Welcome to our first ever “guest post”. Our intention is, from time to time, to introduce a little variety into these posts by inviting occasional comment from our friends in the industry. First up, Alistair Watts. Many readers will know that Alistair has enjoyed a distinguished career in international market research having headed up at various times the Nielsen companies in Singapore, Vietnam and China as well as being regional head of Nielsen operations in Australasia and Japan. With remarkable prescience Alistair retired from market research just months before the “great recession” hit and now – in a complete change of lifestyle – is running a farm in New Zealand. This doesn’t mean he has given up all concern with marketing and research issues however, as is apparent from his first post for Research.Opinionated.Insightful:
It still amazes me to see how little value so many organisations place on customer retention. Without even trying to find them, examples of plain bad customer care keep appearing. I am sure the organisations I’ll describe in this (and my follow-up) posts have some customer care strategies, want to retain current customers and (probably) conduct some kind of satisfaction survey but, apparently lacking any real understanding of how the customer may view their relationship with the service provider, they plough on regardless of any negative feedback or suggestions to the contrary.
My wife and I decided to change our electricity supplier recently. The reasons were fairly evenly divided between the pull of a better offer from the new supplier and the push from the incumbent. Pull factors will be covered in a later note. Push factors included an inability of the old supplier to communicate with us as individuals, an apparent lack of awareness of where we were located (Google Maps anyone?) and poor follow up and information during the all too frequent supply outages we experience in our locality, especially in winter. We live on a farm – no power means no water (electric pumps), no fence (also electric powered) and no Internet connection. Nothing.
Another key motivation to change was the very poor and confusing feedback about our consumption patterns and how we could better measure them and thereby better manage our energy usage.
The new supplier undertook to inform the incumbent of our decision, warning us that we would at last have contact with them once they heard news of our departure. So it proved to be. The new supplier appeared to know the habits of the old supplier better than the old one knew them. A phone call was received from the incumbent asking for confirmation of our decision and covering a few procedural details for the changeover. We did offer during this conversation to provide reasons for our decision but this did not, either at the time nor subsequently, trigger any response.
We did however receive a letter informing us that we were valued customers and hoping they could “keep you as one of our customers”. This standard letter was addressed to us as “Dear Customer”, signalling apparently that they still don’t know our names and was completed with a reproduced signature. It gave six reasons for us to stay, a better relationship clearly not being one of them.
The first was that there were “loads of ways” we could pay our bill. We already knew that but didn’t see it as a particularly important or relevant reason for staying. A bill is a bill and it has to be paid. The standard 10% prompt payment discount was also mentioned although that in fact merely reverses the traditional procedure of adding 10% if a bill is not paid.
The second reason was that “we’ve got it all”, specifically electricity, natural gas and bottled LPG. And so what?
Thirdly mentioned was the reward programme although since participation in this was about to yield a NZ$10 to $20 voucher after a year of participation as compared to monthly bills of the order of $300 to $500 per month the “reward” side of the equation was somewhat lacking.
Point four amplified point one by mentioning online bill payment and accessing bill summaries online. Don’t most companies offer this now? Is this news in 2010?
Point five covered the availability of various pricing plans and the promise to have the right one for us. In vain did we scan this paragraph looking for clues as to which plan was right for us, how that had been assessed, how being on it would advantage us and how it could be accessed and discussed.
The final point was the availability of energy saving tips and exclusive Smart Savers offers, although what they are was not explained. To get this, all we had to do was to call them and they’d “do the rest”. Not likely, thanks.
This type of approach demonstrates a clear failure to understand how the service provider’s business plans and delivery system interacts with the customer. There is no empathy with the customer, which is hardly surprising because they clearly don’t know the customer as an individual, despite all the information gathered through consumption records over the years. Nothing in the letter or other communication suggested any knowledge of the customer’s needs or, worse still, what the source of the customer’s dissatisfaction might be.
The usual riposte to that would be that in a mass-market business it can’t be done. Unfortunately that’s not so in 2010 because the new supplier showed us just how well it can be done.
Market research is the voice of the consumer, whether gained via an individual comment or a research organisation that provides it. Certainly the latter can offer interpretative advice based on experience but the core feedback is from the customer. Assuming no basic errors in the methodology, challenging or ignoring the research findings is exactly the same as challenging or ignoring the customer. I mention this because customer satisfaction results for energy suppliers in my country are available (http://www.consumer.org.nz/reports/energy-providers/survey-results) but apparently are having little impact.
Understanding the delivery and service model from the customer point of view drives customer satisfaction. In my experience, users of services are happy to provide their feedback, at least where I live, where over a drink at home or a chance meeting in the neighbourhood people will talk for hours about what pleases or displeases them about services they use. In less rural settings, new social media channels and on-line qualitative services provide easy to access alternatives to get quick and in-depth feedback. Unfortunately the provider is often too constrained by what they believe they can or can’t provide to their customers or by an untested model of what their company’s DNA says customers want. I well remember presenting research results to a multi-national client in China who challenged the findings because this wasn’t the way the market for their products had developed elsewhere. Never mind what the end consumer in China was actually doing, it wasn’t how it should be!
The approach of our former supplier to one of their “valued customers” showed that they don’t really want to know what is driving customer dissatisfaction, probably because they’ve convinced themselves that they:
(a) Know what their customers’ want
(b) Are providing as good a service as they can within the constraint of the current business model and
(c) There isn’t too much of a problem anyway
That is, until someone else starts talking to their customers!
(Editors note: We will carry the second part of this series in a week or two).