1. The Institute of Customer Service
“The Future is Customer Service”
Paul Cooper, Director
Institute of Customer Service Oct 2005

2. Institute of Customer Service
1. An Introduction to the ICS

3. Foundation and Development of ICS
Incorporated February 1997
Not-for-profit organisation
Organisational and Individual Membership
Strategy determined by Members
Comprehensive Regional structure
Extensive networking: National and Regional level
Sets national standards in UK for Customer Service
Carries out major research projects, surveys etc
Awards, qualifications, accreditation programmes
Numerous market initiatives
Regular publications and newsletters plus website
Strong media presence and reputation

4. What Does ICS Stand For?
Leading customer service performance and professionalism
Membership open to anyone with a genuine interest in learning more about customer service and putting this into practice
Market-led, involving all areas of private and public sector
Backed by nearly 300 leading UK Organisational and over 5000 Individual Members who recognise the key importance of customer service

5. ICS Understands People make the difference in customer service
These people need role clarity, skills, effectiveness, motivation, recognition, and development opportunities
ICS provides a framework to set standards; help
develop competencies and professionalism;
change mindsets and cultures; give an enhanced
sense of purpose; give support and develop
discretionary effort

6. to Learning & Achievement in Customer Service
Individual Membership Framework
ICS Passport
to Learning & Achievement in Customer Service
Bronze
ICS Communications
Award
Gold
ICS Innovations Award
Designation
PMICS
Silver
ICS Solutions

7. Understanding the ‘Big Picture’ You and Your Customer
You and Your Colleagues
You and Your Organisation
You and Your Development

8. ICS Initiatives Comprehensive networking and study tour framework
Breakthrough Research projects
Case studies, articles, references and website links
Professional Qualifications/Membership for all staff
National Customer Service Week
Sponsorship of National Customer Service Awards, National Business Awards, European Call Centre Awards
National Customer Complaints Culture/Reputations Surveys
Comprehensive websites, inc large Members Only area
Involvement in all major customer service/Call Centre/ CRM shows and exhibitions – international, national and regional
Speakers at numerous conferences and seminars worldwide
Annual ICS National Conference in UK
customerfirst and other publications
BPIR Research website link

9. Membership Categories
Individuals
Student
Foundation
Bronze
Silver
Gold
Assessor
Developer
Management
Companion
Organisations
Council
Corporate
Business
Associate
Regional – for SMEs
International

10. Institute of Customer Service
2. The Market

11. Why Bother With Customer Service?
Primary reason for Customer Defection to Competitors
source - Griffin Business Network 3

12. What’s Going On Out There?
Customers – Public Sector, B2B & B2C:
Rising expectations, less tolerance, less differential
Greater sense of importance and power
Growing affluence
Market:
More choice of products, services and delivery routes
Increasingly service economy – only 20% “make things”
Severe skills shortages in both applicants AND existing staff – see Employment Skills Survey 2002 (DfES)
Realisation that these ARE skills
Strong desire for qualifications/professionalism
Technology available
CULTURE CHANGE ISSUE – MANY ORGANISATIONS
AND INDIVIDUALS NEED HELP GETTING THERE

13. Acting on the Same Stage
“Old borderlines are evaporating, old categories are merging. The divisions between commercial, public-sector and non-profit organisations are becoming blurred. All organisations now act on the same stage, and need to justify their place on that stage.” - The Big Idea – Robert Jones

14. What do customers really want
Efficient service
To be treated as a human being, not a problem
To get clear and accurate information when they want it, and how they want it
To speak to a human being when needed
To communicate with someone who knows what they are talking about, and with authority to resolve the issue
Kept promises
To have easy access to all of the above
SAME ANYWHERE IN THE WORLD

15. Yes.. But... Innovation Excitement Access to YOU and your team
These have to be a GIVEN nowadays!
To impress customers in the future:
Innovation
Excitement
Access to YOU and your team
GREAT Customer Service
GREAT recovery when you screw up
Empowerment of your people
Understanding and Caring about ME

16. Where are we today? “Nearly half of all FTSE companies
don’t have robust and single view of
their customers”- Source: Detica, 2003

17. Scary
“We’ve got 7m customers and 10m policies. When I first looked a this you wouldn’t believe how long it took me to find this out” – Matt Gouldstone – Prudential Insurance

