Sunday 30 September 2012

How to pass on increased costs of production to customers

The Watchdog programme on BBC TV last week included a story about how some manufacturers of household products have left the price of their product the same whilst reducing the volume of the product.  In some instances the design of the packaging, whilst looking the same, had been changed to accomodate the smaller amount.

It included one example of a cleaning fluid which used to have the volume displayed on the front of the bottle above the name.  When the company recently reduced the volume by a quarter the volume display moved to the bottom of the back of the bottle.

It would seem that marketing people in these organisations have been busy trying to find ways of passing on increased costs (or perhaps increasing margin) without the customer noticing.  Perhaps indicative of the culture of the business and certainly not a great way to build customer engagement.

Contrast this with a note I saw displayed in the bakery in the village where I live.  It's displayed below.

  
I talked to the proprietor about it.  She explained that whenever they increase prices they explicitly point it out to customers and explain why.  I asked her why she felt the need to do so.  Her answer: "I think customers come back to us regularly because they like what we sell and they trust us.  They know that we need to make a profit but also that we're not taking advantage of them.  We just daren't risk losing their trust, so we're always open and honest."

I think some of those marketing people should visit them.

LinkedIn: http://uk.linkedin.com/in/timhadfield
Twitter: @accordengage
Telephone: 0044 07906650019

Sunday 23 September 2012

Does your new recruit have the X-Factor?

Apparently the viewing figures for X-Factor are falling - in the UK and in the US. I must be one of the few people bucking the trend in the UK because whilst I haven't really watched it in the past I have seen most of the current series so far.

I'm troubled by the process the candidates are asked to go through though. At first auditions it's entirely up to them what song they choose to sing. Those who stand out are those who sing something that is meaningful to them and suits their voice. They focus on their strengths, concentrating on what they're good at and allowing their personality and style to shine through. Those who progress are not bland. But then, during the later stages, having a weekly theme means they are forced to sing songs that they wouldn't ordinarily choose and which results in them losing some of their 'uniqueness'. The biggest recording artists in the world are those who have a style all of their own and are instantly recognisable. I don't think the judging process incentivises the candidates to be unique and unusual - it encourages being bland.

But it would perhaps be unfair to be too critical - because most of us do the same thing when we recruit people into our business. During the recruitment process we ask the applicant to highlight their skills and show how they will be useful. We congratulate ourselves on a rigorous process which finds the person who will really make a difference to our business. Then they start in the role and we expect them to 'fit' into the organisation and to adapt their skills according to what's needed in the role.

The process on X-Factor doesn't set winners up to succeed. History shows that winners of the X Factor often don't experience long term success afterwards. Do we set up new employees to succeed or to disappear after they have joined?

LinkedIn: http://uk.linkedin.com/in/timhadfield
Twitter: @accordengage
Telephone: 0044 07906650019

Monday 10 September 2012

Effective? Or efficient at being ineffective?

I recently had a conversation with an executive in a large UK based business.  He was telling me about his concerns about the current extraordinary focus on cost reduction in his business specifically and in the UK economy in general.

In this age of austerity it does of course make sense to be efficient and prevent unneccesary costs.  But he went on to explain that the problem is that the focus on removing cost has become such a high priority that it's replaced a common sense view to running the business.  It means that people cut corners in order to save money.  It means that focus on the customer within the business has become secondary and consequently it means that their customer experience is deteriorating.

That's a problem when customers are saying that the experience already falls short.  And yet .....they are congratulating themselves on cutting costs out of the business.

He went on to express his fear that what they're doing is to become more efficient but less effective in delivering what customers want.  Or put another way - more efficient at being ineffective.

Not a good strategy!

LinkedIn: http://uk.linkedin.com/in/timhadfield
Twitter: @accordengage
Telephone: 0044 07906650019

Friday 7 September 2012

What has no place in your organisation?

I listened to a radio programme earlier this week about the proposed ban on bullfighting in Mexico City.  It's apparently a big and very contentious issue as it has been popular throughout the country since the conquistadors introduced it more than 500 years ago and for many people is part of Mexican culture.  Although Spain is still recognised as the home of bullfighting, Mexico City has the largest bullring in the world and the sport (I know some argue it isn't a sport) is a popular pastime in the country as well as being a source of employment for thousands.

But in recent times its popularity has been waning and a growing number of Mexicans now actively oppose it, regarding it as both barbaric and an unwelcome reminder of Spanish colonialism.  And legislators in will soon vote on whether to ban it in the city.

In the programme one objector said that "it should have no place in modern day Mexico."

His statement made me think.  I wonder how many organisations have leaders who have thought about and communicated for their people what has no place at work - what behaviours and actions are totally unnaceptable?

Many do of course have a set of values which are intended to provide guidance for how people should behave at work.  I often hear leaders in organisations talking about how important theirs are and, providing they're not simply posters on a wall, they provide employees with guidance about what things they should do.  But far fewer provide the same level of guidance about things they should not do. 

And yet in organisations who do, employees often tell me that the clarity about unacceptable behaviours is as useful, if not more so.  The negatives can provide a clarity that's sometimes missing in the positive statements which by their nature are usually examples of the type of desired behaviours.  In contrast the negatives are often more specific and draw out explicit examples of what does indeed have no place in the organisation.

