price was always a significant factor, followed by customer service, account management and in life support in addition to flexibility within customer contracts.

Reflecting back now with my customer experience perspective, there was no real equivalent in the fleet industry as, say, First Direct is to the financial services industry these days. No real standout leader that everyone aspired to be like, and who really delivered fantastic customer service.

We tried but were never really in the running. We were good at the basics, but we had inflexible IT and a company structure that promoted silo working practices which stood in the way of delivering a real stand out customer experience (sound familiar at all?).

We had competent people in customer services, of course, and across the business, but the business did first and foremost what was most important to itself, not the customer.

So it was refreshing to come across The Miles Consultancy, or TMC as they’re also known.

TMC logo on wall

They’re not a leasing company but they do stand toe to toe with others in the fleet industry as a service provider. As a relative ‘newbie’ into the industry, having only been launched in 2004 by its founder Paul Jackson, they are already punching above their weight both in terms of innovative products and an impressive customer line up but more interestingly (to me anyway) with their customer service delivery.

TMC by their own description are ‘Europe’s leading Fuel Card and Mileage Expense Management specialist’. Their products are already award winning having scooped Fleet World Magazine’s ‘Best Fleet Management Service 2014’ and I’m sure there will be more accolades to follow.

Their mileage capture solution for company car drivers is fully HMRC compliant in addition to providing customers with typical cost savings in the region of 25% which is big money for any fleet and especially if you’ve got hundreds or thousands of business drivers.

Petrol pump

They also have an app which drivers can use to capture mileage real time saving the need every week to fill in cumbersome and unwieldy (in my experience) mileage reimbursement forms.

The first thing you notice about TMC is that they’ve got a customer contact centre. ‘What’s different about that?’ I hear you say. Well nothing really until you look at most of TMC’s competitors. The norm is a web-based solution with no access to real people for help and support when it’s needed.

TMC’s customer service manager, Alison Hewis, says: “People want to call up and talk to a customer service advisor who knows their account and knows about their business. What we sell is not just a piece of software, it’s a whole service.”

And they do just that. However they’re not content with their service which they’re being as innovative towards developing that as they are towards their product offering.

Last year saw the launch of a new joint venture product, which is already leading to significant business growth, with both an expanding client list and employee roll call.

Barclaycard fuel card

However, TMC recognised themselves that this growth would bring challenges, including increased inbound and outbound contact. A challenge that if not handled well could seriously impact existing clients and the great levels of customer service they currently deliver. Many companies either fail to spot this impending challenge or act too slowly to avoid the inevitable drop in service levels which often arise when businesses grow or change.

This in turn gives rise to increased queries and complaints and in the worst case scenarios, customers defecting to competitors with the corresponding brand and reputational damage that accompanies it.

“Obviously, we are very protective of our high standard of service and we do not want anything to threaten it,” says Alison. “This led us to devise a Customer Experience Programme to ensure we are ready for the influx of new customers and drivers brought in by the new fuel and mileage service.”

The customer experience development programme has already seen a number of initiatives deployed around the business, with more planned for this year.

Activities focused on engaging employees through defining vision and values from the ground up, building knowledge and skills with customer agents through advanced training and engaging more proactively with customers and importantly ‘future proofing’ service levels and their customer experience through the ongoing growth period.

Vision and values

The fact that TMC acted before customers are adversely impacted, which would inevitably lead to customer dissatisfaction, speaks volumes about the high regard they have for their customers.

“The programme has been really valuable for us and for the experience of our customers. It builds on what we were already doing right and gives us a codified framework on which we can scale up our service in line with TMC’s growth,” explains Alison. “We’ve enhanced the effectiveness of our regular call-quality reviews, which look at the personal side of interactions as well as measuring how quickly we achieve the desired outcomes. We hold regular brainstorms and share knowledge so every colleague is able to handle any call efficiently.”

As if all this change and activity isn’t enough, they’ve just submitted their entry for the Fleet News 2015 Customer Service awards.

“We’ve got a good story to tell the judges, with excellent retention figures and testimonials to back it up. The great thing is that we are empowered and trusted by TMC, which makes a difference that customers obviously notice when they deal with us,” concludes Alison. Love customers

Sights are also set to compete out of industry in the UK Customer Experience Awards in the near future. A move which is both bold as it is brave as they’d be up against the best of the best. However, that’s where the ‘world class’ bar is set and TMC certainly aren’t ones for aiming low.

