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The Institute of Customer Service

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Presentation on theme: "The Institute of Customer Service"— Presentation transcript:

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

60

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


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