Is it clear what has no place in your organisation?  And if so, would it be clear to everyone?  Thinking about and clearly communicating this is a useful way of steering behaviour providing there are supporting measures and consequences for anyone who ignores the 'rules'.

I wonder if some of the highly publicised scandals in recent years would have happened if the companies involved had communicated what had no place in their business?

LinkedIn: http://uk.linkedin.com/in/timhadfield
Twitter: @accordengage
Telephone: 0044 07906650019

Tuesday 4 September 2012

Big banks - customers complain every seven seconds!

According to figures released over the weekend a record 2.2 million customers complained to Britain’s biggest banks during the first six months of this year.  Or, put another way, a customer complained every seven seconds!

The banks were deluged with complaints about mis-sold insurance, investments and mortgages - pretty much the things that are core to their business.

This prompted Justin Modray of the financial website CandidMoney to comment: "Banks seem to have a total disregard for their customers.  They might project a friendly face, but behind the scenes they're pressuring staff to hit ambitious sales targets which inevitably leads to mis-selling, a key cause for complaint."

It all paints a sorry picture, reinforced further by the LIBOR scandal - which is likely to escalate as investigations continue.

And yet the banks claim that the problems are exceptions and that customers are at the heart of their culture.  It just doesn't add up.

So the question is whether Boards and Executives don't understand their culture and how it influences the behaviours of their people or they understand it but they really do have a disregard for their customers.  My view is they genuinely want to have positive and mutually beneficial relationships with them but this is undermined by two things.  Firstly, short term thinking prevails, resulting in an unhealthy focus on the achievement of targets - at all costs.  And secondly, that they don't understand in sufficient detail how this focus translates into processes, behaviours and ways of working that damage the relationship and produce complaints.

Fundamental change is still required.  But a pre-requisite for that is a deep understanding of the current culture, its causes and its implications.

LinkedIn: http://uk.linkedin.com/in/timhadfield
Twitter: @accordengage
Telephone: 0044 07906650019

Sunday 2 September 2012

15 words I don't want you to use to describe me when I'm your customer




Words are important.
The words we use reflect our thoughts.  And influence what others think and feel.
And it follows that the words used in organisations reflect their cultural mind-set.  And that culture then influences the behaviour of people who are part of it.
That’s why, when I’m a customer, I’m interested in the words the company uses to describe me.
So here are 15 examples of words I’d rather not be used to describe me:
1.       Caller – a term often used in call centres to describe people telephoning.  When this is the case, the management information will also usually refer to ‘calls received’.
2.       Applicant – term used to describe a person who has applied for a product or service.
3.       Account-holder – a common phrase used in banking and financial services to describe someone who has a product with the organisation.
4.       Insured – term used to describe someone who has an insurance product.
5.       Cover – a term sometimes used in restaurants, reflecting the number of available seats.
6.       Complainant – word used to describe a person who is complaining.
I know these first few aren’t particularly derogatory.  You might even say they’re benign.  The problem is that they de-personalise me, and every other customer.  I’m not a caller, I’m a real person, a customer – and the success of your business ultimately depends on your relationship with me, and other customers.  Don’t forget who I am by using alternative words.  It’s easier to accept losing a call or caller than it is losing a customer. 
But there are others that are more derogatory, and interestingly generally apply to potential customers before they buy;
7.      A Punter – this phrase was originally used to describe customers at the racecourses tracks but has extended in use to mean anyone who could be persuaded to part with their money.
8.      Prospect – someone who is interested in the product or service and needs to be influenced to buy it.
9.      Be-backs - customers in many sectors that after an initial conversation promise to come back and buy but never do.
10.   Cones – refers to passengers on cruise ships.  It apparently references the ‘Saturday Night Live’ TV programme, in which ‘Coneheads’ were people who eat large quantities?
I definitely don’t want to be described like this.  The use of the words is negative and / or assumes that I should be influenced, taken advantage of.
But possibly the worst words are in car sales.  Here’s a few examples:
11.   Stroke – a time-waster who really have no intention of buying.
12.   Bumblebee – a person who can’t decide between several cars.
13.   Roach – someone with bad credit.
14.   Laydown – someone who is willing to pay the advertised price for the care without trying for a discount.  This type of person is also sometimes called a ‘grape’, as in “I stepped on a grape”.
And my final example was illustrated by Greg Smith, Executive Director and Head of Goldman Sachs United States equity derivatives business in Europe, the Middle East and Africa.  He revealed in an open resignation letter his discomfort with how customers are referred to as ‘muppets’ i.e. stupid. 
 
In his letter he said that culture was “always a vital part of Goldman Sach’s success.  It once revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients.”  He went on to describe how it had instead become purely about making money and that culturally this translated to pushing customers to buy products that made most money for the business rather than what was best for them.  Muppets, and other words and phrases, illustrated perfectly how people thought about customers.
What words do people in your business use to describe your customers?  And are they likely to positively influence behaviour so that they deliver an experience to customers that will mean they come back again and again?
LinkedIn: http://uk.linkedin.com/in/timhadfield       
Twitter: @accordengage
Telephone: 0044 07906650019