Regulation & Communication

I read a really interesting book recently – “the undercover economist” by Tim Harford. In one chapter it discussed the concept of free markets and explained why regulation was generally a bad thing in any market. Seeing OffGen’s recent announcement to include QR codes on energy bills I can’t help but feel they’ve got into the detail and this level of control will ultimately stiffle innovation and competition.

The regulator (IMHO) should be protecting consumers requirements and the energy companies should be coming up with innovative, differentiated ways to meet these requirements in addition to adding their own unique value.

So, I thought I’d try and step up from the functional definition (put a QR code on a bill) and try and undertsand the real requirements.

There are three sets of stakeholders – The utility company, the regulator and the consumer.

The regulators requirements can broadly be stated as “treat the consumer fairly” – i.e. don’t do anything you wouldn’t like done to yourself and communicate effectively to ensure the consumer undertsands the service you are providing.

The companies requirements are equally straightforward, maximise my cost/income ratio, have a long term relationship where we can sell you other products and services and we want you to advocate our business to your friends.

So what are the consumers’ reuqirements?

First I want to understand what I’ve used and how much its costing  I want to do this whenever I like not just when you send me a bill.

Second I want to know if I could get more for my money

Third if you change something, I want to understand that change only to the point that I can say “I don’t need to worry about it”.

I received my gas an electric bill recently and my direct debit on gas was increasing from £76 to £96 per month and on electric  from £46 per month to £70. Those are big increases by anyones standards. My energy bill has just gone up by over £400 a year. The particular provider I use has won awards for the clarity of my bill, so I thought I’d find the “why” on subsequent pages.

The price changes were stated in BIG BOLD FONT along with the statement that said your energy usage has changed to the payment needs to go up.

Now, there are at least fourvariables here:

1. How much energy I use

2. The price of that energy

3. External factors, such as the weather

4. Whether previous readings were estimated or actual.

In order to meet my second requirement (if you change something, explain it so I don’t need to worry about it) is not met by the information on the bill – nor is it met by putting a QR code onto the bill that takes me to a comparison site.

What I need to see is my usage in the context of price changes and the environment, so look at changing both the way i use energy (maybe) and the provider if appropriate.

That segways nicely into another of my favorite topics, multi-channel engagement. I tend to avoid the word “Omni-channel” as I think it implies that you do the same thing across every channel, whereas, for me , multi-channel customer experience tells me that I can expect an engagement that uses lots of channels that complement each other.

Print is a useful medium. It has reflective properties that make it easier to read than a transmissive tablet screen. I can make notes on the piece on it that will persist regardless of how many years in the future i choose to retrieve them.

Web & Tablets are good at interactivity and exploration allowing me to look at things from different points of view.

Mobile is great for checking something quickly or carrying out a simple transaction.

.. Connecting these envrionments toegther creates a genuine multi-channel experience, so I can point my phone at my bill to pay it. Jump from the bill to the web to explore my usage and compare it with similar households and from my mobile I should be able to view and regulate my daily usage.. and Ideally tag all my devices so I can control them from same said mobile.

Some of this is being done today, but we are still away off from a truly connected experience across the full range of channels.

In summary, my opinion is that regulators should stick firmly to broad directional themes, otherwise it risks destroying the market – you only have to look at the impact of the target culture on the NHS to see how this can go wrong. Now we’ve all moved on a bit and talk about patient outcomes, leaving hospitals free to make sensible decisions on how care is best delivered.

This leaves providers free to innovate and differentiate themselves. Providers should then focus on how they can create the best customer experience using each channel for what it does best and using technohology to connect them together.

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Kill Bill Volume 1

One of my colleagues, Amanda, produced a blog last week about the governments plans to ask utility providers to include QR codes on bills, so we can all jump to a price comparison site and see if we are being ripped off. I promised I’d read through it and provide a technology perspective on what organisations should do to deal with the ever increasing complexity of information and channels that content has to be delivered through.

However I got sidetracked into thinking “why”.

