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Lush tops Which? customer service survey

The annual customer service survey from Which? is out and the usual suspects feature at both the top and bottom of the list of the 100 big brands rated. You can read the full results here but we’ve summarised the highlights below.

Lush_Logo_640x350The top rated brands were;

1. Lush – 89%

2. First Direct – 86%

3. Lakeland – 84%

=4. Body Shop – 83%

=4. John Lewis – 83%

=4. Waitrose – 83%

Floundering around at the bottom of the list, providing little in the way of surprises came these brands;

=95. Ryanair – 66%

=95. Vodafone – 66%        Which best buy

97. Talk Talk – 64%

98. BT – 63%

99. npower – 61%

100. Scottish Power – 59%

Each brand was rated across 5 areas of service with a possible 5 star maximum in each. The areas scored were;

  • making their customers feel valued
  • knowledge of products and services
  • helpfulness of staff
  • resolving complaints or problems
  • access to customer support.

The 3,501 general public respondents were also asked to give brands an overall rating for customer service, which is where the customer service score comes from. Amazon, M&S, Pets at Home, Waterstones, Dunelm, Clarks and the RAC all made the top 10.

Despite being voted Which? supermarket of the year in 2014, Aldi only managed joint 73rd with 14 other brands including Virgin, British Gas and JD Sports all scoring 71%.

Utilities and telecoms continue to struggle to get to grips with customer service with Scottish Power who were 99th last year swapping places with npower who have been bottom for at least the last two years. Scottish Power, attributed their woes to the often blamed scapegoat of IT. “Last year all our customer accounts were migrated on to a new IT system, which resulted in a very busy period as disappointingly we experienced more problems with the new system than we would have liked.”

IT aside, these two sectors have done little to visibly improve, with big players losing significant ground and customers to the disruptive likes of Ovo Energy and Ecotricity.

If this continues, I wouldn’t be surprised if the respective regulators for these two industries ‘impose’ a change on behalf of customers. Interesting times!

 

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Utilities take another customer service bullet

It’s been another dire week for utility companies again after the recent publication of a Which? report outlining call waiting times for customer service versus sales lines.

Which best buy

The report itself if you want to read it, can be found here but I’ll give you the highlights.

384 calls in total were made to 16 energy companies, both to their sales and customer service numbers. Call were made at set times during the day and the average call length calculated across all calls to each provider.

The times varied, both across all 16 providers and between the sales and customer service numbers.

The best performance came from Ebico, the UK’s only not for profit energy provider (I’m switching after I finish this blog..) Average call waiting time to their customer service line was 30 seconds versus 47 seconds to get through to sales.

EBICOHowever Scottish Power got their own special recognition for a particularly spectacular performance. Calls to their customer service line averaged a whopping 30 minutes versus 49 seconds for sales. Bearing in mind too that if 30 minutes was the average what must the longest have been?

Now there a couple of points here to pick out here which I’m sure you’re already onto.

Firstly, that’s horrific service. Not just a bit poor, or slightly painful. Horrific. Assuming they’re measuring average waiting times as part of their fundamental customer experience metrics then they’re clearly doing little or nothing to address anything of the root cause or manage customer expectations to appease them. To add insult to injury, Scottish Power is also under pending threat from Ofgem to reduce average waiting times to 2 minutes by January (better hurry up..). If they fail, they’ll be unable to sell new tariffs (ouch) which you would think would focus them on their ‘to do ‘ list with an increased sense of urgency.

Scottish Power reportedly blamed – yes you guessed it, IT and a new system. Oh and a shortage of staff, neither of which are impossible to manage. So did the IT system not also impact sales then??

Which-energy-company-infographic-oct14

This is the fourth time Which? have conducted this test and overall the results haven’t got much better. Interestingly, npower have improved, albeit from such a low point it would have been hard to get much worse.

Secondly and the other real rub here is the difference between customer services and sales which is the real story and outlines the real priority and drivers of the company.

