HR directors take note: if you see Jo Causon mingling with your front-line staff, she probably has more than a passing interest in how they deal with her. She has just taken over as CEO of the Institute of Customer Service (ICS) and if there is one thing she likes it is having tea.
"I've been in a lot of hotels recently," she tells HR magazine as she marks her first month in the job. "In one I was amazed when the attendant spotted I'd taken a call and, to prevent my tea becoming stewed, waited until I had finished before bringing it out. That was great customer service. In another, however, I was disappointed when I asked to have my tea outside, but was told I could not."
Causon's tale of two teas is an apt metaphor of British business right now. For some, it seems, good service is the be-all and end-all; for others it is still perceived as a nuisance, demanded by pushy, punctilious customers. In the annual customer service phone test conducted by BBC 1's Watchdog programme in May, for instance, one caller to BT had to wait 24 minutes and 47 seconds before reaching a real human being (see box, right), and Causon thinks it is unacceptable. In fact if she gets her way, service is one of the few, quick-fix solutions she thinks companies have for hauling themselves out of recession - something that directly involves HR re-analysing how they train their people. "The customer has always been important," she says, "and now is not the time to be mediocre. Service has been seen as soft; now it's absolutely clear that it links to engagement, productivity and bottom-line profit."
According to ICS research - which runs a six-monthly Customer Service Index (the latest one is published this month) - those companies with an index score of 80% or higher (defined as 'world class'), have a 24% higher net profit margin than same sector rivals of lower standing, and can achieve 71% more profit per employee. "Service directly impacts company performance," she adds. "If HR feels isolated from business issues, this is one area it has complete opportunity to improve."
The scale of the task facing HR is sobering; almost every measure of service shows complaints are on the rise. In April the Office of Rail Regulation revealed a 7.2% rise in complaints to 54 in every 100,000 journeys. Service quality attracted the most grievances, accounting for 35% of all of them. Particularly bad for service was Virgin West Coast, with 455 complaints per 100,000 during the third quarter of 2008 and National Express East Coast with 233 per 100,000 - a rise of a fifth over the past 12 months. "All areas of the economy suffer from bad service," says Causon, "but we found local government in particular was poor - rated 63 on our index, well below the average of 72.
According to Mark Bradley, author of Inconvenience Stores, an account of a year spent sampling service, HR professionals and, by default, staff are failing to "aspire to anything beyond 'satisfaction'". He says: "HR says it must create customer satisfaction but hardly any look for 'customer delight'. The fact is there is no correlation between simple satisfaction and repeat business. 'Satisfaction' is not good enough. HR must go beyond this."
Customer-centricity arguably begins with recruitment. Sandwich retailer Pret A Manger, for example, requires applicants to work one day in its stores, and then asks existing staff which candidate should be hired based on the service they give. And more companies are using recruitment psychometrics. Provider Taleo reports increasing numbers of retailers are more serious about using psychometric tests in their hiring. "Companies don't often know the service levels they should aim for, but personality, judgment and situational tests can help them set what they want for new recruits," says Nathan Mondrago, its senior organisational psychologist. "The difference it can make is enormous," he adds. "One customer achieved a $13,000 difference in revenue per salesperson when they hired high scoring individuals, compared with low scoring ones."
But while recruitment is important, Causon says re-arming existing customer-facing and back-office staff with the right skills is the most immediate HR worry. "Service is not just about the front line, it's an ethos," she points out. "It's the whole of a company's culture."
To underline this, Causon announced details of a new ICS initiative - Service Mark - a sort of Investors in People kitemark in customer service firms can be assessed on. Trials began in January, and the first to earn the mark was RBS last month - perhaps the only good news this bank has had of late.
"The mark comprises three parts - a survey of staff to gauge just how customer-focused they are; a survey of that firm's customers, and finally an assessment of both of these to get a measure of how customer-focused procedures and structures are," says Causon. "Those earning the mark will have to prove continuous performance. In parallel, we run our own training in customer service for individuals - national occupational standards in customer service. My dream is that someone bearing this qualification will be seen by the HR department as worth hiring, and that the Service Mark will be something HR strives to attain because customers regard it as an important part of their buying decision."
The good news is that customer service - perhaps because of the recession - could be at a turning point. January 2009's ICS index showed a rise of 1, up from 71 to 72. But Causon says we can't rejoice yet. "It's not good enough. Companies need to be moving their scores to the 80-mark. The lowest scoring of our top 10 companies - headed by John Lewis at 88 - is 83. Good customer service is not linked to the size of an organisation, but its ethos, and HR needs to be engaged in the topic."
One of Causon's missions is for HR professionals to make a commitment to tackling retention in call centres. She believes call-centre scripting not only dehumanises service delivery, but contributes to complaints and makes call-centre staff's own lives miserable.