18. Is customer information worth having?
“People aren’t generally reliable
predictors of their own long-term
purchasing behaviour for any type of
good, new or old, durable or not”
Source: Andrea Ovans (based on 65,000 consumers) citied in IMC: The Next Generation (2003) by Don & Heide Schultz
“Customers are most sincere when spending rather than talking”
Source: Akio Nishikawa (1989)

19. Institute of Customer Service
3. Latest Research

20. ICS Research Results
In the UK today, very few people rate their experience of customer service as excellent - due to poor attitude and training Source: Mori/ICS report
Customer demands are rising fast and this will continue, and accelerate Source: Bain & Co/ICS report
Complaints culture is developing faster with customers than organisations Source: TMI/ICS National Customer Complaints Culture Survey 2001
Much more rounded and trained professional individuals are required in front-line customer service roles Source: Colin Armistead/ ICS report 2001
Major feature of good reputation is good complaint handling Source: Bob Johnston/Reputations ICS Report 2001

21. Reputations Research Conclusions I
Reputation is a financial asset
Reputation is a magnet which attracts customers, employees and investors
Reputation increases customer tolerance
Reputation increases customer loyalty
“The creation, maintenance and defence of a company’s reputation is its most important task” – Lord Bell 2000

22. Research Conclusions II
Reputation is driven by Organisational Values
“Many banks offer some or all of what we do, except for one thing. The only difference that can’t be copied is the way we do things around here.”
– Alan Hughes, CEO, First Direct

23. Research Conclusions III
Does it make a difference financially?
High Service Reputation = superior financial performance across a range of measures – profitability, profit per employee, net margins, ROA, etc
Usually they utilise more people and larger asset investment - this is NOT driven by cost culture

24. Research Conclusions IV

25. Reputations Research Conclusions
Four characteristics of Service Excellence
(by frequency of mention):
13% - They go the extra mile
14% - They make it personal
25% - They deliver the promise
48% - They deal with complaints and queries brilliantly

26. Key Components in Achieving the Right Culture

27. Loyalty - Airlines Slope: 0.18% Intercept: -6% R2: 0.68
Note: AMR purchased TWA in in 99. Used historical TWA CAGR for 00 and AMR CAGR for 00-02

28. Loyalty - Credit Cards
Slope: 0.64% Intercept: 0.17 R2: 0.40

29. Loyalty - Life Insurance
Slope: 0.10% Intercept: 2% R2: 0.49

30. The Key Question to Answer
“How likely is it that you would
recommend this company to a
friend, colleague or relative?
- Fred Reichheld, Bain & Co, Harvard
Business School

31. Sales and Customer Service
“We still get, and keep, more new business through word of mouth than through our sales team”
– Brian Hadfield, ex-CEO Unisys

32. BRAND REPUTATION - Marketing and Customer Service
Historically, PRODUCT key brand issue – Coca Cola, Kelloggs, Mercedes, B & O, Heinz
Great branding has led to good reputation – real or perceived – Marketing rules!
However, brand names now depend more on SERVICE EXCELLENCE – Singapore Airlines First Direct, Tesco, Starbucks, Prêt a Manger
Customer service professionals therefore will be the BRAND GUARDIANS of the future
CUSTOMER SERVICE RULES!!!

33. 2004 ICS/TMI National Complaints Culture Survey

34. Institute of Customer Service
4. The Importance of People

35. The Future is (Still) Customer Service
“The most successful organisations have one thing in common – the importance they place on their people. Our competition may offer the same services, but it can’t offer the same people.”
- Capita Property Consultancy Brochure
People
Processes
Technology
LOYAL customers! 4

36. Here’s the Paradox Customers must come first - in THINKING
Customers must come second - in ACTIONS

37. Why customers second?....
Fail if not right within organisation staff & processes
Increased customer expectation before improve employee morale, reduced turnover, etc = disaster
Staff know problems before customers
Can’t just edict that you are now customer focused - need people!

