SOCAP in Europe conference

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The Stupid Company How British businesses throw
away money by alienating consumers
SOCAP in Europe conference London, 2 October
2006 Philip Cullum
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The case for customer satisfaction
Satisfied Starbucks customers spend 3,000,
dissatisfied ones spend 200
Lifetime value of a satisfied BMW customer is
143,500
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Service rage

• Two-thirds of UK consumers think customer service
  has not improved in the last five years
• Top of mind issues and sectors
• Call centres, extended warranties, missed
  appointments, poor after-sales service, cold
  calling, automated services or being put on hold
• Financial services, telecoms, electrical
  retailers, garages

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Active consumers

• Consumer switching levels have risen by 52 since
  2000
• If 100 people have a bad experience, a retailer
  stands to lose between 32 and 36 current or
  potential customers
• We read about this young couple who had changed
  their mortgage provider. It made us realise we
  werent bound to the same provider forever.
• As far as I was concerned, the company I was
  with couldnt provide a reliable broadband
  service, so I went elsewhere.
• If you have experience of a good company you
  pass it on if you have experience of a bad
  company, you make people aware.

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The consequences consumer revenge

• Average company life expectancy is 12.5 years
• Just 21 years after the establishment of the FTSE
  100 share index, two-thirds of the original 100
  companies had fallen off the list.
• Chief executives on average stay in post for no
  more than about four years.
•  
• The average tenure for chief marketing officers
  is 22.9 months.

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Feeling what its like to be a customer

• Most people say theyd be happy to help companies
  improve if they thought anyone was listening, but
  that most of the time its easier to simply walk
  away.
• 70 per cent of consumers tell us that company
  bosses are out of touch, with no idea what its
  like to be a customer.
• NCC research over two years with 5,000 consumers

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5 ways companies get it wrong consumers views

• Inflated expectations and broken promises
• Sell sell sell
• Sneaky and dishonest
• Impersonal and robotic
• Incompetent and ineffectual

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1 Inflated expectations and broken promises

• The Stupid Company over-promises and
  under-delivers
• Hyping up products which fail to meet the promise
• Advertising setting false expectations
• Travel websites highlight the 1 bargains, and
  you go, you search for two hours and you then
  find its 60.

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1 Inflated expectations and broken promises
(contd)

• Selling a product, and then not having it in
  stock
• They take your money out of your account and
  then, on the internet this is, maybe five days
  later you get an e-mail saying that its not in
  stock anymore. But youre expecting it through
  that day perhaps when you get the e-mail, you
  know, so youre excited.
• Broken appointments
• You have to wait in for half a day, and then
  its just almost like you dont matter. They
  dont turn up, or they dont even ring to say
  theyre not coming.

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2 Sell sell sell

• The Stupid Company is obsessive about making a
  sale.
• All about the sale, with poor after care -
  especially electrical retailers
• Offering you the world when youre a potential
  customer and then treating you like crap when
  youre an existing customer.
• Trying to sell you more when you get in touch -
  especially financial services and mobile phones
• Theyre not happy with just the one product,
  they want to go into every single product under
  the sun.

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2 Sell sell sell (contd)

• Aggressive marketing intrusive and pushy
• Theyre constantly ringing you up, hassling you
  to buy this particular product, and theyre
  constantly sending you mail when you dont want
  it, even when youve asked.
• Chasing potential new customers rather looking
  after existing ones introductory offers
• If you go to a bank on lunchtime, and you want
  to pay something in, youre there with half of
  the world, and while youre standing in a queue,
  somebody is walking up and down, and looking at
  you, saying oh, Id better target you, do you
  want some of that? Do you want some of that?
• Ignoring potential markets
• Nut allergy sufferers, rail passengers,
  disadvantaged consumers

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3 Sneaky and dishonest

• The Stupid Company thinks it can succeed by
  misleading customers and being underhand and
  evasive.
• Deliberate mis-selling
• They dont explain the full price or options to
  you.
• Hidden costs and small print
• Theyre quick enough to write you letters saying
  only 19.99 or something a month and then at the
  very bottom when you read it all up youre paying
  an absolute fortune.
• Dragging their feet
• Insurance companies, with claims, they just
  delay and delay things.

