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July 2004 Volume 3.03
We'll be dropping by on
a different day
by Rodger Gallagher
 Hassling
Customers
Our local energy supply company decided to cut costs by reading
customers' gas and electricity meters on the same day. Quite a good
idea and it would also have an added benefit, in that customers
could be given combined gas and electricity accounts for exactly
the same period. How was it then that the energy company turned
an idea that had the potential of being a win-win for customers
and suppliers into an implementation that destroyed customer value?
The first step was to decide that it was necessary to tell customers
about the change. Why not hire an agency to produce a colour mailer
telling customers about the change? Again a sensible enough idea
so long as the mailer told customers what they needed to know about
the changes. So what would customers need to know about the changes?
As a minimum they would need to know; the new day each month when
the meter reader would be calling, the date when the new system
was being introduced and the date when the new combined invoice
would be introduced.
But instead of thinking what information about the change would
be of use to customers, the energy company's mailer told customers
that;
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The electricity and gas meter reading days would be combined
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The meter reading days for all customers would be rescheduled,
including those who had only electricity or gas with the
supplier
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Their next bill would the mark of your new reading date
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The change might result in a change in the number of days charged
on the next bill
So the second step in destroying customer value was in supplying
customers with information that not only didn't tell them anything
useful, but in the case of an electricity-only or gas-only customer
reminded them that their meter reading date was being changed and
that there would be no benefit to these customers.
Considering the situation for the majority of the energy company's
customers, we see that they all get a change in meter reading date,
and a change in invoice date. They get no benefits at all. So the
energy company has hassled most of its customers and sent them a
mailer pointing this out to them
Impact On Value
When we undertake Customer Value Added projects we often find that
the hassles that suppliers impose on their customers when they deal
with them have a major negative influence on the value seen by the
customers. So even if you don't do full Customer Value Added surveys,
it is extremely beneficial to check any planned changes in service
delivery or communications with customers against a customer value
framework.
Checking Against A Customer Value Framework
Within the Customer Value tree framework we can see that the energy
company's actions have possibly lowered Product & Service Quality
by providing communications lacking useful information and by changing
the billing date to one that may not suit the customers. This is
often very important for people on a tight budget and for businesses
with fixed payment cycles. But even more significantly they have
increased economic cost of doing business with them. Unhelpful mailings
introduce a hassle factor which negatively impacts how customers
view the cost of dealing with a supplier. In a similar way a change
in billing date to one that does not suit a customer may impose
a real cost on customers that negatively impacts cost perceptions
When businesses use a check against a customer value framework
in this way it ensures that planned actions add to rather than subtract
from the value seen by customers.
At the Hydro
The story goes that a café owner visiting Hamilton East
from another Waikato town was looking for a quite place to eat some
takeaways and cruised down Jellicoe Street to the park alongside
the Waikato River. While contemplating his lunch his eyes settled
on some empty shops across the road. An idea began to evolve that
day that later gave birth to the Hydro Majestic café.
At first the café, fitted out in two of the shops, opened
in the middle of the day and early evening. After word got around
about the pleasant meals prepared from organic, free range, free
trotting ingredients, the café slowly took over the entire
building and began opening for breakfast , and dinner in the evenings.
From the menu I selected chicken stuffed with sun dried tomatoes
and served with a risotto. The wine list has a reasonable selection
and features some interesting Waikato wines. I selected a Cabernet
Franc Merlot, from Judge Valley Vineyard, Puahue, near Te Awamutu.
It was well made with plenty of red fruit showing through. To finish
the meal off I settled for a cappuccino and a chocolate coated almond
biscotti. Next stop, to finish off the evening, was a performance
of 'The Legend Returns' by Helen Moulder and Rose Beauchamp., at
the Waikato University Academy of Performing Arts. I found this
show to be witty and highly entertaining.
The Hydro Majestic is enjoyable. The current owners have decided
to move on so let's hope that it continues to provide good food
and ambience in the future. It's a 7 out of 10 for value.
You can find Hydro Majestic at 25 Jellicoe Drive, Hamilton, New
Zealand. (Phone (07) 859 0020. On a summer evening you can park
in Hamilton Gardens and stroll along the riverside to the Hydro.
Regards,
Rodger Gallagher
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