My first thought, on reading Amanda’s blog was “wow, the worlds complicated today”. I grew up in the 1970’s  and there was the Gas Board that pumped gas into your home for X pence and the Electric Board who provided, yep you guessed it electricity for Y pence per kw/hour. I don’t think there were different residential tarrifs, I vaguely remember something called Economy 7, which encouraged you to use electricity at night but apart from that life was simple.

Then in the late ’80s we told Sid that our lives were far to simple and could he come along and complicate them for us.

Now, there is an array of energy providers, different tarrifs, incentives to sign-up because I can earn reward points of one type or another… that’s better isn’t it, consumer choice, all hail the free market.

Hmm, lets look at that for a second. These providers aren’t making their own Gas, it’s not like I’m buying a different product where one can claim to produce Gas that heats quicker and cooks better than the competition, they are all buying from the same wholesale market.

It’s not that one is more reliable in term of product delivery, said product comes into my home through the same infrastructure regardless of whose providing it.

So why have more than one company, to provide competition, for what, I only need you to do a four things… make sure I’ve got gas and electricity , make it as cheap as possible and if there is a problem with the infrastructure, get it fixed.

Maybe I’m missing the point, the energy companies want to sell us more stuff, so they value us as customers and presumably either subsidise their customer service from other operations to compete on price or cut the customer service to the bone and compete that way…

I just realised I had never even been on a comparison web site for energy, so just went through the process and found I can save £250 a year by switching to some company I’ve never heard of.. but where does that saving come from. Switching has to cost my current provider money, they need to get a final reading, send me a bill work out any money I owe them or they owe me, then hand the meter over to the new provider. It must cost the new provider money, they have to set me up as a customer setup a direct debit, send me a welcome pack. How is me switching creating any additional wealth for the UK economy?

Having gone through the switch site, there were a lot of choices of company and tarrif, some fixed for a period, some with exit fees, but how am I supposed to make a choice. At the end of the day, my only requirement is that it costs me as little money as possible – how am i supposed to know what energy prices are going to do over the next 12 months and therefore is a fixed rate or variable rate better – if i knew that I would be an energy speculator and rich enough not to care about my gas bill.

I would therefore argue that actually there is NO choice in the energy market, because if I can’t link the options presented to me to which best fits my one and only requirement then it is no better than having only one option.

Now, what I really want you to do, is tell me how to use energy better, automatically sense when I’ve left the house, because you know where I am via geo-location, you know when I’m coming home, detect when a tile has come off my roof and is blowing a draft in because you can see the change in energy usage that doesn’t fit into the overall pattern.

I’ll switch to the company that can offer me useful advice to help improve the way I use energy, regardless of whether there are QR codes on the bill

… Now I’ll go and write the blog I was supposed to write in the first place.

 

 

 

Dear Bank, I only want two things, look after my money and treat me as a customer

It’s been some time since I got around to writing anything, mainly because I seem to have spent the last four months getting on and off aeroplanes. All very exciting, Singapore, Chicago and most recently San Franciso. I’m currently sat in the station in Manchester Airport, reflecting that it will take me nearly as long to get from Heathrow to home in Yorkshire as it did to get from San Francisco to London.

A lot of the time has been spent looking into Financial Services and customer communications, particularly the relationship between switching to digital channels, dealing with legacy systems and the need organisations have to create a more compelling proposition, given the bad taste left after the series of recent financial crises and self inflicted humiliations.

Watching TV before I left for the US last week I decided that a lot of companies had given up and gone for the easy route of ignoring the problem and creating simple price based offers to woo customers back.

This created two issues for me. Firstly there were three adverts in quick succession for various current account cash back offers from different banks, each offering different percentages , the best around 5%. It left me thinking of the supermarket price wars you often see with Tesco and ASDA racing to the bottom now offering to be 10% cheaper than the competition. This sort of approach is fine for a commodity where you don’t care about customer service.

Indeed, if you are going to pursue a strategy of operational excellence, as the text books call it, aiming to be the lowest cost provider in your chosen market, implicitly you have to care about cost above everything else, even the customer.