Article originally written for CXM – Customer Experience Magazine


Honesty, expectations and reality

Amongst Richard Branson’s many quotes that have been published over the years, my most favourite has always been this one; “Customer service is about attention to detail and communication. Neither of which are difficult so naturally they’re the first things we forget!”

It’s my favourite because he’s right.    usain-bolt-richard-branson-944438633

I worked with a bank a while ago who measured customer satisfaction every year with their business customers who were mainly small and medium size enterprises. The previous year’s survey had highlighted a very painful customer issue which the bank was already aware of. It was their online customer banking portal that business customers used to transact on their accounts.

And when I mean painful, it was excruciatingly painful for customers. If they were able to log on, which at peak times during the day, they mostly couldn’t, the portal often crashed, was very slow to use and overall wasn’t a great customer experience. You could sense the frustration in the customer feedback that came with the survey.

I specifically remember one comment from a customer who used the portal to pay employee wages. The lady indicated how she had to wait until midnight each month to pay the wages, to ensure she could get onto the portal when very few others were trying to use it and to minimise the risk of it crashing and her having to start all over again!

Online banking

When we measured customer satisfaction the following year, the same issue came up again and not surprisingly. The IT project that was running behind the scenes to build a new online customer portal had yet to be delivered and had faced delays to the original deadline due to a change in provider. It was running about 12 months behind and was already over budget.

Apart from these obvious issues, it was clear from the customer feedback in the second year that the bank hadn’t kept them informed of the project progress (or lack of) or even attempted to manage customer expectation as to when the solution would be delivered.

Again a memorable comment from a customer went along the lines of “we told you about this last year and you’ve done nothing about it. So you are either just ignoring us or you just don’t care!” Either way a scathing observation.

However in reality, the bank was doing something about it based on customer feedback. What it wasn’t doing though, was managing customer expectation by communicating with them at all. Not even irregularly.


Now arguably, it could be said that the bank didn’t want this embarrassing situation made public knowledge, but by not doing so, it wasn’t exactly putting customers first and setting the right expectation. The bank were dammed either way in reality and it was more about damage limitation. Say nothing – customers become frustrated and leave, which was already a real possibility. Say something, and be potentially ridiculed by competitors and customers may still also leave.

However, I personally think they missed a massive opportunity to engage with customers, in addition to failing to effectively manage customer expectation. Even the Bank staff were fed up with hearing the same complaints from customers, but instead the Bank simply said nothing.  A frustrating situation for all concerned, but an entirely preventable one if they’d just talked to their customers and explained.

Sound simple? It should be.

I bet they’d have got more ‘brownie points’ and goodwill back, if they had communicated with customers despite the project being delayed. Don’t you?


Can you value and recommend a product you never use?

Not many people I know like having to pay car insurance. It’s perceived as a necessary evil and an additional expense and cost. I understand why we need it, but it always feels like an additional tax. And it’s not even a remotely glamorous or exciting purchase now is it? No insurance is.  Car crash

Like many insurance products, it sits in the background and you only get to know if it actually works, when you have to make a claim. Until this situation arises, you don’t actually know if the product you bought up to 12 months ago, will do what you need it to, when you need it,  in an easy and effortless way.

Assuming it does all work, the resulting perception of it’s inherent value is probably high. If the claim was problematic and protracted though or didn’t go to plan, then the resulting perception of value will likely be low.

Given, I’ve not had to make a claim (touch wood!) since renewing my policy in January this year, I was surprised to receive an email yesterday asking me ‘rate my car insurance’ and asking me whether I’d ‘recommend them’.

Always the ‘geek’ when I get stuff like this through, I couldn’t help but click on the link for the short questionnaire, powered by reevo the review site.

True to their word, it was indeed short. 3 sections on ‘rate your product’, ‘rate the provider’ and a final section to add personal details on me, if I so wanted.

However, within the product section, there were 3 questions;

  1. Ease of applicationInsurance claim form
  2. Value for money
  3. Overall rating

I could answer number 1 no problem, but I couldn’t answer 2 or 3 which is where this very well intended attempt to gather customer feedback stalled and then crashed in flames. If I answer question 1, it’s based on my actual experience. If I answer 2 and 3, given I’ve never made a claim it would be opinion, rather than based on my experience and whilst I could do that, how do I know whether my policy is actually good value for money, never having used it? I know how much it cost but that’s not the same thing. And if I never use it, will I ever appreciate the potential value in it?

The second section on the supplier was similar.

  1. Would I buy from them again?
  2. If I contacted customer services, was my query handled effectively?
  3. How likely would I be to recommend them to a friend?