Clearly Scottish Power can answer the phone quickly when they want new customers, but not for existing customers.

Such an overbearing focus on new customer is short-termism at it’s best and a sure fire way to haemorrhage customers out of the back door, which actually for all I know might currently be the case.

Whatever the real reason, practices like these have a significantly negative effect on the bottom line, not to mention the customer experience and levels of customer retention.

As a final point, with this level of service, you’d think that customers would be switching in their droves to find both a better service and a better deal. Apparently not, according to Consumer Focus. In January 2013, they posted that;

“tracking surveys for the Department of Energy and Climate Change (DECC) and energy regulator, Ofgem, showed that switching rates are down by a quarter from four years ago. In 2008, 20 per cent of consumers reported switching energy firm, compared to 15 per cent in 2011/12 according to DECC’s figures. According to Ofgem’s figures 13 per cent of gas customers and 14 per cent of electricity customers switched. Our research also shows the current switching rate is just under 15 per cent.”

There’s definitely room for improvement in customer experience from the industry as a whole, but companies like Ebico prove it can be done. Time for a much needed change I think.

 

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boohoo.com really do make you cry..

I’m not a fan of just blogging about companies that get things wrong about customer experience.

To be honest, it’s too easy a target (given how many examples there are) and I know how difficult it is to create seamless and consistent experiences. Having said that, this story is a good example, for lots of reasons, but especially because it highlights the need to be consistent with both customer experience, business processes and social media presence.

Responding to a tweet in 20 seconds can create a good impression which can be quickly destroyed if you don’t do what you say you’re going to do.

Let me begin..

Recently, my partner bought some items from the online clothing retailer boohoo.com. The website user experience was good, the items we’re chosen and bought and then delivered fairly quickly.

Boo hoo logoAs with buying clothes online, especially for fickle teenage girls, a number of the items needed to be returned which we duly did and the free returns process was relatively straight forward. The credit terms from memory was something like 2 weeks from boo hoo confirming receipt of the goods back which they did several days later by email. All good so far which is where the fun and games started.

Four weeks later we were still waiting for the credit so we decided to chase them to see where the credit was up to.

Trying to find a telephone number on the website was the first frustration. One didn’t exist that we could find which, arguably is the point of being an online retailer.

The customer service tab however did have lots of advice on return, order tracking, general queries section etc but still no phone number. We did however, find an email address so we fired off a quick note asking for an update.

Multi channel

The almost instant reply that came back said that ‘the Customer Service team are currently experiencing high volumes of enquiries and so are unable to respond at this time.’

No expectation management as to when they might be able to help, just that they were busy.

Channel hoping is a customer tactic that is increasingly utilised to get a response but one that companies find hard to manage well, so we deliberately switched from email to twitter to see if we could progress our issue. We quickly found their twitter customer service account and after a quick (sarcastic) tweet to provoke a response, we got a tweet back with an invite to send a direct message with our query within about 20 seconds. Wow – what a fantastically quick response and a result so we thought, and so we sent the message with our order details.

Quite quickly we were assured that the credit would be processed and the money would be refunded within a week. Perfect.

Two weeks later, the credit was still outstanding, so once again we took to twitter. We passed all the order details yet again, and again we were assured that the credit would be refunded. I tried to articulate that we’d been here before and had had all the same assurances previously and so I questioned given that this had been promised before, what would be different this time. No real additional assurance was given to me only that the credit would be actioned.  Promises

However, true to their word, albeit second time round the credit arrived about a week later.

So what can we observe from this?

Well firstly, as a customer I still want to talk to someone when I have a problem – online retailer or not. The only get out here to not having phone agents to talk to customers is for businesses to have bomb proof process behind the scenes that enable right first time delivery on customer needs.

Secondly, if you say you’re going to do something, then you have to do it. You could say I’m stating the obvious with this one, but this is one of the holy ten commandments of customer experience in my book.

