Opine Consulting » Sectors

Banking customer service. The old oxymoron

Simon Kirby — Sun, 23 May 2010 14:36:17 +0000

What is about advanced capitalism that reproduces primitive Soviet-style customer service experiences?

Mrs. K and I went shopping this morning and found a wallet on the floor. It belonged to…well let’s just call her “Mrs. Smith” for the sake of the story. Mrs. Smith’s purse was stuffed with pretty much every kind of plastic card you can imagine except for anything with a personal address or phone number on it.

But we thought that’s not a problem. Mrs. Smith is a Barclays Bank customer and we can just phone her telephone banking hotline and then Barclays can pass our phone number to Mrs. Smith and she can come and collect her purse. Simple; after all, what bank wouldn’t want to help a valued customer stressing out about her lost payment cards and personal data.

Or so we thought.

After the IVR labyrinth, we got a “human”. Let’s not name names, but imagine that he’s called Edwin.

“Hello Edwin, we’d like to advise you that we’ve found a purse belonging to one of your valued customers.”

“Yes madam…”

“Yes. It doesn’t have any of her personal contact details, so we phoned you.”

“Just drop the card into a local Barclay’s branch.”

“Great idea, but it’s a whole large purse full of lots of personal things and we know that she’ll be worried about having lost it. Please can you contact your customer to tell them the purse has been found and pass on our contact details.”

“One moment please … I’m sorry madam, we don’t do that.”

“But what about your valued customer wasting her whole Sunday trying to find her purse? Then spending Monday cancelling all her cards. When you could just phone her now.”

“I’m sorry madam. It’s company policy. I suggest you hand it in at your local police station.

Causes of call centre customer service failure

How does a call centre end up being so utterly rubbish? Here are a few thoughts:

Employee micro-management expunging any sense of personal initiative or responsibility.
Compliance culture ditto.
Management of outsourced call-centres through strictly detailed service level agreements. If management by target worked, the shops would be full of great products from North Korea. They aren’t and it doesn’t.
Badly scoped outsourcing arrangements and strict silos between inbound and outbound teams.
Outsourced call-centres are often run as projects. The essence of good project management is to deliver exactly what’s expected. The essence of good service management is to deliver above expectations. These are two opposite management “values”.

Over Sunday lunch, we imagined Mrs. Smith cancelling the rest of her day in a futile search for her purse. While Edwin clocked up another exemplary day of customer service by handling our call in less than 60 seconds.

We’ve left the text of this blog post in Mrs. Smith’s purse so that she can discuss the meaning of customer service with her bank.

Innovation to manage government health service demand

Simon Kirby — Wed, 05 May 2010 01:30:05 +0000

This is an excellent government customer service innovation from Singapore.

If you need to go to a health clinic, it’s useful to know how long you need to wait. By giving customers this information, clinics can cut costs by smoothing out service demand peaks.

Check the clinic map (here, or click on the map image).
Click a red circle to see a live webcam of the queue at the clinic.
Click a yellow triangle to see average and peak queue data.

Government innovation and participatory budgets

Simon Kirby — Mon, 01 Mar 2010 08:00:07 +0000

Government is a Seventeenth Century machine, with late Twentieth Century middleware operating in a sceptical Twenty-First Century environment. To solve its (our?) public expenditure challenge needs solutions that do more with less, and not less with less. Getting those solutions imagined, designed and implemented is going to need a different way of doing things.

Public policy paradoxes

KPMG concluded in its report, “The Wolf is at the Door”:

“The public sector has one or two years to draw up plans to radically change their (sic) business models to enable their respective services to be prepared to meet the hard times ahead without compromising on quality of services delivered.”

Insanity, as Einstein observed, is doing the same thing over and over again and expecting different results. In setting budgets, government has to deal with two awesome paradoxes:

1. There is a large public expenditure gap…

– but businesses and citizens retain high expectations of public services.

2. Tough policy and budget decisions are necessary …

– But public trust in government is required to consent to tough choices and that trust is at an all time low.

Participatory budgets could the be answer to these problems. In this kind of budget process, citizens are actively engaged in setting, debating and challenging budget options. The results are a budget that is properly democratic and properly legitimate. It fully reflects citizens’ priorities and is worthy of citizens’ trust and consent.

Last year, the City of Cologne won the European Public Sector Award for its participatory budget. The process was a massive piece of citizen outreach through flyers, internet and call-centres which allowed citizens to view, submit, comment on and prioritise proposals for better spending and saving. There’s a case study of the participatory budget process here:

Participatory Budgeting Cologne

View more presentations from Matthias Trénel.

With a history of corruption scandals, a €4 billion budget and a million citizens, Cologne is not an unfair prototype for what could be achieved in the UK.

Raping the poor

Simon Kirby — Sat, 20 Feb 2010 01:23:47 +0000

“Psst! Wanna loan? Only 2500% APR …”

Payday loans are poisonously expensive debt wrapped in sugar-coated brand and service for poor and desperate people. They’re innovative…and they stink.

The idea is to offer small, instant, loans with terms of a few days or weeks to “hard working” (i.e. poor) people with an “easy” application process on a “friendly” website with an approachable brand. This Wonga.com (daytime) TV advert captures the tone of voice:

Payday loan providers (or should that be “pushers”?) say that APR isn’t meaningful for a product with such a short-term. On an annualised basis, it would cost over £1,000 to rent a DVD for a year, but nobody accuses Blockbusters of exploitation. But then, nobody ever became dependent on Blockbusters.

An Office of Fair Trading report (here) shows that vulnerable customers often use high cost credit continuously. A constant or frequent loan at 2500% APR or more is the financial equivalent of a crack addiction.

Payday loans are not the only businesses that make small, short-term loans to the poor. So do credit unions and so does the Grameen Bank, the micro-credit institution founded by Nobel prize winner, Mohammad Yunus. But whereas micro-credit lifts people out of poverty, payday loans can help lock them in.

What banking desperately needs in the post-credit crunch social and political environment is the inventive product development of the Payday loan companies and the compassion of the Grameen Bank.

These loans are the evil twin of micro-credit, so the last word goes to Mohammad Yunus:

“It’s not people who aren’t credit-worthy. It’s banks that aren’t people-worthy.“

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.