Pursuing customer excellence in a challenging economic environment…
Managing more than 2.85 million customers in an increasingly competitive environment, whilst adapting to a backdrop of decreasing local authority 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 manage 12 major sports centres and swimming pools on behalf of Kirklees Council in West Yorkshire. They are a charitable trust and so all profits are reinvested into the local facilities and services they provide. KAL’s ongoing development and growth initiatives to bridge their funding gaps follow 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 very challenging financial landscape. Turnover for the last financial year was £12.8m 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, five years ago it was over £1.
As if these challenges weren’t enough to contend 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 a new one planned to open in Huddersfield town centre, in the next 12 months, with another couple of operators also planning facilities in the area to open in 2014.
KAL have already hit back by developing their own ‘Smart Fitness’ package, priced at £14.95 per month, which has already attracted over 4,600 members. In addition, Kirklees Council are in the process of building a brand new leisure centre development at a cost of more than £35 million, due to open mid-2015, which will be managed by KAL. 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 Fitness First got into financial difficulty last year, 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. Huddersfield will certainly have more than 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.
This was first recognised back in 2011. KAL 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
One 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 initially to look to go to the market 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, “not-for-profit”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.
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 as a reception area, pool area, or changing rooms to help further drill into identifying areas for improvement or praising staff for exceeding standards.
Monthly results are also reviewed by KAL’s “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 the customer experience and how this can be improved. 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 customers 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 (NPS) and 2013 saw a 3% increase 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) to deliver a 2 year programme, 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 2013. Of those 80, 50 are front of house staff, sales and membership teams, who will each undergo the 3 day ‘First Impressions’ course. In addition 30 Frontline 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 move further ahead of the competition in terms of the quality of the customer experience and overall service delivery.
And to the future
2014 also sees the start of the next strategic planning cycle. KAL have now established a ‘setting the pace’ group of senior leaders across the organisation to gather further ideas, gain a sense of collective ownership in addressing the challenges ahead and to further promote employee engagement.
To date KAL have also;
- Established a set of KAL Values
- Conducted KAL Roadshows, held 6 monthly, with all KAL staff encouraged to attend
- 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 KAL themselves use to continue to positively drive the Charity into the future.
Thanks to Joe Baker, Business Improvement Manager at KAL for his input into the case study.
Richard Kimber is Director at The Customer Experience Coach Ltd and is passionate about helping organisations improve and transform their customer experience strategy to boost business performance and results.
With over 16 years commercial and customer facing experience including market research, six sigma and lean process improvement, Richard has worked with and
successfully helped companies ranging from blue chip organisations to housing associations and public sector bodies.
Connect with Richard by contacting him on 07769 294509 or email firstname.lastname@example.org or @ce_coach