Kristian Bromley, head of customer services at gadget e-tailer Firebox.com and winner of many customer services awards, thinks the answer is easy. "We don't give staff scripts. We give them a free rein to deal with people as they see fit; we recruit for common sense and trust." According to Bromley, agents are empowered to complete a call themselves, without passing it to a higher authority. This happens in 90%-95% of cases. Each operative gets two weeks' customer service training, and every time a new range of gadgets comes in, staff actually play with them so they know what they are talking about. The success of this approach is evident. The company sends out a 'net promoter' score request with each delivery, which asks consumers to rate the service they get. Not only does Bromley gain a 30%-50% response rate, consumers routinely rate the company at around 70%.
The message about scripting is slowly getting through. In 2006 Lloyds, whose 4,000 staff handle around 70 million calls per year, abandoned scripts after it found 90% of customers said they were annoying and 55% felt it meant operatives didn't listen.
The banking sector is one industry that knows it needs to improve. Complaints by customers to the Financial Ombudsman Service increased by 30% last year and the FSA reacted by announcing it would consider publishing a banking customer service league table, including the number of complaints each receives. Although the move was criticised by the British Bankers Association, it has won backing by the National Consumer Council.
Causon wants more companies to follow Lloyds' example. Another bank currently on this path is Citibank which, since 2007, has improved its customer satisfaction rating by 22% in North America, from working with customer experience management consultancy Empathica. The project has been so successful the bank is rolling out the project in the UK this year and to 12 other countries. "All companies have processes that constrain their people," says Causon. "These are not always intentional but HR needs to find out what they are and eradicate them. How often, for example, do managers go on to the floor and listen to what customers say, or learn about the environment in which their staff have to work?" she asks. "This is what has to change."
WHO'S WHO IN CUSTOMER SERVICE?
- Five of the best
1. April 2009 - Apple beats HP, Dell, Compaq and Gateway in Forrester Poll of computer brand customers are most happy to deal with
2. April 2009 - Cathay Pacific wins SKYTRAX Airline of the Year award based on customer feedback surveys
3. February 2009 - O2 tops customer service in the JD Power and Associates' fixed and mobile broadband internet service providers league table 2008. It achieves a score of 767 out of 1,000. Sky (706) and Virgin Media (672) come in second and third
4. February 2008 - Croydon Council wins nationwide mystery shopper poll with best customer service for knowledge, friendliness and speed of response
5. April 2008 - Call Centre Focus magazine ranks First Direct as the UK's top call centre for customer service
- Five hit rock bottom
1. May 2009 - BT is ranked worst home phone company in Britain after a uSwitch survey among 12,000 consumers found 25% were dissatisfied with its service
2. March 2009 - Heathrow Terminal 1 is the UK's worst airport for customer experience according to Which? magazine. It achieved customer satisfaction score of just 31%
3. January 2009 - The Daily Mail's Money Mail readers vote BT as having the worst customer service of 118 UK companies, with 27% of votes. Second is Abbey, followed by Virgin Media, Nationwide and British Gas
4. January 2008 - JD Sports is voted worst UK retailer for customer service according to a Which? poll of 10,000 shoppers. It was followed by rival JJB Sports
5. July 2007 - uSwitch customer poll ranks Orange worst of the broadband providers, followed by TalkTalk: 35% of Orange customers are dissatisfied
Windscreen repair company Autoglass appears in the ICS's top 10 UK firms for customer service. Of its 2,200 staff some 1,800 are directly customer-facing. HR director Carol Madeley says: "For recruitment we've built online psychometric tests so we hire people with the right service traits. But service goes much further than this, it is ingrained in the company ethos. All of our staff are on some sort of bonus plan, and every plan has a customer service metric applied to it." Madeley recently brought the best and worst performing managers for customer service together for a workshop, so that those struggling could learn from the best. "We've also just finished a pilot for using net promoter scores to measure service," she says. "The full roll-out of this started in June and technicians will receive individual feedback."
Up until the end of 2008, Michelle Gloder (pictured above) was general manager, customer experience, for high-street retailer Comet. She is now head of after -sales services at Best Buy, but it was while she was at Comet that she was the driving force behind a major customer experience improvement project:
"Research we did in 2005 told us customers had a fairly low expectation of customer experience generally. We needed to increase trust in the company brand, and to do this we needed to work with our people. The starting point was to have the whole company pointing in the same direction, with its vision and values, so we created a customer experience statement. It covered physical and emotional pointers about how we need to behave externally. This was introduced in 2005. In parallel with this we launched a product knowledge-training programme and defined our 'customer journey'.
"Obviously, we had mystery shoppers, fortnightly customer surveys and daily feedback on our call centres," says Gloder. "Performance measures are now incorporated into everyone's job. In home delivery, staff get a call every day to ask how well they have done. In 2008, Comet's 'customer commitment' was launched, where delivery staff phone customers to tell them when they are arriving. Every time we launched a new programme, we saw a rise in engagement."