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February 1999 Volume 3.04
CVM Opens European Centre
Heading up Customer Value Management's new European Centre is Colin
Bates. As Marketing Director for AT&T Unisource, Colin was responsible
for the rollout and management of a portfolio of Customer Value
Management programmes in AT&T companies throughout Europe. Focused
on the IT and telecommunications markets, the projects have covered
a wide range of businesses, countries and cultures.
The programmes have been managed from the initial objective setting
stage, through the execution of measurement, to the development
and deployment of appropriate countermeasures. His work has provided
major business benefits from both an operational perspective and
a strategic viewpoint. The amalgamation of findings from Customer
Value management programmes into the development of a corporate
Value Proposition, and then into a marketing strategy execution,
has produced radical improvements in business performance.
Colin's 20 years marketing experience has covered Product Management,
New Product Development, Market Research, Marketing communications,
strategic consultancy, and customer value management.
Colin lives near Stratford upon Avon in England, and is married
with two young children.
In March he will be presenting a paper on "Loyalty and profitability:
how much loyalty is it profitable to aim for?", at the Telecom
Customer Care conference being held in Rome, Italy.
Contact details:
Telephone / fax: (+44) 1564 792907
email: colin@custchamps.freeserve.co.uk
Not Everyone is the Same
In earlier articles we have looked at how critical it is to build
a 'golden thread' from the customer back into the Divisions in a
business that collectively provide the products & services that
a business provides to its customers. Recently I received a brochure
from a local Natural Gas Company headed up, "Not everyone is
the same'. A photo of a rosy baby beamed from the cover of the brochure.
Inside I learned that the Gas Company was replacing its single tariff
with two pricing plans to suit individual needs. Two plans would
only suit individual needs if the needs of all gas customers fell
precisely into the two clusters. What the Gas Company was really
doing was reducing energy pricing for customers with gas water heating,
and increasing its prices for all other customers. It was not easy
to find this out from the brochure though.
"If you are unsure of your current plan, just check your invoice."
The brochure explained how gas usage was now being measured in kilowatt-hours,
and how you could check your invoice to find out which of the new
pricing plans you had been placed on. On checking the gas bill I
found that usage was shown in megajoules, and that there was no
mention of either the new 'Lifestyle Plan' or the 'Convenience Plan'.
"If you have any questions arising from the leaflet, call us
tollfree on 0800 xxx yyy." As I did have questions about the
brochure I phoned the 0800 number. It rang once or twice and I was
then greeted by a voice message, which told me that all of the customer
service representatives were busy, and that I had been placed in
a priority queue. A few minutes later a person answered the call.
Apparently the Gas Company would be introducing new invoices in
a few months. Introduction of the new invoices had taken longer
than expected and the Marketing Division had sent the brochure out
announcing the new invoices without knowing of the delays. This
had caused increased calls to customer service, so their answering
times had become unsatisfactory. So a change intended to lift customer
satisfaction had the opposite impact. A badly timed brochure confused
customers, and they then had problems getting their questions answered.
So how could the Gas Company have done things better? One of the
most important principles of the CVA( approach is to follow the
sequence of Choose Value, Deliver Value, and Communicate Value when
making changes to customer facing business processes. The Gas Company
got it right when they decided to improve their invoices and offer
better value for their high usage customers. What they should have
done next was to develop the capability to deliver the new service
innovations to their customers. Then they would have been able to
deliver the service and communicate its benefits at the same time.
But this seems fairly obvious. Surely everybody at the Gas Company
wants to do a good job for its customers? How could it be that the
Marketing Division didn't know the new invoices were delayed, and
the Customer Services Division didn't know they needed to put more
people on the phones to handle the influx of calls caused by the
brochures? The answer lies in the divisional structure of most large
businesses.
When there is a strong divisional emphasis driven off tight financial
control of each division, the golden thread between the customer
and between the divisions is non-existent. The company as a whole
starts to do strange things to its customers. In competitive markets
this reduces customer loyalty and drives loss of market share. While
it is important for all divisions in a business to be linked through
to the customer, it is critical for the golden thread to extend
to the information systems division. Projects such as introduction
of a new invoice are dependent on information systems being enhanced
to support the new business process. A comprehensive CVA( based
management and measurement system ensures that good communication
channels exist between the information systems division, other divisions
and the customer. When this happens, market share and profit starts
to soar.
Culinary Mystique or Fawlty Towers
We decided to stay a few nights at PekaPeka on our tour of the lower
half of New Zealand's North Island. The motel guide recommends Breakers,
a restaurant just to the south at Waikanae Beach.
Arriving at Breakers we are told that the chef is feeling accommodating
tonight, so there is a window table available for us looking out
at Kapiti Island. The waiter comes and tells us the specials. Although
we are the first diners we are told that half of the options on
the specials board are not available. Tonight's fish is Butterfish.
It sounds good so I order it. At the next table another waiter tells
the diners that he thinks today's fish is Tarakihi.
The meal comes and the grilled Butterfish / Tarakihi with a garden
salad is delicious. I wonder what it was? It would have been nice
to have a dessert and a coffee, but our waiter never returns. Eventually
we tire of the view and leave.
Regards,
Rodger Gallagher
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