Opine Consulting » Simon Kirby

New utility customer service challenges

Simon Kirby — Thu, 11 Feb 2010 17:37:21 +0000

In a just world, everyone would love the new utilities like Google, Skype and Facebook. Reality isn’t like that because people expect great customer service. New utilities could meet that expectation. But they need a new approach to service management and design.

People have dreamed of omniscience –of “knowing everything” – since the start of history. Google brings it a big leap closer – free of charge – and gets eighty-million “Hate Google” search results for its trouble. “Hate Skype” gets an ungrateful 8.3 million and “Hate Facebook” a curmudgeonly 79 million results.

Existentially, customers may be hitting out at the utility’s reach and pervasiveness. But there’s another profoundly controllable reason. Customers are demanding a great service experience and that’s exactly what the new utilities struggle to provide when things go wrong.

Customer service asymmetry

The essence of the problem is the asymmetry between a massive customer base, low average revenue per user and therefore relatively tiny service resources. For example, the generally accepted cost of taking a single call in a contact centre is about 5 times bigger than Skype’s average annual revenue per user.

This is compounded by customers’ high service expectations and the technologically-intense nature of online propositions. The inherent risk in all of this is that a dark pool of customer angst, propagated across social networks, could undermine the sector, damaging its brands and putting a brake on monetising the user bases. Visually, this is the calculus of the problem:

The customer service meltdown which Google experienced with the launch of its Nexus One phone is a vivid example of this problem. See here.

The solution is to avoid customer problems, create elegant, effective self-service and then, intelligently, open up to customer contact.

Evading customer service?

Like tax, there’s a subtle but important difference between contact evasion and contact avoidance. Evasion lands you in jail and avoidance makes you more money. Utilities need to move away from strategies that evade customer service contact.

New utilities need to declare a zero-tolerance war on all forms of value-destroying customer problem. If a process causes customer issues it gets redesigned; if text causes confusion it gets re-written and if technology doesn’t work it, gets replaced.

Self-service needs to be elegant, highly usable and integrated with all the other service channels so that customers have a choice.

With these approaches embedded, it should be possible to reduce like-for-like service demand by 50% a year on a repeating basis.

Achieving that begins to provide the headroom to open up to customers intelligently and without “drinking from the fire hydrant”. Initially, this could be through premium service offerings, call back or intelligent click-to-chat utilities that match service demand to capacity.

Ultimately, the goal should be to make brilliant basic customer service available to everyone.

Fat is a capitalist issue

Simon Kirby — Sun, 07 Feb 2010 01:03:16 +0000

In the rich world, we’re unlikely to solve our obesity epidemic any time soon. Weight gain will change the financial arithmetic of many products and services. At least one major European airline has wrestled publicly with policies described as a “fat tax” by some newspapers in January 2010 (see here).

Wise companies will develop product and service innovation that meet the physical, social and identity needs of overweight consumers. They’ll do so not only for profit, but also because it’s the right thing to do.

Bigger, faster, more

In the UK breast reduction surgery for men was the fastest growing procedure in 2009, up 80%, see here. Ninety-three million Americans are obese, a number that will climb to 120 million within five years. In England, nearly a quarter of adults is obese (see NHS statistics here).

To really understand the trend, watch the obesity map below:

The unstoppable momentum of size

Obesity is hardwired into society, socially reinforced and maintained by the physical infrastructure of our cities. Consider the following:

Society is “obesogenic” in the sense that people are addicted to fast food and sedentary lifestyles promoted by television and cars.
Our physical infrastructure locks in these patterns. Urban sprawl and zoned planning force people into more car use and less walking.
Obesity is social. Having an obese spouse raises the risk of becoming obese by 37%. Having an obese friend increases the risk by 137% (See here for data).
95% to 98% of diets fail over five years (see here).

A few billion spent on government health promotion is not going to reverse all this. Instead, obesity will become simply a part of “normal”.

Size acceptance

Lisa Marie Garbo (a descendent of Greta) is the queen of size acceptance in California. Her nightclub, Club Bounce (see here) invites patrons to petition President Obama for overweight rights and anti-hate legislation. Last year, the National Association to Advance Fat Acceptance (NAAFA) celebrated its fortieth birthday. NAAFA says “our thin obsessed society believes that fat people are at fault for their size and it is politically correct to stigmatize and ridicule them.”

Embrace customer need, don’t punish it

Obesity will change the financial arithmetic of annuities, life assurance and medical cover. Transport services will bear extra costs of carriage space and fuel. Other products and services will innovate to adapt to society’s changing weight and shape.

CasualMale is a good example of niche innovation. With over 500 clothing and fashion retail outlets worldwide, its brand is focussed on “big and tall men” and its clothes feature comfort innovations like neck, waist and jacket “relaxers”.

In contrast, moves to “tax” overweight customers are very likely to meet with public backlash. We think history will judge these measures to be punitive and discriminatory.