If I was honest, my answers would be;    Recommend image

  1. It depends (based on price if I never make a claim, or how well my claim was handled if I have one which to date I haven’t)
  2. No
  3. It depends (again, if I never make a claim, what am I recommending apart from price in the main?)

Whilst I’m all for businesses and organisations seeking proactive feedback on customer experience with a view to improving it, this could be done in a much more valuable way.

Rather than the Insurer seeking blanket feedback from all customers, whether they’ve had a claim or not, they should separate customers to get feedback on different parts of the insurance life cycle; i.e. purchase, in life, claims handling, repurchase

  • For customers who have never claimed, they should seek feedback on the initial upfront processes (like ease of application) and any communication in life since the product was purchased.
  • For customers who have had to make a claim, focus on the claims handling experience and their likelihood to recommend and repurchase as a result of the way the claim was handled.

It’s a subtle difference and slight change of approach, but one which would generate more feedback and insight from customers which the insurer could then use to improve the whole insurance life cycle.

They might even go some way to making it a more glamorous purchase experience in the future!


Customer loyalty or a marriage of convenience?

Customer loyalty. The end game in delivering a great customer experience. Companies strive for it and it’s often the discussion at many boardroom meetings mentioned in the same breath as profit, sales and shareholder value. But there’s an issue of congruence here. Saying one thing yet doing something different and you don’t need to look far to see this playing out. Take the insurance industry for example. Loyalty sign

The debate over the practice of the automatic renewal of insurance policies for customers has risen its head again this year as it did in 2012.

The BBC Radio 4 programme Money Box revealed back in March this year that some customers were being overcharged as a result of auto renewal policies.

In July, the new incarnation of the FSA, the FCA (Financial Conduct Authority) said that “automatic renewal can lead to customers being treated unfairly.” A term introduced initially back in 2008 by the then FSA, who launched their project around ‘Treating Customers Fairly (TCF)’ as part of their ongoing strategy from the early 2000’s to address mis-selling and the fair treatment of customers.

More recently in October, the Money Box programme re addressed the issue amidst concerns about ‘sharp practices’ from insurers and the impact on customers. A representative from the Insurance industry argued that the benefit of automatic renewals are that they ensure that no one accidentally forgets to take out insurance, for which the consequences could be a breach of law or loss of cover in the event of an accident or event. Fair point indeed and a useful mechanism deployed in the right way but I would argue that it’s the way that auto renewals are conducted that is the issue here which also calls into question the value of customer loyalty.

Recently a business contact of mine had their auto renewal notice through for their house insurance policy. £253 for the year was the new price and on the back of no claims in the previous 12 months. The letter made no reference to a price increase and contained the usual text around not needing to take action for the policy to roll over giving piece of mind etc. etc. Hands over house image

Out of curiosity, my contact decided to check a well know comparison website and was able to get a comparable policy for £180. Not content with saving £73, she checked the insurers own website posing as a new customer and was able to get the same policy for £121, over half the cost of the original renewal quote.

On the face of it, this potentially ‘sharp practice’ whilst not illegal as such, seems counter intuitive to delivering a good outcome for some customers and does little to create an environment that fosters customer loyalty in an industry where customer churn is rife and consumer perception is far from positive.

So for me, this scenario raises a number of questions;

1. If the annual price increase is legitimate, why not bring it to the attention of the policy holder at point of renewal and explain the reason?

From the insurer’s perspective, they may not like communicating bad news to customers about price increases and so they might hope that customers either don’t notice or don’t check. By not doing so the insurer potentially ‘gets away with’ the annual price rise balanced against the risk of ‘getting caught’ and the customer leaving. Also, there is an element of ‘caveat emptor’ here or buyer beware and a responsibility of the customer to check – assuming they have the capability to do so, which is the complaint that the FCA are currently investigating. However in the interests of a genuine long term customer relationship, surely you’d mention something as important as a price rise wouldn’t you?

Alternatively, as in the case of my contact, having checked the price elsewhere, they have now switched insurers and avoided the price rise. In addition though, the way this auto renew was handled created a feeling of mis-trust about this particular insurer and their price rise motives and a heightened perception that insurers in general are untrustworthy and that price rises are illegitimate. Not a great outcome for anyone concerned.

2. By treating customers in this way, do (insurance) companies actually value customer loyalty?

The short answer appears to be no based simply on a view of their actions. Maybe the company perception is that because the market is transactional and that customer loyalty doesn’t exist anyway and so why try and keep customers by continually giving them the best price every time.

