Saturday 26 December 2009

The Cost of Bad Service

Happy Boxing Day everyone. I hope Santa was good to you and you had a lovely Christmas.

I hate to pick on a sour note but something triggered my mind this Christmas to how poor service kills the experience of either buying things or at minimum using a service. Typically if things aren't going according to plan, our only recourse as customers or users is to call the company in question and either clarify or complain. We hit the dreaded call centre and the world of scripted customer experience, designed, no doubt, by hard nose managers who have neither ever answered a customer call nor really ever had to use their own service.

Once, at the Ralph Lauren Outlet shop in Bicester, a gentleman's credit card required some extra authorisation as a standard security check. The queue looked on in anger as the poor shop assistant went through some questions and it appeared that things were not happening for some reason - the call centre was in some foreign location and language was clearly an issue. The customer smiled enigmatically and asked for the phone as he was worked as a bank manager of the credit card company in question. He apologised to the queue generally before turning to the phone, explained who he was and then tried to clear up the situation. After several minutes of talking he suddenly lost his rag and started shouting down the phone trying to explain he was a manager and why that made a difference. The call ended a full 10 minutes later and he withdrew his card, left his purchases and stormed out of the shop as people muttered at him, 'Now you know what it's like, mate.'

But generally managers don't know. In the UK, on average, senior executives are paid around six times more than lower level staff - in the US this gap is over ten times. The closer you are to the customer, the reality is that the less you are paid. Meanwhile, the farther away you are, the more you are paid by a massive difference. It is also true that the closer you are to the customer, the less decision making power you have - stands to reason as you are less paid therefore have less responsibility.

Wrong. The closer you are to the customer the more influence you have over the company's service, brand and reputation - and therefore - it's profitability.

How many times have you called companies to complain and all you get is the euphemistically called 'Customer Service Engineer' or similarly exotic title. If your question goes beyond a scripted answer, you naturally ask to speak to their manager, or heaven forbid, a director who is responsible for the whole service. Forget it. They are not paid all that money to merely listen to customers, deal with problems or understand how their service is performing. They have graphs and reporting lines for that. As long as the colours look pretty - the business is fine.

I have mentioned this before, at Genesys Conferencing some years ago we came up with a radical idea as customer 'incidents' were increasing and, in general, people were getting angrier. For once, we looked beyond the graph and listened - I don't know what possessed us to do it. It seemed that customers who had more incidents subsequently spent less with us and some even left us - all resulting in lower profits from that customer. Often, the incidents were over minor losses to the service or billing mistakes (like continuing to bill an account after a person had left, which on the face of it should be the customer's fault for not closing the account and making sure no one used that service on that account again). So we decided to give discretionary powers to the customer service 'engineers' to actually give refunds for the service to the value of the incident that went wrong or up to £1,000, usually by offering a credit to be consumed as they carried on using.

The effect was astonishing. Instead of getting customers leave us, they stayed. As MD, I would get calls praising our customer service team and account managers who helped solve problems but at the financial end, we lost less profit. This seems daft as surely we were giving some away. It turned out that not all customers rang with the purpose to get a credit so when offered it they felt it was not required but at least someone had listened and done something about it. While for others, by giving a small credit instantaneously, we never felt any further losses from less usage or customer churn. Better still, by understanding what caused the problems rather than simply turning people away, we got procedures in and looked at technical faults more closely which fixed the base problems causing the incidents. By listening and acting we were able to find the real problems more easily and fix them. Eureka!

This was not rocket science. Recently, my wife used my car and drove into London. She entered the Congestion Charge Zone for approximately 5 minutes before parking and then left after charging had stopped. She used her account to text her charge of £8 that day but mistakenly paid for our other car which was being used in Basingstoke by me for the day. It was the second time we had made that same mistake. This was on 5 November this year. On 12 December, we received a Penalty Charge Notice (PCN), which had been issued on 7 December and took 5 days to arrive even though they have our email addresses.

I called to complain that this delay was unreasonable as I had not used the car that day and my wife assured me she had paid and even had the text response to say she had. The menu service at Transport for London - TfL -(or CC London) on the call handling device clearly says 'if you want to complain, press X' and I did so. The customer service person said they only handle complaints in writing - I pointed out the taped call handling said differently and they said to write to complain about that too. As you only have 14 days after the date of issue to challenge the PCN, I wrote via the website complaint email service and explained what had happened the same day. I got a telephone message on 21 December from a lady who gave a number that did not exist to respond to which curtly said they had reviewed my case and tough - no explanation.

I called again on 21 Dec to the customer service line which did answer and asked to speak to the lady in question, who was unavailable but the person said they could handle it. I explained I thought it unreasonable to be sent a notice after 4 weeks on an incident and it made investigating at my end difficult - tough was the answer as there are NO LIMITS on the length of time that a PCN can be sent out after an incident. TfL can send them out as long as they liked after. The person did offer that a system upgrade had caused delays but that was that. I explained that was not my problem, I surely had a right to defend myself as clearly we had paid £8 for something and we wanted an explanation, not realising the mistake was ours. I explained I was in our other car that day and gave the registration number but they would not check if that car had been paid for - it was irrelevant.

As the call ended, the lady then said, 'Do you want to pay now?' Haughtily, I said I had until 23 Dec according to the PCN and she said, nope - I had 14 days from the date of issue, 7 Dec and so 21 Dec was the limit. It was now a point of order - the PCN clearly stated that I had until 23 Dec, she said she did not have access to the PCN and she doubted if that's what it said, and, in her own words - 'I don't care'. If I did not pay that day, I would be charged the full amount.

I paid there and then. But it was a classic example of rubbish systems, not joined up and little attention to the customer experience. Capita, who operate the service for TfL assume this is a penalty or tax service and so these are fines - punishment and so customer service is not required. The onus of paying the charge or fine is on the customer even though account details and direct debit mandates are in place and number plate recognition has been available from the start. In our case we have two accounts, one for each car but with one payment method - surely we could operate as one account? The final point of principle is that we HAD paid £8 that day for the right to drive a car in the Congestion Zone and if we got the wrong car, surely we had the right to get at least a credit for the one wrongly paid for?

It seems CC London has the right to steal money and impose unreasonable fines plus have an indefinite period to impose the fines making defence of such fines as impossible as it can. But it is the glee with which the customer service people take in telling you there is absolutely no way that you can get relief on a charge and no matter what happened it is your fault and your responsibility and crap service is not an excuse.

CC London is law unto itself. But poor customer service and stupidly imposed systems by highly paid management makes matters far, far worse. It is derived from the first principle that the customer must not be refunded no matter what. If that is challenged, pull down the 'Iron Curtain' that says managers and directors do not take calls and that will frustrate the hell out of people and in the end they will give up.

Utilities are classic for this and only recently have we got enough choice to change suppliers as you should do in the real competitive world but CC London has a monopoly to impose whatever it likes as you have zero choice in the matter. It is a licence to print money and they do so with complete impunity.

No wonder the mangers get paid so much more than the people on the phone - they are clever bunnies. If Boris Johnson had a real brain, he would put out to tender the running of the service - and the first stipulation should be that the call centre should be located in London and run by Londoners rather than Coventry as they should know what they are talking about having used the service at minimum. Secondly, he should combine cars and accounts so that people can pay for any car with one text. Thirdly, he should review the fairness of the system as a flat £8 charge is imposed even if you drive around polluting and congesting all day or enter for only a few moments.

Come the revolution! Make Customer Service mean what it says - remember we are customers after all.

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