Third, it’s no good being super fast and responsive on social media, raising customer expectations if you can’t deliver behind the scenes. It’s incongruent and does nothing for the customer experience, in fact it just erodes it.

Consistency across multiple channels is an area where many businesses are struggling. However this multi channel approach to contact is being driven harder and faster by customers from both the home and mobile with the need for immediate and responsive service and with little tolerance for those that can’t deliver quickly and seamlessly to meet customers needs.

This is definitely a theme that will remain the focus into 2015 for both businesses and customers so I’m sure we won’t hear that last of challenges like this.

 

 

 

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Sledgehammer to crack a nut?

“Co-op looks to trolley mounted tablets to boost customer experience”

Now don’t get me wrong, I’m all for using technology to improve customer experience or even anything else in life come to that, but to me this seems like using a sledge hammer to crack a nut!

co op food

Despite this seeming to be an overly elaborate and unnecessary use of technology there are some obvious drawbacks to this plan in my view.

By their own description, the Co-operative is, amongst many other things about ‘local convenience’. Convenience which is about top up shopping rather than a weekly big shop which research has actually demonstrated. Top up shopping means baskets rather trolleys. Average spend per customer is probably less than £30, all of which can fit in a basket.

From personal experience, I’ve never used a trolley in a Co-op. Ever. Predominantly because they’re at least 10-20% more expensive that other food stores and so the thought of buying enough shopping to necessitate using a trolley just never happens.

So I would suggest that the people that do use a trolley in the larger stores, most of which are probably in more affluent areas as far as I’ve seen, are more affluent and so will provide only one perspective on customer experience.

Also, some of the smaller stores (which make up the majority of the Co-op’s estate) aren’t even big enough to accommodate trolleys so does that mean the experience of customers that shop there doesn’t count?

More to the point I would suggest that anyone who’s been in a Co-op can tell the business what they need to do to improve without the aid of a tablet.

  • Eliminate the queues. Convenience needs to be easy otherwise it’s not convenient.
  • Supermarket QueueFresh produce needs to be fresh
  • Popular product ranges need to be stocked where physical store space permits
  • Provide better value for money. I’m happy to pay a small premium for convenience if a) it’s actually convenient b) the premium is small. 20% isn’t small in my view.

So there you have it. No tablets required either to rent or buy. No lengthy data collection trial in store with customers. No resource required to process the data. No glorified report with graphs, charts, customer segmentation profiles and customer comments to tell those in charge how to improve customer experience.

Call me a cynic but sometimes, improving customer experience is just about delivering on the basics consistently. Nothing more, nothing less. Or as Stanford University Professors Sutton and Rao claim in their book ‘Scaling up excellence’ it’s about ‘fixing the plumbing first’.

Here is the link to the original article published in Business reporter.

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npower: Customer experience Titanic or Titan in the making?

Paul Massara took over as the chief executive of npower in January 2013. Arguably a difficult job to take on, not least because of the poor customer service reputation and previous mis selling practices conducted between 2009 and 2012, allegedly while they were ‘making changes to their sales practices’. Ofgem found them guilty in December 2013 and ordered them to pay £3.5 million back to vulnerable customers. So not a great back stop or foundation from which to make the announcement at the beginning of his tenure that his company would be “number one in the industry for customer experience by 2015”.

Bold words indeed. Not least because of the very challenging timeframe he’s committed to delivering on, added to the very low starting point npower are trying to build from.

Looking at the UK Customer Satisfaction Index results from January 2014, the utilities sector as a whole is the lowest performing of 13 sectors with an average index of 69 from 100. This has dropped by 2 points in the six months from the previous measure in July 13. Whilst all bar one sector saw decreases over the same period, utilities was the largest decrease. In comparison, from the January results, the highest performing sector is Retail (non-food) at 83.1.

To further compound matters, January saw Which? publish their Which? Switch customer satisfaction survey, covering 20 energy providers (17 from England, Scotland, Wales and 3 from Northern Ireland).