Maybe companies count on the fact that customers are mostly apathetic about insurance seeing it as a necessary evil in some instances and so they won’t spend the time each year searching comparison sites to get a better deal. Time that customers could spend on something much more entertaining than insurance.

Maybe companies also count on customer inertia against comparing and swapping policies that they’ll let the policy automatically renew in order to take path of least resistance.

Seth Godin talked about ‘Two kinds of loyalty’ in a recent blog here; ‘the loyalty of convenience’ and the loyalty of ‘I’m not even looking’. I’d suggest that insurance is a loyalty of convenience which is only as good as it is just that – convenient. Significant price rises aren’t convenient.

3. Is it all about new customers? New customers only sign

They’re like shiny new things aren’t they?  I’ve heard it many a time; “How many new customers have we gained this quarter?” “How’s our market share increased?” In the same breath though are companies also asking “What’s our customer attrition like and “why are customers leaving?”

It probably follows the 80/20 rule in that 20% of customers will probably always shop around based on price. Just because the 80% don’t, it doesn’t necessarily mean that they’re hugely loyal or brand advocates. Maybe it’s just currently convenient.

4. How much is a new customer worth?

What’s the lifetime value of an insurance customer over say 10 years versus 12 months? I’d wager that it’s significantly higher for a customer that stays 10 years if managed properly. Would you even breakeven on a customer over a 12 month period given the acquisition cost per head? It feels unlikely and yet insurance company behaviour is actively driving the market towards transactional rather than value based behaviour and away from cultivating real customer loyalty. It could be argued that the only way you demonstrate value on insurance is when you make a claim. That’s when you know it works. Otherwise it just sits in the background and you never realise the true value of it.

Technology makes it increasingly easier for most of us to shop around and make comparisons and social media makes it quicker and easier to highlight and publicise poor customer experiences or companies that deploy ‘sharp practices’. Companies however can keep customers loyal as long as they follow the basic rules of cultivating any relationship which include fairness, openness and transparency.  Congruency is also hugely important. If you say you value customers, you have to act in a way that demonstrates that and I’m not convinced that the way auto renewals are currently handled represent the best outcome for customers. Loyalty is increasingly a two way street and needs to be viewed as such by both parties. As long as companies don’t give customers a reason to change, most will remain loyal as long as it remains convenient.


Removing service level guarantees

I recently received a letter from my bank informing me of a number of changes to my current account terms and conditions. I don’t usually read the small print as more often than not the changes are to wording in the terms and conditions themselves rather than fundamental changes to the account. However, one of the changes particularly caught my eye and it was entitled ‘Service level guarantees’. Service GuaranteeMy immediate reaction was to expect the bank to outline how it was committing to improving service levels but once I read, and then re read the text, that’s not what the letter said.

The opening sentence of the paragraph read ‘We are removing the Service Level Guarantees’. Not improving them or even raising them to a higher standard – just removing them. The paragraph went on to say how my right to express dissatisfaction or complain hadn’t been removed and how well established their procedures were to allow me to do this should I need to. Interestingly, they didn’t say exactly what the service level guarantees were so curiously, I dug out the terms and conditions booklet which I’d efficiently filed without reading. The booklet itself, whilst looking small, opened out to be 5 sides of uber small print containing 20.2 clauses, non of which as far as I could see outlined any service level guarantees. So I was left to phone the bank and ask them.

It transpires after a conversation with Bernadette, that the bank wasn’t removing service level guarantees. Confused yet? It was removing guaranteed financial payments for service level failures, the minimum being £15. So for example if the bank set up a standing order incorrectly or failed to issue a new card within the published timescales then they would automatically pay out. Instead, the bank would look at each incident in turn and judge whether a payment was warranted or not. I jokingly asked whether the removal of the automatic payments was because the bank were paying out a lot of money and were they trying to cut costs but that wasn’t the reason so Bernadette informed me.