38. Quote “If you wonder what getting and
keeping the right employees has to
do with getting and keeping the right
customers, the answer is everything.” – Fred Reichheld

39. Employees are the Key “In an average year, we spend 30 minutes
interfacing with a customer, but 1600 hours
interfacing with our staff” – Nick Fowler HBOS

40. Inside v Outside Help Listening to staff is critical because…
They care
They are involved and concerned
They use same processes – test track
They are often your customer as well
One needs beacons not lighthouses
Consider:
Suggestions schemes/feedback/focus groups/
forums/authority to change/tell everyone

41. Major R & R Research Conclusions
Organisations with the best customer
service:
Make extensive use of performance related pay and team based reward & recognition
Emphasise career development of staff and work life balance issues

42. Other Major Findings In organisations with the best customer service:
Few differences between reward and benefits policies for managers & staff
Contingent pay more likely to be based on customer satisfaction and service quality rather than productivity
High levels of employee satisfaction

43. Salary is important Satisfaction with pay is highest when
employees have:
High levels of commitment
Feel proud
Belonging
Intent to stay
Strong sense of attachment
“Pay practices should be internally
equitable and externally competitive”

44. But, salary is not enough
Employees want:
Greater freedom and autonomy
Responsibility – to be more involved
Recognition
Praise
Achievement
Trust
Personal growth - ongoing learning and development, career
“Satisfaction with pay is dependent on satisfaction with all other factors”

45. The Service Value Profit Chain
Organisations who fairly treat, value, respect and
support their staff
=Staff satisfied with pay, recognition, involvement
= Staff with high commitment to the organisation
= High quality customer service
= Reputation
= Profit

46. Institute of Customer Service
5. The Key Issues

47. Today’s key issues Outsourcing, offshoring, global sourcing
New technology – R not M
Legacy
Attacking preventable demand
People – recruitment/retention
Customer resistance
Customer Self-help
Customer Service, not cost cutting
Consistency

48. Case Study - BA Millions of fare types 72 selling classes 7 cabins
15 types of passenger
10 ways to pay
9 check-ins
12000 staff to translate this to sense
6bn combinations
6 major databases
30% re-work
Now self-help – same answers to same questions –
14m less calls a year

49. Six Things to Think About
Employees may be more important than customers
People turnover in most organisations is the biggest single drain on resource, knowledge and finances
Last year, large organisations spent ten times more investment money on technology than on their people
Nearly 70% of all CRM programmes today aren’t working to the customers’ satisfaction
Staff Training & Recognition were poorest rated factors in TMI/ICS 2000/01/03/04 NCC Surveys
80% sales budgets spent on new business, 20%
on existing customers

50. “Good customer service is cheaper than bad!”
Quote
“Good customer service is
cheaper than bad!”
- Sally Gronow – Welsh Water

51. What does she mean? Eliminating mistakes and rework
Cutting out unnecessary steps
Only measuring things that make a difference
Communicating effectively
Improving knowledge and learning
Learning & improving from staff feedback
Technology where useful
Learning from complaints
Maximising empowerment
Increasing customer, and staff retention

52. Consequences of Failure
High cost of rework
Soul destroying
Self esteem
High turnover
Cost implications
Lost budget opportunities to do right things
Might be YOUR mother
Reputation – media interest
Letting down colleagues

53. Missing Out Women Retired Silver Surfers Older Professionals Disabled
Kids Skills
Web
Revolution and Earthquakes speed evolution
Public Sector Performance
Outsourcing and Consultancy – HP $18bn for PWC
Brand Message

54. The Service Enigma
“The best it can ever be is as good as what it should have been before it went wrong”
– Bob Sloper BT

55. Institute of Customer Service
6. Conclusions

56. What REALLY gets the results?
Long term commitment from the top
Great recruitment practices/induction
Strong Customer Focussed/Loyalty culture +
Great supporting technology
Formal recognition/accreditation
Integrated Sales/Marketing/CS stance +
Measuring right things/feedback
Empowerment
Welcoming complaints/handling well
Fair rewards and recognition EQUALS 18

57. The real reason for doing all this!!!
= MOTIVATION
= REPUTATION/PROFIT 19

58. + Other Benefits to All Organisations
Improved customer satisfaction/retention
Increased word-of mouth recommendations
Improvement in organisation’s prestige
Universally recognised for high quality service
Life-long Learning for all staff
High quality, happier workforce/lower turnover/easier recruitment
Support to quality programmes
Better basis for recognition/appraisal systems

59. You wouldn’t believe it!
Airline loyalty card
Credit card
Car Insurance
Mortgage
House Insurance
Private Medical
Mobile Phone
Internet Server
Closed TESSA
Bank Account
Car Dealer
Magazine Subscription
Utility supplier
Contact lenses

61. The Role of the ICS Service Leadership
- Breakthrough Committee Research Projects
Publications, Seminars and Conferences
Interface networking between all members
Study Tours, benchmarking opportunities, etc
Setting standards for Customer Service
Accreditation of Organisational Programmes
Developing an Awards and Membership Framework for Individuals 20