As shown in the table below, npower came 20th out of 20 based on each energy supplier receiving a customer score based on their overall satisfaction and the likelihood they would recommend it to a friend. nPower had 892 customers respond in the survey. To further add to npower’s woes, this isn’t the first time they’ve featured bottom in the Which? survey. It’s the third year running.

 

2014 energy companies satisfaction survey
Supplier

Customer service

Value for money

Bills (accuracy and clarity)

Complaints

Helping you save energy

Customer score

England, Scotland and Wales
1. Good Energy

82%

= Ecotricity

82%

3. Utility Warehouse

75%

4. Ebico

74%

5. Ovo Energy

73%

6. The Co-operative Energy

64%

7. Utilita

n/a

n/a

n/a

63%

8. First Utility

58%

9. Marks and Spencer Energy

51%

10. Spark Energy

48%

11. Sainsbury’s Energy

n/a

45%

= Eon

45%

13. EDF Energy

44%

14. Scottish Power

41%

= SSE

41%

16. British Gas

39%

17. Npower

31%

Northern Ireland
1. Budget Energy

n/a

63%

2. Airtricity

n/a

54%

3. Power NI

n/a

45%

Reflecting back on Mr Massara’s statement and intention given npower are already 12 months in to their 24 month improvement target timescale, a number of questions arise that I wanted to discuss;

  1. Was it all hot air and bravado in the first place that npower wanted to be No.1?
  2. Can it actually be done?
  3. Can it be done in 2 years?
  4. Has anyone ever done it?
  5. What would it take for it to be achieved?
  1. Was it all hot air and bravado in the first place that nPower wanted to be No.1?Whilst I’ve not spoken to npower directly, I’m assuming it wasn’t all hot air and bravado. The consequences and ramifications of making a statement like that without the necessary intent would be a further nail in npower’s customer service coffin. So, if we assume the intention was a serious one, it’s still a very brave statement not least because people will hold him accountable for delivering on his promise. People being customers, npower’s owners (RWE), industry watchers and the regulator Ofgem. Also by putting a statement and a commitment like this out in the public domain, in a reverse psychological sort of way, npower may actually commit to taking the significant steps and making the changes to achieve what they intend. Top down commitment and leadership, not just in creating a truly customer centric culture but in any business change is essential so Paul Massar’s message sends out clear signals into the business.
  2. Can it actually be done?In theory yes. In practice it’s a lot more difficult which is where the fun starts.
  3. Can it be done in 2 years?No. And it’s this timescale that casts doubt on the seriousness of npower’s intent, or at least their understanding of the task involved; the systems and process changes, the culture change and the process of becoming a world class customer experience organisation which isn’t achieved in two years especially starting from the position that npower are in. Not to mention the significant amount of customer trust they’ll need to win back and the vast amount of perceptions they’ll need to change along the way. 5 to 6 years might see them up to mid-way in the table or at least top of the big 6 and only if they deliver on everything they need to. I’ve just read a case study about the UK hotel chain, Best Western who successfully implemented a customer engagement strategy and it took 4-5 years before they realised the benefits. Having worked with organisations trying to improve the customer experience, it can take them 12 months to work out exactly what it is they need to do, so 24 months just isn’t achievable.
  4. Has anyone ever done it?Improve –yes. Improve radically and in this timeframe– very unlikely. I must confess, I’ve not trawled all the records and data, and there are many case studies of companies that have made significant improvements, but much more incremental change over a longer period of time. Invariably, large businesses like npower don’t or can’t ‘do’ radical change quickly. There’s too many processes not to mention the behavioural changes required which don’t happen overnight. It’s the old analogy of trying to turn the Titanic –trying to change the direction of something so large that you have to start turning (or changing) long before you want to see the change. What they’ll be likely to achieve in the 2 year period you could liken to rearranging the deck chairs on the Titanic. It might look tidier in the end but the ship is still going to sink.Another factor at play here is that the satisfaction improvement curve is exponential. Initially when organisations start working to improve, especially from such a low starting point, it is possible to make significant advances. However, as levels of customer satisfaction improve, further gains become more marginal and harder to achieve and so progress slows. At really high levels of satisfaction performance, incremental gains are very slight and barely change year on year. At this point it’s more about maintaining levels of satisfaction. In addition, none of nPower’s competitors are going to stand still for fear of losing market share. So in order to improve in relative terms, they’ve got to move faster than everyone else. On current data, they’ve not even started the momentum.
  5. What would take for it to be achieved?In some respects, npower should just scrap everything they do and start again, including the brand. Whilst not always practical, it would give them a psychological clean start and an opportunity to disassociate themselves from their previous mis demeanours. However as recent as February 2014, an article reported by The Telegraph carried the story of a customer who had been overcharged on her gas and electricity bill by over £1,600 for which npower cited ‘internal billing errors’ as the cause. Whilst it’s possible that that this could be an isolated incident, it’s unlikely but it’s these sort of significant process changes that need to occur in order to be at the top of any customer ranking.Assuming they’re not scrapping everything, then they need to go through and implement the usual suspects;
  • Top down visible commitment and actions
  • A significant budget and a serious appetite for change
  • Customer focussed outcomes clearly linked to business benefits.
  • Processes designed with the customer in mind and convenient to them rather than the business.
  • For everyone in the organisation to own the customer experience, not just the frontline staff
  • Effective metrics that both drive and encourage the desired behaviours
  • A willingness to listen to and engage with the customer

