It’s the craze everyone is into, in nine out of 10 organisations, senior leadership teams are grappling with the challenge of trying to become more “service orientated” or “customer-centric”. They are embracing the customer agenda to improve profitability and to stand out from the competition in a world where product offerings and price no longer provide sufficient differentiation, a world where many traditional businesses are under threat and need to change. Customer experience is a future-proof strategy; however, you can’t win just by looking at the numbers or with a culture that doesn’t truly embrace the concept. You win by moving employees from loyalty to themselves, their own progress/metrics, their own micro-groups/silos to a position where there is loyalty to the business and the customer.
Focussed and High Performing Culture leads to better customer experience, hardly a new idea of course, however the devil is in the detail. In the process of becoming more “service orientated” or “customer centric” invariably an organisation will get to a point where it must address its culture. Mobilising a culture to be more “customer centric” often requires change and that’s a major challenge for all large organisations.
The concept of mobilising a culture and driving change when thinking about Customer Experience encourages us to ask a different set of questions about the way we manage the efforts-and therefore how we do Customer Experience. All of the evidence available about high performing organisations indicates that the power of a brand to excite and achieve loyalty and preference with customers’ demands the engagement of culture internally to deliver the promise consistently. One company that gets that Customer Experience and the employee experience go hand in hand and executes based on this thinking is Australian Technology Company iiNet. iiNet is a customer-centric organisation that has used its focus on customer experience to grow to more than 2,000 staff today, while still retaining the culture and customer focus of a small business.
In 2007 iiNet, adopted the world renowned Net Promoter System (NPS), to help them to go head to head with their bigger Telco rivals. NPS helped unite the business, giving staff a tangible way to demonstrate their ability to deliver, whilst also helping everyone to identify areas to improve. Customer Experience is now central to the culture, so much so that the continuous improvement of Customer Experience is now worth one-third of all staff salaries, including the CEO’s. The call center is governed by the people. Customer verbatims good and bad are shared company wide and iiNet employees have a say in how they do things. From day one employees are actively encouraged to use their discretion and judgment in helping customers solve problems. In a recent interview with the Irish Times, CEO Michael Malone stated that “We require everyone we hire, from customer service staff to accountants to engineers, to have experience in hospitality. We don’t care if it is the local fish and chip shop, as long as they have some experience of dealing with people face to face”. As a result of their approach, Staff turnover rates are relatively low in comparison to industry standards with some iiNet call centres reporting below 1.5% in churn. 2013 was an exceptional year for iiNet’s share price performance, increasing 101% over the financial year, they also posted a 29% EBITDA (Earnings before interest, tax, depreciation and amortisation)
Customer Service/Experience failures happen, and when they do, your employees will reveal your true organisational focus. If it’s a “Profits or Products First” company culture, you will see through your customer feedback and related data that people make excuses, blame other functions or the customer, and they delay or fail to resolve problems. Take the example of the much publicised United Breaks Guitars story, where a musician complained to United Airlines about baggage handlers damaging his expensive guitar, only to then spend one year having to fight for his problem to be properly acknowledged (http://www.youtube.com/watch?v=5YGc4zOqozo).
Following the service mishap which starts the story, United Airlines took a defensive and sometimes adversarial tone, they attempted to justify their policy, when all was almost lost they then suggested that the service mishap was a merely anecdotal incident. In this incident United didn’t seek to immediately solve the problem, nor did they investigate or address the root cause of the complaint. The complaint went viral not just because of the creativity of the complaint but also because of United’s response which was manufactured and inhuman, an insight into its culture perhaps? Anyway we know that it started a massive fire in the accounts and cost United Airlines somewhere in the region of $180 million.
Highly successful brands know how to create powerful and compelling brand cultures which breed loyalty, performance, differentiation and sustainability. Culture brings people together and allows them to jointly cope with the challenges of business. Take the company Aggreko plc – the world’s largest temporary power generation company, and a
major supplier of temperature control equipment. Former CEO Rupert Soames talks regularly about the culture being the most powerful competitive tool he possessed whilst at Aggreko. In an Interview with Management Today in 2012 Soames speaks keenly about how he uses NPS, daily, weekly and monthly and focusses on stopping bonus-hungry line managers in far-flung places from squeezing the margins by reducing the high level of customer service. NPS is so important to the business and its culture that it’s on the front page of management accounts. Aggreko’s 6 monthly employee survey reveals that over 90% of Aggreko staff say they love working there, which the researcher Towers Perrin confirms is unusually high. Interestingly, the survey also reveals a very low tolerance of poor performance and a deep irritability with those Aggrekans who do not ‘pull their weight’. In its 2013 annual report, Aggreko announced, 17% compound growth in revenues and 24% compound growth in trading profit over ten years ––proof that a strategy focussed on customer experience and delivered through cultural change works.
As demonstrated in the case of United Airlines, not everyone is an iiNet, or Aggreko, in fact data suggests too many cultures just aren’t fit for purpose when it comes to being “service orientated” or “customer centric”. A 2014 study by Avaya suggests that a staggering, 81% of organisations have seen their Customer Experience Management initiatives fail in the last three years. . The creation of superior customer experiences – that is, tapping into your customers’ hearts and minds, and then delivering a relevant, consistent and convenient experience at every step – requires the engagement, skills and resources of your entire organisation. Too often the focus of Customer Experience is relegated to data, surveys and analysis, which somehow sells the value of Customer Experience but not the depth. The point is that to really change an organisation so that it is “service orientated” or “customer-centric” you’ve got to make some changes to the culture.
4 things to consider
- Leadership is vital: Realise that culture change and improvement takes commitment and time. What a leader focuses on, measures, rewards and controls is the main factor affecting culture. Learn Learn Learn: Try different interventions and consider the models and teachings of culture change experts (eg. Edgar Schein) when considering how you’ll influence and improve your culture.
- Fix how you solve problems: Your culture always helps or hinders problem solving, Problem solving is one the first signs of how customer focussed your culture is, Consider customer verbatims a gift……No problem is a problem; it’s an opportunity to improve. Leaders need to focus attention on the big problems via root cause analysis then they need to be actively engaged to help find solutions.
- Demonstrate that you value your employees. Demonstrate to them that their opinions are taken on board, develop their understanding and Provide employees with the opportunity to give honest feedback, iiNet uses eNPS which is officially tracked by a third party, and is anonymous to help them do this successfully. Don’t just rely on gut feel or hearsay about why your people are happy or disgruntled, you need to know, then do something about it
- Process is key.to effective culture and customer experience management so don’t forget it when you’re thinking about action. Be wary of the illusion of engagement: When someone seems to get the agenda and the need but slows things down when it comes to action. Commonly you will see people slowing things down or challenging the agenda with cry’s for more data or suggestions resources are stretched,
Ebenezer Banful is a Customer Experience Practitioner interested in shaping how organisations interact with their customers and their people. He has a passion for understanding business strategy and customer needs gained from running an organisation wide customer experience programme. Currently he is working to change and unite an iconic organisation around the customer view using NPS (Net Promoter Score).