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3 Sneaky and dishonest (contd)

• Passing the buck
• When you ring them up to complain because youve
  got a thing thats faulty and they say, oh its
  not us, its the warranty company.
• Junk mail
• Putting things in envelopes, making it look like
  its more important than it is
• Misleading advertising
• First Trust - fees free

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4 Impersonal and robotic

• The Stupid Company appears distant from consumers
  and deals with them in a clinical manner.
• Call centres/telephone systems
• I think just about everyone in the world hates
  call centres and this automated drivel.
• Helplines that take ages to actually get through
  in the first placeTheres select this number and
  dial one for this, and two for that. And then all
  you get is a recorded message at the end of it,
  going back to lack of human contact again.

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4 Impersonal and robotic (contd)

• Standardised letters
• Treating me as a number Making me listen to
  recorded messages or hold music. And sending
  standard letters when I write an individual
  enquiry about something specific.
• Employees script-based - disengaged, bored
• They wont deviate from the script, and go and
  answer the questions that you put to them.

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5 Incompetent and ineffectual

• The Stupid Company is slow moving, patronising
  and apparently incapable of getting the most
  basic tasks right.
• Confuse and patronise - especially electrical
  retailers, garages, financial services
• They baffle you with science.
• Not being treated like a human being, they make
  you angry as they make you feel slightly stupid
  because theyre talking to you like youre a
  child.
• Inefficient and poor follow-through
• Why write one letter when five to me will keep
  them even busier?
• They expect you to take a whole day off work to
  have something delivered.

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Getting smart the consumer agenda for action

• Provide continuity and ownership
• Show respect and honesty
• Give the personal touch
• Reward existing customers
• Provide aftercare

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1 Provide continuity and ownership

• Ensure the same member of staff deals with an
  individual customer from start to finish
• Get the employee to provide contact details so
  that it is easy to get directly in touch with him
  or her again.
•  
• The call centres, the person could give you
  their name and reference number for future
  calls.
•  
• Nice to have a stable workforce, nice to deal
  with the same people over X number of years
  rather than always finding theres somebody
  different because they left last week, and you
  wonder why. The same as its nice to have a
  workforce of varying ages and ethnic groups.

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2 Show respect and honesty

• Be straight about things like delivery times
• Explain complex things simply
•  
• Be realistic with times and targets. Not
  telling you well yeah you can have it, it will be
  delivered on this day and then two weeks later
  its still not there.
• Dont push them into a sale, let them make their
  own choice and give them help if they need it.
• Deliver on their promises and commitments.
• Talking to you like youre an adult.

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3 Give the personal touch

• Treat customers like individuals
• Encourage staff to show initiative
•  
• Get rid of automated call handling systems and
  let me speak to a real person.
• It puts a personal side to it, it makes you feel
  like youve got an arm round you, youre being
  looked after especially with technical stuff and
  complicated issues.
• You like to feel that customer service is, that
  youre like the only person that they ever deal
  with, that youre special.
• Sometimes if youre in a shop or something, just
  a simple hello or can I help you or something
  would do.

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4 Reward existing customers

• Provide incentives for customer loyalty
•  
• Acknowledge repeat business, so not this get
  them on board and then forget about them, which
  I think a lot of companies are guilty of.
• Probably where Im most loyal is where I get the
  most feedbackCar companies and flight companies
  are always particularly good They send you mail
  regularly to remind you what a fantastic purchase
  you made and how wonderful you are, and if
  theres anything they can do for you, and dont
  forget youre part of this car club or this
  flight club It makes you feel as if youve been
  valued.

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5 Provide aftercare

• Dont forget about customers after theyve bought
  something instead check they are still happy.
• Consumers can be remarkably forgiving if things
  are put right promptly. 
• Follow up calls are always nice, it shows that
  theyre not just going to deal with it and forget
  about it, follow up, make sure youre happy,
  which some companies do, but not many, not nearly
  enough.
• When you crash your car, a good insurance
  company will be phoning up to make sure youre
  okay, hows the car, hows it all going.

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Getting it right
I love Asda basically because everything is
cheap and its reasonable prices, plus I get all
my daughters clothes from there and again
theyre reasonable and the staff are very happy
to help you as well, and its a really nice
supermarket If you cant find anything theres
always someone around on the shop floor to help.
Julie who cuts my hair has restyled it exactly
as I asked and remembers everything Ive told her
in conversation from one visit to the next (about
8 weeks) so that we pick up where we left off. A
different generation but I think of her as a
friend. London Transport just sent me a
letter asking for my email address so they could
send targeted communications about my regular
journeys which I think is a really good idea.
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Treat your customer how you would like to be
treated if you were the customer.
p.cullum_at_ncc.org.uk www.ncc.org.uk