It’s an interesting position and a real challenge of a journey and one that a lot of people will be keen to watch, not least npower’s customers. If they pull it off – there’s a book to be written. Watch this space.

http://www.which.co.uk/switch/energy-suppliers/energy-companies-rated

 

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Case Study: Findel Education – Transforming Customer Experience.

Getting shortlisted for the UK Customer Experience awards is an achievement in itself. Winning an award is a huge success. Findel Education fought off strong competition from the likes of LV, Virgin Media and Capita to win Best Business Change or Transformation at this year’s event.

However not content with winning one award, in the same day Findel Education won The Best Customer Experience Programme at the North West Contact Centre Awards. In addition, they’ve recently won an award for Best Improvement Strategy at the European Call Centre and Customer Service Awards. As with success in many areas, the origin of their customer experience journey started a few years ago amidst a climate that was the opposite of where Findel Education are today. Findel logo_v3

If you’re not familiar with Findel Education, a trip to any school will soon reveal who they are. Part of Findel plc, they are Europe’s leading educational resources supplier, employing over 400 employees with an annual turnover of £104 million.

A little over 2 years ago they were a very different company and the word ‘customer’ was seen as a negative word to everyone internally. Findel Education had grown dramatically over the last 15 years through a series of acquisitions bringing together a multitude of different brands, people, systems and processes.

Not surprisingly, a full business review identified that there was a significant need to change as a business, and to focus on the customer experience delivery. The findings didn’t make for easy reading. They discovered that;

  • They had lost a significant number of customers throughout 2010/11, resulting in £7m in lost sales.
  • The business was not focused on the customers’ needs; removing cost was the main business driver for decisions.
  • The marketplace was changing; there was more choice, less school funding and nothing to differentiate them from their competitors.
  • Employees were not motivated.
  • There was no clear company strategy or vision.
  • Customer Service was a contact centre responsibility.
  • They had a poor reputation for service in the market.

With this troubling environment and under a new leadership team there was the go ahead to launch a project aimed at turning the business around with 4 clear objectives;

  1. Understand what customers want.  Business and customer signpost
  2. Become easy to do business with.
  3. Engage employees (to engage customers).
  4. Focus on continuous improvement.

 

Their new vision was to become the first choice for educational resources in the marketplace, and to achieve that they had to truly put the customer at the heart of everything they did and not just talk about it. Something that is a challenge for a lot of organisations looking to improve the customer experience but an important point of congruence between what an organisation says and what it actually does.

