Tag Archives: Customer Management

customer experience, innovation, Multi-channel, sales

What’s the difference between sales and service? Nothing.

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Call centreWhen a customer expresses a need, then a failure to sell to that need is a failure of service. Thinking about sales as a service opens the door to genuine alignment of customer experience.

A long time ago, I spoke to someone who helped set up the contact centre for a new retail bank.  He explained that the philosophy of this bank was different from any other than in operation in the UK. Its aim was to help customers and give them a good experience.

I was intrigued when he explained that for the contact centre this meant not distinguishing between sales and service. The same agents handled all customer queries, including selling new products to the customer .

“Surely,” I said, “this has to compromise the customer experience?  When I, as a customer, need help, if agents try to sell me stuff when I call I will get annoyed very quickly.”

“Not at all,” he said. “Our agents are bonused on customer retention and advocacy, not sales.”

I said, “So won’t that mean, instead, that your agents won’t sell to customers for fear of hacking them off? Won’t that damage your revenues?”

He smiled. “Just the opposite. We train our agents to understand that their role is to help customers with their needs as much as they can. Each customer who calls us needs help – or else they wouldn’t pick up the phone. Most of these needs we can help directly: make a payment, check a transaction and so forth. But sometimes a customer’s need can only be helped with a new product.

“For example,” he continued, “a customer might want a better return on the surplus money sitting in their zero-interest current account. The best way we can help them is to explain the kinds of additional services we can offer such as savings accounts, bonds or ISAs. We then give them a chance to buy.

“If we don’t have this sales conversation, we will have had a customer with a need and we have not helped. That failure to sell is a failure of service.”

This philosophy seems to have worked. From its founding, this bank has balanced solid customer and revenue growth with a reputation as the UK bank with the most satisfied customers.

This principle seems to me to lie at the heart of the term ‘customer-centric’.  It connects sales and service with the same goal: helping the customer.

It means that agents have to believe that what they are selling is of genuine value to the customer: as they have to service the customer afterwards, there is no incentive to sell them a pup. And it properly positions sales as part of a positive customer experience – which is as it should be.

For those of us who are striving in our organisations to make things better for customers, this story poses two challenges.

First, how is the way we sell genuinely part of a joined-up philosophy of customer service – or are sales ‘pushed’ on customers regardless of value?

As for the second challenge? Customers now have many more channels for service. These include email, chat, forums, web sites, mobile or social media.

This challenge, it seems to me, is not the technology. Nor is it the need to design for the interactions we might have with customers (and which customers might have with us) (and with each other).

It is instead to do with how well, when trying to give customers a consistent, seamless, multi-channel experience, we apply a key principle:

How do we make sure that every customer touch point adds value to the customer, helps them with their needs and, yes, sells to them as part of the service?

As my friend with his contact centre showed, if we can meet this challenge and begin with this principle, the results, for our customers, and for our business, can be phenomenal.

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complexity, customer experience

Stop complexity from killing the customer experience

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Complexity mazeComplexity kills good customer service. We can use the rule of 50/5  to cut through this complexity and  transform the customer experience.

I once worked for a multi-national technology company with a turnover of tens of billion of pounds. The organisation’s processes and systems were so complicated and intertwined that any improvement efforts were doomed, if not to failure, then to mediocrity.

Any new customer fix – a system, a process, a metric or a behaviour change – was just another complication in an already complicated environment. Sooner or later, those in the customer front line would make mistakes because complexity introduced by the new fix made errors more likely. Their normal tasks might often take longer, as the new fix might need new skills or new thinking. It might increase complaints, perhaps through teething problems, or because expectations for improved performance were too high.

In short, because corporate sclerosis was gumming up the customer experience veins, ‘improvements’ were likely to make things more error-prone, slower, less easy, and, almost certainly, substantially more expensive.

This is because of one of the infallible laws of business, something I was fortunate to learn early in my career, courtesy of George Elliott: complexity ALWAYS increases costs, and by much more than we think.

Paradoxically, however,  how complexity drives costs offers a powerful way to enable customer transformation. This is because (again as George explained in my youth) these costs always appear in the same way: they follow the rule of 50/5.

50% of your costs are associated with 5% of your activity, and vice versa.

In the almost one hundred companies with which I have worked, while some the precise numbers have varied a little, I have never seen this rule to be wrong. It is a cast iron law of business.

What’s brilliant about this principle is that it applies in so many ways. Here are some I have found useful:

  • 5% of customers account for 50% of service costs
  • 5% of customers account for 50% of revenues
  • 5% of our customer enquiries yield 50% of our sales
  • 50% of our people’s time is spent working on issues raised by 5% of our customers
  • 50% of escalations come from 5% of customers

For each one of these, the complementary statement is also true: as well as 5% of customers causing 50% of service costs, so 50% of customers cause only 5% of service costs.

Why is this important? Because it means we have a practical way to focus our improvement efforts to deliver effective transformation, reduce complexity and make things genuinely better.

So for one tech company for which I worked, we found that 3% of escalations were consuming 38% of engineer time. We identified and eliminated the causes of almost all these escalations. This enabled the organisation to free up a quarter of their engineers to work on proactive services,  adding value to their customers. At the same time they kept some engineer capacity in reserve to handle the many fewer new escalations which inevitably would still arise.

For another company, recognising that 4.5% of their customers yielded 53% of their revenues drove them to offer premium services to these customers – increasing revenues and retention.

At the same time, they reduced services to the 48% of customers who contributed only 4.9% of revenues, but offered them the chance to upgrade. Result? Some of these unprofitable customers left, some stayed, but cost less to serve – but enough upgraded to make this customer segment twice as profitable.

This thinking works.

But beware. Standard accounting cost models don’t give you a true picture of these costs (because they assign overhead costs uniformly across the board as opposed to how the costs are actually being consumed) .

So let’s begin using the rule of 50/5, but not by looking at budgets and costs on a spreadsheet. Let’s get out from behind our desks to see what is really happening. Let’s look, not at the cost numbers, but where our people are putting in the work with our customers. We’ll soon see where the rule of 50/5 works in our business, and how we can use it to cut through complexity to make things better for our customers.