I don’t mind this from my supermarket, I walk around it once a week, pick up my brand matched groceries, I don’t need customer service, I don’t even have to speak to someone I can happily pick my goods from the shelves, use the self service checkout and walk out not caring if the place was staffed by little green men (sorry and women). More importantly I can choose any time I like to shop somewhere else, I have no ties or loyalty to the company.

My bank, on the other hand, is not a supermarket and choosing to compete on price, rather than customer service and value seems short sighted.. or maybe it’s considered just to hard.

Secondly, once I had signed up for said cash back offer I was disappointed and confused. The advert said 1% cash back on my current account. Naively, I assumed this meant I got 1% cash for everything I spent on my debit card, not an unreasonable conclusion given the strap line of the advert. However there is a catch. The cash back offer only applies to selected retailers – of which there was a very limited selection, none of which I shop at. Furthermore there was bizarre part of the offer for cash back on spend at Tesco but it said this offer was not in conjunction with Tesco leading me to conclude the bank would have to analyse my transactions to provide the cash back.

Way to go bank on building trust, give me an offer that’s far less than in first appeared and then present part of it in a way that seems underhand.

That’s not the end of it, I also have a credit card with said bank, for which I get reward points every time I spend money so I now have a choice, spend on my credit card or my debit card and I’ve no idea which one will be better for any particular transaction.

This is where my frustration really lies. I think its pretty common knowledge that we only want two things from our banks:

  • Look after our money, don’t loose it, give it to yourselves in excessive bonuses as a pat on the back for rigging the interest rates, or squander it in some drug fuelled orgy – if there’s anyone i’ve not insulted in that list, please email me and I’ll add you
  • Treat me as a customer, not a series of products and give me meaningful relevant information, not another balance transfer offer when you know I have no other credit cards

So, my suggestion to the nations bankers is stop making more complex products, that’s what got you into trouble last time, focus on the two basics I really care about and maybe British Banking will again become an Industry we can be proud of.

I think my next blog will look at the subject of having a therapeutic rant on WordPress as I now feel completely refreshed and not jet lagged in the slightest – although I’m sure I’ll feel different at 5am when I get up to go to London again tomorrow.

Marketing science .. And a bit of archaeology.

Like most of my blogs they are prompted by random thoughts triggered off by events in life or meetings at work.

Today, we were discussing talent management and how we attract great people to work in customer communications or marketing disciplines, I suddenly linked the various things I have done in my life together. That might sound like a big leap, but read on and hopefully I will explain.

At school I was fascinated by stars and atoms, I thought both these “worlds” were magical, our natural senses are insufficient to understand them – and also no one subject told me everything I wanted to know.

For my first degree I studied astrophysics – which taught me all about starts (and atoms as well), it combined quantum mechanics, electromagnetism, fluid dynamics, cosmology, general relativity and many other topics.

I then came firmly back to earth and studied Archaeological Geophysics. Archaeology is a fascinating area, many of you probably have images of people scraping around in the dirt to find pieces of pot (I’m not talking about students and the lounge carpet, that’s the other sort of pot) . However archaeology is heavily populated by scientists, physicists, chemists, biologists, computer scientists and forensics to name a few. This disparate group of people come together to reveal amazing insights about our origins, combining their knowledge to identify outcomes none of them could have achieved individually.

That was when the light bulb went on. My original view of marketing was some sort of fluffy magic, combined with a bit of colouring in – probably much like many outsiders view of archaeology.

Marketing is the business equivalent of archaeology, it is probably the most multi-disciplinary function in any organisation – we have creative strategists, brand marketers, data scientists, software developers, psychologists and manufacturers of print and point of sale.

Just look at google and the technology behind its targeted advertising, both in terms of selecting what you see and also how revenue is generated from auctioning words and then all the peripherary technologies they use to learn more about you.

That’s what I like, the variety and combination of disciplines coming together to achieve really cool things none of them could do alone.