To kick this off, a ‘Best in Class’ service culture quickly became one of their new 8 strategic goals alongside people development and process excellence.

Part of the change in culture came early on by the introduction of 3 simple questions to get employees to think ‘customer first’.

 Customer first questions

 This simple ‘Ask yourself’ campaign meant that every decision, every meeting, every discussion was focused on the customer. This became Findel Education’s customer mantra and meant that they could start to shape their customer experience change strategy.

In late 2010 the company launched their ‘Employee Voice’ and the ‘Customer Voice’ campaigns. This was a simple yet structured feedback programme that would help benchmark ongoing progress and also help them remain focused on taking the right actions.

Employees provided feedback around how customer and employee focused the business was. This gave people a voice about how Findel Education should do business and the experience provided to customers.

Once a quarter customers are asked three simple questions;

  1. Are you happy with the recent shopping experience?
  2. Would you shop with Findel Education again?
  3. Would you recommend Findel Education?

Despite the positive start, the company soon realised that they didn’t have a full view of what their customer experience looked like, where they were winning and where they were failing. They needed insight from an inside-out and an outside-in view of their existing customer experience. It was at this point they engaged performance improvement company Blue Sky.

This gave additional credibility to the programme and gained the support of employees. Hundreds of customers were involved and over 150 employees provided insight. The vast amount of information gained unfortunately presented an overwhelming picture of how much there was to fix.

However, as a priority, customers wanted Findel to focus on 4 key areas:

  1. Allow them to find the products they needed easily.
  2. To meet their service expectations, before, during and after they’ve shopped.
  3. For Findel to listen to them.
  4. To be ‘easy to do business with’.

In order to effectively manage the Customer Experience to deliver on what customers wanted, Findel Education built the foundations from the bottom up including restructuring their contact centre. Curiously, it was only at this point that Findel Education appointed a Head of Customer Service and a Learning and Development Manager. However prior to this, there had been little investment and little training but they soon realised that they couldn’t deliver the improvement programme without employee engagement and this ‘eureka’ moment formed a critical foundation to their success.

Quarterly review meetings focussed on what the business needed to do better in terms of performance and what needed to change, which resulted in improvement actions. This also ensured a process of both continuous improvement and continuous engagement with employees.

Employee engagement was a priority as all Customer Service Advisors needed to take on board the new policies and  the company’s ‘Every Customer Counts’ training embedded this.

Advisors were also restricted by historical processes that had become barriers to customers doing business with Findel Education. If an item had to be returned for example due to a processing error by the company, the customer had to pay the return costs and Advisors had no ability to waive this fee. This gave birth to the ‘no hassle returns’ policy which delivered perfectly for customers on their fourth requirement of Findel Education’s being ‘easy to do business with’ which has subsequently gone on to become their mission statement.

Through various activities like Customer-focused training for all employees, regular “Buzz” sessions for Customer Service Advisors  and a Management Training Programme to help managers support the culture change , the wider company and the contact centre culture has been effectively transformed. Employees now feel empowered to do the right thing for the customer and go that extra mile to deliver ‘Best in Class’ service.

Findel mission

 Findel Education’s new approach to delivering a holistic customer experience was summed up by the introduction of their customer charter, focussing on the three key areas of success with customers.

  1. Customer focussed attitude
  2. Market leading proposition
  3. Best in class service

This charter was designed by employees based on customer feedback and has been communicated and is visible to everyone in the business and includes Findel Education’s service promise of which their ‘no hassle returns’ and ‘free next day delivery’ form a key part.

However, this new approach to business hasn’t come cheap. Findel Education have made a considerable investment in offering free next day delivery, and packaging and courier improvements. Furthermore they have clocked up 1,324 days of customer experience training in 2012 alone. First contact resolution is now the norm and the query to order process has significantly improved.