Apart from the confusing and unclear wording on the letter. I’m not sure what I think about this. My initial reaction, based on part skepticism, part experience is that the bank were trying to wriggle out of it’s obligations to service level delivery, and in part I still think this. If the bank were truly focusing on service delivery, they shouldn’t be worried if occasionally they slip up and have to pay out on a previous commitment. I understand times and situations change and the need for review but attempts to change promises like these rarely provoke a positive response and can feel like an erosion of both brand and service. Interesting, this letter came to me in the same week the bank’s new Chief Executive announced the need to add £1.5bn to the balance sheet in part due to losses from 12 commercial loans (£900m) inherited in a building society take over in recent years. Coincidence I’m sure.Red traffic light

However, in fairness, having worked in financial services where service level penalties are common,  and used in my experience for all the wrong reasons as a stick to beat up suppliers, they’re notoriously difficult  to operationalise, to measure and manage and they tend to become the focus of too much attention. One such customer account had in excess of 80 service level measures, a number of which were deemed critical, upon which failure brought an automatic financial penalty wheres the rest worked on a sliding scale. The majority of measures and the data collection wasmanual which in itself was a cottage industry. Time that could have been better spent serving the customer. There was a palpable sigh of relief every month in the organisation when the results were published and all the traffic light measures were ‘green’. The opposite, if any were red not to mention the pressure and fear they created internally -not a great climate to work under. It also drives cost up which ultimately gets passed onto the customer so they loose there too. If the bank gets something wrong, just put it right – quickly and efficiently.

As a customer, I’m not really interested in guaranteed financial penalties.  If I was in a supplier relationship I might want financial penalties for service level failures, but personally I don’t think it drives the best behaviour or cultivates the right relationship. So removing something I wasn’t aware of existed is no bad thing but it does make me question the reason why,  which in turn makes me trust the brand less and introduces doubt, and that’s not what I’d be setting out to achieve if I was the bank, given the current climate.



NRAM – ‘not right about much’…

Many years ago, I took out a Northern Rock mortgage, probably at the time when the company was at the height of it’s success and a good few years prior to it’s bail out by the Bank of England in 2007.There’s a brief history of events here if you want a reminder and I’m sure you remember the televisions images of the many people queuing outside branches to withdraw their money, worried by the thought of losing some or all of their savings.

NRAM (Northern Rock Asset Management) was created after the company was restructured in 2010 and remains in public ownership and managed by the Government. Northern Rock plc was sold to Virgin Money in 2012.

The mortgage itself is now long gone so I was quite surprised when I got a letter from NRAM yesterday. What surprised me more as I read down the letter was the fact that there was with a cheque attached to the bottom with the princely sum of £76.62 exactly! Don’t get me wrong, I wish these sort of surprises would happen more often! Interestingly the opening line on the letter read ‘NRAM is committed to providing our current and previous customers with a great level of service ‘ – sounds like a line you’re fed before being told something’s gone wrong – or am I just a cynic? but then we got to the point. The apparent reason for the refund was a result of an administrative error when the account was originally set up. However the letter omitted to explain what the exact error was so naturally I was curious to understand more and to know whether this was the extent of the issue or not. In addition to this, the cheque was made out in joint names, understandably given I was married at the time but I was unsure whether I could now cash the cheque in it’s current form. So I called the ‘UK based call centre’ to ask them a couple of questions – what was the error and how do I cash the cheque. The girl I spoke to was very polite however her first response was ‘we’ve had no communication about any of this and so I can’t tell you anything.’ She then went on to add that I should get a letter shortly explaining everything. ‘but shouldn’t that be the other way round?’ I responded. ‘I quite understand’ she said ‘but I can’t do anything about it!’ ‘But if you’ve sent loads of cheques out without any explanation, then surely loads of people are going to call you with questions which you can’t answer because you’ve not had any communication? And so isn’t that a waste of everyone’s time and money?’ Again, she replied, ‘ I quite understand but there’s nothing I can do but I’m more than happy to pass on your feedback’. ‘No don’t worry I said’ and then to add to the debarcle, it transpires that in order to get the money, I’ve got to return the cheque and ask for a re issue!

This is business basics surely isn’t it? We’re not even into the realms of delivering great customer experience yet not to mention wowing the customer. It’s what Tom Peter’s would call ‘sticking to the knitting – being great at the core business and getting process steps in the right order, whether they be short term ones like this around a refund project, or the day to day core operational processes that service delivery is built on. Get a step in the wrong place or out of order and everybody looses. Customer effort increases as do levels of frustration for both customers and employees and overall levels of dissatisfaction. In the cold light of day, this is borderline madness whether a genuine mistake or an ill thought out and mismanaged project – the impact is the same.


A quick look at the NRAM website uncovered this gem of a statement ‘We are making a positive impact on the lives of our customers, whilst maximising value for the UK taxpaying public’ Really?? and this one … ‘Government owned. Mortgages in expert hands’. So where’s the value in having to field a number of excessive telephone calls, hundreds, or even maybe thousands because letters went out in the wrong order?? The girl I spoke to sounded frustrated and it was only 9.30am. I reckon she was in for a long day….