Instead, the size acceptance movement and the huge growth of obesity will drive demand for products and service innovations that are attuned to the physical, social and psychological needs of big customers.

In financial services, this could mean new, innovative underwriting models and annuity benefits written for the specific needs and risks of obese customers. Or it could mean niche branding that empathises with and celebrates obese customers.

Above all, remember that in the UK, this “niche” is a quarter of adults and growing fast.

Design for experience, not features

Simon Kirby — Tue, 26 Jan 2010 22:51:25 +0000

The problem with product development

The iPhone is one of the least usable phones for sending text and email but gets the highest consumer satisfaction of any smartphone. Why? It’s product design that’s based around experience not features.

Small usability, big love

An average iPhone user makes almost three times more errors per text message than someone using a hard-key QWERTY phone (see
usercentric.com). But googling the terms “iPhone love” gets about 336 million results and the iPhone has higher customer satisfaction than any other smartphone (see JDPower consumer research, here
).

Experience not features

It’s not just less usable. If anything, the iPhone has less features than many competitors. Mobile email, voicemail and mobile web browsing are hardly new, you can’t forward a text or voicemail and the camera is positively primitive.

But it does have Apple’s trademark obsession about experience. This isn’t just in the fluidity of the interface or the resolved simplicity of the case. If you buy one in an Apple store it will be “served” to you with a flourish like Michelin-starred food.

Product developers spend lots of time benchmarking product features and prioritising them using techniques like conjoint analysis. What we need to do more of is design, customer ethnography and journey mapping to build experiences out of our products.

How to time product launches perfectly

Simon Kirby — Mon, 25 Jan 2010 17:59:25 +0000

Here’s a contrasting tale of two Apple products that struck me recently. Wired Magazine carried a story about Apple’s 1983 design for an ‘iTablet’ here. Twenty-seven years later and the iPad is finally launched. In 1989, Apple did start developing the Apple Newton, an early personal digital assistant. Despite brilliant, breakthrough functionality, the Newton was canned in 1998, following a prolonged commercial flop.

Premature genius and the art of timing

The change curve in product development

Premature genius is one of the most overlooked challenges of product development. To visualise the problem, think of a change curve. Launch too early and no amount of marketing and development spend will get you to take off. Launch too late and you may not catch up with competitors.

There’s an important nuance in the story about the Apple Newton. It may have seemed like a failure. But, an ex-Apple staffer tells me that there’s a direct line of sight between the technical and human lessons which Apple learned on the Newton and the huge success of iPod and iPhone. No Newton, no iPod, no iPhone.

Three key disciplines for perfect launch timing

New product development needs to be framed in the present and future. There are three key disciplines for achieving that:

Trend analysis. Create private foresight out of public knowledge by identifying precisely what trends affect your product idea and understanding exactly where you are on the change curve.
Invest in corporate memory of rejected ideas and failed products. Put in place structured PRINCE2 style lessons learned documentation. Put old concepts on ice and review them regularly.
Identify the modular“components” of innovation be it an insight into customer needs, a process or technology. An entire concept may not have worked, but many of its building blocks could be entirely sound.

Contact evasion and how to avoid it

Simon Kirby — Sun, 24 Jan 2010 19:02:03 +0000

Making it really hard for customers to contact us (even if it’s important).

Just like taxes, there’s contact avoidance and there’s contact evasion. One is a perfectly sensible, reasonable response to high volumes of customer contact. The other lands you in trouble.

Service experiences that make you go grrr…

This weekend, I landed in trouble with a service “experience” (I use the word loosely) provided by a well-known DVD rental company. I wanted to cancel my subscription.

Despite being a web business, the only way of doing that was to phone.

After twenty minutes of muzak … click. The phone went dead. My emotional stance went from “this is a fine company, but just maybe not for me” to “I hate this bunch of time-wasting charlatans”. Definitely unfair, but that’s customer emotions for you.

What is contact evasion?

Contact evasion is an easy response to high call volumes that makes customers angry. In a service economy, customer anger is toxic. From experience, here are the top five contact evasion strategies

Being closed when the customer needs help, e.g. bank branches that are only open in working hours.
Not providing channels that the customer wants to use, e.g. a website that doesn’t provide a phone channel.
Hiding contact details deep in a website or behind a labyrinth multi-level options.
Not empowering or training agents to be able to actually help callers as opposed to just taking messages for other departments.
Glacially slow response times that don’t meet customers’ expectations.

How to avoid contact evasion

There’s no reason why any organisation needs evade customer contact. What’s needed is an active service management framework that lets you be easily contactable without drinking from the fire hydrant of customer demand for service. The service management framework needs to:

Makes the root causes and cost of contact visible.
Makes expensive, avoidable and unwanted contact the clear responsibility of the team, function or department that actually causes it. Usually, that’s not the service department!
Builds helpful, highly usable self-service.
Mitigates things that predictably cause peaks in service demand.

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