All this investment and effort though is already starting to pay dividends. Employee perception of Findel Education as a customer focussed business is up significantly year on year with 97% of employees believing that they give customers what they want, compared to only 58% in 2011.

This improvement in results is echoed from customers too. The customer voice feedback showed that 96% of customer were happy in September 2013. The highest score since the customer experience programme began. In the same month, repeat business scores hit 100%. Customer NPS is now at 80% up from only 50% in 2011.

For anyone still not convinced on the financial return on investing in the customer experience, the numbers for this business  are healthy; sales this year are already ahead, average order frequency per customer is up from 3.7 to 5 and extra brand demand in 2012/13 equated to almost £3 million. Findel people_v3

Findel Education acknowledge they still have a way to go on their journey despite the significant achievements they’ve already realised. They’ve already identified their next steps which include customer self-service, multi-channel integration and next generation training to name but a few initiatives.

However, for all their progress they’ve made they have certainly been worthy of their three awards and they have a great story to tell about what’s possible in delivering a great customer experience once the right foundations are in place. If they keep tracking as they are, they might need a much bigger awards cabinet next year.

This article was originally written for the December issue of The Customer Experience Magazine.

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Case study: Kirklees Active Leisure (KAL) – pursuing customer excellence in a challenging environment

Managing 2.85 million customers in an increasing competitively environment whilst adapting to a backdrop of decreasing local authority budgets and funding is some juggling act that would leave a lot of organisations in deep water. Not KAL though– they are on the offensive and are pursuing both customer excellence and innovation to deal with the coming challenges.

KAL logo

About KAL

KAL manage 12 major sports centres and swimming pools on behalf of Kirklees Council in the region. They are organised as a charitable trust and so all profits are reinvested into facilities, their ongoing development and growth initiatives to bridge their funding gaps following their approach of ‘invest to save, invest to grow’. As an organisation they are managed by a Board of Trustees who come from a range of backgrounds to help develop and drive the strategic direction of the Trust.

In March 2013 they exceeded 2.85 million customers, tracking way ahead of their 2014 business strategy target of 3 million customers. All this despite a challenging financial landscape. Turnover for the last financial year was £12.8,m up from £8.5 in 2007/8, despite a cut in funding from local authority of 32% over the last 3 years. Currently for each person that visits a centre, the council pays roughly 59 pence per head. 5 years ago it was £1.

As if these challenges weren’t enough to content with, the competitive landscape for Health and Fitness is about to change significantly in Huddersfield alone.

The competitive landscape for health and fitness

Budget gyms are now the ‘new kid on the block’ with two new planned openings in Huddersfield town centre alone by DW and Exercise for Less in the next 12 months. KAL have already hit back by developing their own ‘Smart Fitness’ package for £14.95 per month which has already attracted over 12,000 members. In addition KAL have their own brand new site development at a cost of £35 million due to open mid-2015. However the competition doesn’t end there though. The University of Huddersfield has approval to build a £22.5 million brand new leisure facility and will open the doors up the general public in addition to the student community in spring 2014.

This is all in addition to a number of smaller gyms and facilities in the Kirklees area. One such facility was the Fitness First gym at Lockwood Park, where Huddersfield’s Rugby Union team are based. After getting into financial difficulty last year which also threatened the sustainability of the rugby club, KAL agreed to take on the facility with its member base and majority of staff. After an initial refurbishment it was rebranded and officially opened in January 2013. Kirklees has certainly has its fair share of leisure facilities!

Customer experience is key

So with expanding competition and customer membership, and with products broadly similar in nature and in price, customer service is increasingly going to be a key differentiator in helping KAL stay ahead. Gym shop

This was first recognised back in 2011. The Commercial Board had been informed of the 32% cut in budget over the next 3 years and so had a funding gap to fill. The outcome was the ‘Big 8’ ideas to boost revenue, innovation, diversification and customer experience.