I interviewed someone a few weeks ago and asked him why he wanted to work in marketing and he replied “because its the area of business that will develop most of the next 10 years”. I think he is right , the explosion of digital channels, the opportunities presented by today’s computing power to analyse large amounts of data, the overwhelming amount of advertising we are each subjected to meaning that unless my message is really targeted you just won’t bother, make this one of the most challenging and exciting areas to be in.

So, having gone from thinking marketing was an art and therefore not worth the time of day I unashamedly say, whatever your area of interest, there will be an application in marketing, so come and join the marketing science department.

social media is for old people

For most customers I speak to one of the common themes is we must get into social media.

I feel a bit like the guy pointing at the Emperor whose got no clothes on . I don’t get it.

I imagine if we could travel back in time 50 years the equivalent conversation would have been we need to get into computing, then it was we must get into the internet.

We seem to go through periods where the conversation is dominated by the technology, not the actual point which is what we can do with technology.

writing this I’ve just been speaking to my teenage son and his friend. They have been away on a rowing course for the week. Thinking I was being cool I asked if they made any new friends “uh huh” – which I think is teenage for yes -was the reply so I asked if they were going to keep in contact on Facebook. .

We don’t use Facebook came back answer as if I’d asked if they played vinyl records . After probing a bit they use Skype to communicate, or game online together using the inbuilt communication tools in the game.

For us oldies who lost contact with school friends because there was no such thing as an email address or mobile number social media has been a great tool to connect us together again.

The younger generation however are already connected they don’t need it.
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I tend to work on the principle there are very few new ideas and if you want to understand something you just need to find the old example of which it is an evolution. service orientated architectures of 2012 are not that much different to remote procedure calls of 1960 that are not that much different from the concept of using specialised manufacturers to create components that are then exploited by a master assembler invented in the industrial revolution.

So what’s the old concept that social media is replacing?

The basic architecture of social media is a mechanism to connect with a group of people and then receive or share information. In the old world this may have been family gatherings, specialist clubs or societies or just going to the pub with a group of friends.

Social media however blurs the line between personal interactions and business interactions. I wouldn’t have dreamt of calling a customer service department in the middle of a pub conversation about whose is the better mobile phone but its acceptable and convenient to tweet my frustration at never having a signal on the M5 – yes you the largest network apparently, and expect a response.

This is probably the modern equivalent of writing a letter to the Times.

For a business, I suppose there are three main questions

– can they offer new products or services as a result of these new channels.
– can they serve their customers differently via these new channels
– can they understand and market to their customers differently

None of these feel like paradigm shifts. They are just old questions in a new context, with much larger data dimensions and much smaller time windows.

So, maybe the answer to social media is not to try and predict the future, but to review the past.

suprising service.

I was on the train from Leeds to London this morning (06.40) in case any one from East coast wants to look up and praise the guard)

I’m sure you have all heard the announcements when you get on the train – particularly at peak times,  explaining which tickets you can and can’t use.

almost every time I see the same scenario played out.

guard : sorry Sir/madam this ticket isn’t valid
passenger : displays incredulity, explains how the dog ate their reservation,  the machine gave them the wrong ticket, someone at the station,  whose name they can’t remember, said it was ok.
guard: I’m sorry.  The conditions are clear you need to buy a new ticket. .
The scenario then plays out to its only conclusion – the passenger buys a ticket,  with varying degrees of spluttering swear words etc.

As an aside, on one train I was on the affronted set of passengers said they would try and find their tickets and whilst the guard had gone off,  pulled the emergency stop and exited by the window on the doors between carriages.

Anyway that’s not the point of this story.

This morning,  the same situation arose, this guy had his ticket but not the reservation saying which train it was valid for. 

Rather than create a confrontation the guard asked for the fast ticket number – which he didn’t have,  so then called the booking line,  got them to look up the ticket number and confirm which train he was reserved on.  As it turns out he was on the wrong train and had to buy a new ticket.  However there was no fuss,  just acceptance.