 Mystery shopping to diversify

Once such idea was to introduce mystery shopping but with parallel aims. The first, as you would expect from deploying a mystery shopping programme was to improve customer retention, raise service standards across all 12 facilities and to be able to audit processes for consistency such as the fitness suite visit experience and the membership sales process. The second aim, was to retail the system on to other businesses to use, and so generate additional income.

KAL’s approach was to go to the market initially and purchase an ‘off the shelf’ mystery shopping programme. However they quickly realised that the cost would be prohibitive. Undeterred, they decided to commission their own web based system and so iiD Solutions was born. A subsidiary consultancy business offering insight, intelligence and delivery to other businesses across industry using the mystery shopping software platform for data collection and analysis, tried and tested on the KAL organisation. This approach saved KAL a significant amount of money. In fact the life time cost of the system is actually less than a year’s subscription to an existing commercial package. iid logo

Mystery shopping visits are conducted monthly across all sites using a team of shoppers. Site managers have access to the system via their own log on, and can check their own scores and results, their progress over time and how their site compares to the others in the group to inject some healthy competition into pushing standards higher. The managers can also look at specific areas within their facility such a reception area, pool area, or café to help further drill into identifying areas for improvement or praising staff for exceeding standards.

Monthly results are also reviewed by the Commercial Board in their strategy meetings and there’s an expectation as to a minimum target of achievement by the sites. The numbers tell a positive story. Average mystery shopping scores on product knowledge of staff are up 3% over the last 12 months and fitness suite visit experience is up to 84% demonstrating that the KAL teams are actively engaging and using the feedback from the shopping data.

Annual customer satisfaction focus

This is an additional source of data around understanding for improving the customer experience. The back bone of any customer experience programme is a customer satisfaction survey which KAL conduct annually. 2013 saw over 1600 responses across a robust representation of members across all 12 sites. Again, the numbers tell a positive story amidst the back drop of increasing competition and rising customer expectation, not to mention the increase in membership. Year on year scores are up with the biggest increases in ‘overall satisfaction of staff’ to 87.4 and ‘overall satisfaction of information provided’ to 81.1.

KAL also measure Net Promoter score and 2013 saw a 3% increases to 32%. Interestingly, the health and fitness industry average is around 22%.

Staff are key to the customer experience

Despite the increases in satisfaction around staff from this year’s satisfaction survey, KAL aren’t standing still on staff development recognising the importance of all staff in delivering a great customer experience. In April this year, KAL joined the Institute of Customer Service (ICS) which is 2 year programme they’ve committed to, underlying their seriousness at developing the total customer experience. KAL now have 5 of their own staff as approved ICS trainers and the plan is to rollout training to 80 people between September and December this year. Of those 80, 50 are front of house staff, sales and membership, who will each undergo the 3 day ‘First Impressions’ course, in addition 30 Front line and Operations Managers will undergo the 4 day Service Management course. From 2014, all remaining staff will undergo ICS training to ensure a consistent level of service across all facilities which should see them ahead of the competition in service delivery.

And to the future

2014 also sees the start of the next 5 year strategic planning cycle. KAL have now established a ‘setting the pace group’ to gather further ideas and promote employee engagement. To date they have also;

  • Established a set of KAL values
  • Conducted KAL roadshows across the 12 facilities
  • Created an “Active Thinkers” group to consider and improve key issues
  • Promoted an inclusive culture encouraged by Managers. Staff views are actively sought via staff councils, staff surveys and site visits.

 

All this will add to the solid foundation already established, and further promote their cultural change within the organisation to further deliver on their philosophy of ‘best of public, best of private’ approach to business with a clear link to improving the customer experience as a differentiator.

 

KAL’s summer marketing campaign focussed at getting more people into activity used the strapline around ‘imagine, believe, achieve’ Three values that I think KAL themselves use to drive the business into the future.

 

Thanks to Joe Baker, Business Improvement Manager at KAL for his input into the case study.

Article first written for the July 2013 edition of Customer Experience Magazine.