I don’t know if this is new training or individual initiative but it reinforced an important philosophy I to often see broken. 
assume the customer is right.  even if they are wrong. 

often – when something goes wrong the first thing I hear is defensive – the customer changed their mind,  didn’t provide what we needed etc. This may be true but taking this stance closes or minds to looking at whether they might be right and stops us learning what we could do better.

so,  to all customer service staff , help desks etc.  start by assuming the customer is right – the experience is better , even if they turn out to be wrong and you’ll learn more in the process. 

It’s my process, not yours.

A lot of conversations I have been having recently seem to be fundamentally flawed.

On the one hand organisations are saying we want to be more customer centric, give the customer choice of how they engage with us, what information they want and when and how they want it,then in the next breath they are saying they want to drive customers to digital channels because it will be cheaper.

In my mind this approach is flawed for two reasons, firstly, putting customers at the heart of our organisations means offering them the products and services they want, in the way they want to interact with them – that means I choose the channels, if I want to.

Secondly, if one starts out with a mind set its about customer centricity and cost, I firmly believe that the customer will get lost along the way in favour of the generally more bonus friendly approach of saving a few million quid.

Oh and when I said two reasons I meant three (remember the Spanish Inquisition) – digital doesn’t mean cheaper and certainly doesn’t guarantee best lifetime value.

The organisations I see being successful today are the ones who have taken the brave decisions to tackle legacy issues in their businesses and focus on customer service and creating a truly multi channel organisation, where the experience I get is consistent and connected.

The ones I see struggling are those weighed down by history, taking a short term view of their future and focusing on cost reduction.

A well structured, multi channel customer service and engagement program will deliver the best lifetime value and create a sustainable organisation. This approach will also be seen by customers, making us stand out from the crowd and building trust the fundamental currency of all relationships, because we are easy to do business with and consistent in how we behave.

Having spent many years in IT, we’d often do workshops to build “our processes”, creating forms for this , gates for that – all important stuff, but only if it actually helps the customer do what they want.

All processes in all organisations are part of some larger process with the ultimate customer at either end of the process.

Lets take an example, my bank (who are one of the best I’ve dealt with, but still have their quirks). First a really good example. On Saturday I was exercising my credit card and found a voicemail on my phone from the bank. I hit redial the answering service knew who I was, asked me for some ID and verification details and then asked me to confirm various transactions to make sure they were carried out by me. This interjection was part of my shopping process and the bank sensibly interjected their bit of the process into my process – making it as quick and painless as possible.

On the contrary, I decided I needed a cheque book – which I’ve never had with my new account – i do most of my banking online, so logged on, clicked the link to order a cheque book and was presented with a page saying I had to call the telephone banking service. You’ve broken my process.

We talk a lot about channel preference, do I want to be an online customer, do I want to receive stuff by email, can you sell my data to someone else .. I just want to be a customer and do whatever I want, however I want it. If you don’t want to deal with that fine, I’ll go somewhere else. Moreover, my channel preference varies, depending on what I want to do.

Another way of looking at this is total process cost. When we optimise a process we tend to start with what we see as the beginning and finish with what we see as the end, to often we just push the cost outside these boundaries, we don’t actually optimise anything.

If we start considering the customer’s time as valuable then we might have a different perspective. For example, if I put an automated menu system in my call centre, there is probably a business case that said we can deal with calls quicker and so we need less people, happy days. However, as a customer the 10 seconds I used to spend speaking to a person to ascertain the right person to speak to is now replaced by a minute of button pressing moving the phone annoyingly between my hand and my ear – you have saved 10 seconds but the overall process cost has gone up by 50 seconds and I’m a less happy customer.

However it’s not all easy, customers are often apathetic, they don’t want to tell us their preferred means of communication, we have to consider the cost to serve, versus the value created.

I think my conclusion to this rant, if there is one, is start with what the customer wants and keep that at the centre of any transformation program.

What are your experiences? Who is good and who is bad? Do you think organisations have got to grips with what it means to be genuinely multi-channel ( as opposed to multiple channels)?

answers on a postcard, email, carrier pigeon, tweet, Facebook message, or whatever suits your process.