I’ll have free Wi-Fi with my Big Mac please! Are you giving customers a reason to keep coming back?


McDonald’s are unlikely to be the only organisation that offers ‘something for nothing’ to all of its customers. However, McDonald’s are in my opinion the only organisation to be able to offer ‘something for nothing’ to so many people in so many places. In the UK alone, there are now approximately 1,200 McDonald’s restaurants – they are everywhere.

Over the last couple of years, McDonald’s have been executing a huge refurbishment and growth programme in the UK – http://www.mcdonalds.co.uk/ukhome/Aboutus/Newsroom/news_pages/mcdonalds-to-create-2500jobs.html – creating new jobs, installing new technology – they have transformed the look and feel of the restaurant environment, whilst maintaining the integrity of their product. Whether you love McDonald’s or not, no-one can argue that the result is extremely impressive. Every town or city you drive thru (get it?!) in the UK, you will see the famous Golden Arches in front of you. If you look inside the windows of the restaurants as you pass, you will notice that every table is occupied – every seat is taken. The iconic brand is alive and well in the UK at a time when many famous brands are struggling in equally famous tough economic times.

So what have McDonald done to not only sustain the brand, but to enable it to grow in such a tough environment? Well free Wi-Fi in every restaurant has a lot to do with it. What the management team at McDonald’s understood a long time ago is that the end to end customer experience is paramount to the sustainability of their organisation. It is not enough to keep producing ‘Big Macs’ day after day and expect the consumer to keep coming back time after time. If the Big Mac is served in a shabby restaurant, it may not appear to taste quite as good. If they could not serve the Big Mac with a fizzy drink that is healthier than the traditional soft drink, Mums and Dads may not want to bring their children to the local ‘drive thru’. New menu innovations such as the Fruitizz, and salads have enabled McDonald’s to offer ‘healthy’ eating options alongside their historic burgers. If the restaurant is in a location that is difficult to access – with no parking for example – many customers may not see it as an easy option to visit. And what if customers are not actually that keen on eating McDonald’s food at all? Opening many restaurants 24 hours a day is a start – there are not many places to get a coffee at 3am. The introduction of free Wi-Fi has also attracted a whole new band of McDonald’s followers – even if you do not like the food, you can still enjoy that freshly ground coffee whilst doing some work on your laptop. Dads can bring their children for a ‘happy meal’ whilst keeping up to date on the football scores.

I am writing this blog sitting in the McDonald’s restaurant in Doncaster, Northern England. As my work takes me all over the UK at present, I often seek out the local McDonald’s as the starting point of my day. Not only can I catch up on my emails and prepare for the work, I can do so whilst sipping on a Latte. Sometimes I treat myself to a bacon roll. Three years ago, I would not have done this. Why would I have? McDonald’s was not the kind of place I would have wanted to visit to just have a coffee. The reason I do so now is as follows:

  1. Consistency – I know that every McDonald’s I visit, the experience will be almost exactly the same – yes the accents of the staff may be different, but the look, feel, taste, sound of the product is identical. I can predict what is going to happen, and I like that.
  2. Accessibility – I can find a McDonald’s in every town and city I visit – most of the time they are open 24 hours, and I can always park.
  3. Products – I can get a great coffee and a bacon roll in the morning. I can have porridge if I am feeling healthier. There is something for everyone – even the burger hater!!
  4. Value Add – The fact that I can sit in a nice, clean, consistent environment, whilst drinking a good coffee, whilst getting some work done is greatly appealing – free Wi-Fi is the thing that has won me over – it is the thing that keeps me coming back.

I do not need to be a big fan of the Big Mac to become a loyal customer of McDonald’s. It is the end to end customer experience McDonald’s offers that makes it so compelling. It can now serve a loyal band of business professionals, as well as continuing to wow little people with the toy in their Happy Meal. McDonald’s invested and innovated at the right time – and will be here for many years to come.

Before I finish – let me make a comparison with another brand that ‘used’ to be as popular with business people in the UK……..can you guess which one………

Who remembers the Little Chef? They used to be everywhere too. Every major road in the UK seemed to have a building like the one in this picture serving the infamous Olympic Breakfast. I indulged in one or two of those in the past. Little Chef used to be the place that business people used to meet at the start of a working day. They would have breakfast and a coffee before venturing to their first business meeting.

In 2008, Little Chef did some work with the Michelin Star chef, Heston Blumenthal, in a reality TV show. They were a brand in severe decline, and wanted to reverse their fortunes. The overhaul recommended by Heston included a complete revamp of the environment, and a complete revamp of the menu. The results were impressive:

Unfortunately though, it appears as though it was too little too late. In January 2012, the company announced further store closures amid continuing losses – http://www.bbc.co.uk/news/business-16511001 . Like McDonald’s, they had identified that the experience needed to improve. Unlike McDonald’s, the strength and reach of the brand does not seem to have given it the time to innovate quickly enough. Why would I go in to a Little Chef (if I could find one), when there is a McDonald’s just around the corner?

We all know McDonald’s. We have almost all visited one. McDonald’s have provided us all with compelling reasons to keep visiting. A consistent experience, that is easily accessible, with a great variety of products, and free value add services. How many organisations can claim to offer a customer experience like that?

What do you think? As always, your comments on this or any of my blogs are very welcome.

2011 – CX creation; 2012 CX appreciation; 2013 CX recognition…


Over the last two years, the business world has seen a transformation. A new profession has been born. A new profession has been recognised. Thousands of professional men and women all over the globe who have devoted their working lives to educate organisations to design and deliver end to end experiences that meet and exceed the expectations of customers, are finally getting the recognition they deserve. CX professionals may not be recognised in the same way that an accountant may be, or a lawyer, or a doctor, but we are getting there.

I am immensely proud to be a member of the first global non-profit making organisation to focus its efforts on the development of the profession – the CXPA (Customer Experience Professionals Association) – http://www.cxpa.org/default.asp? Bringing together a global community of like-minded professionals; sharing; mentoring; inspiring; teaching; counselling – the association is fast becoming an essential lynchpin in ensuring that customers worldwide are being thrust into the forefront of organisational strategy.

Members of the board of the CXPA recently gave their perspectives of the industry as we approach the end of 2012:

“In 2012, it has been great to see (and be part of) such increased interest by companies and professionals to enhance the customer experience as a long term, sustainable competitive advantage. It’s also inspiring to see more focus on employee engagement as critical foundational component to moving the needle on great customer experiences. And third, seeing the stronger connection between experience and financial benefits. This is an exciting profession to be part of as it continues to become more important than ever as a way of life.” – Karyn Furstman, Vice President, Manager Customer Experience at Safeco Insurance, a Liberty Mutual Company

“Customer Experience as a recognized industry is maturing quickly, and we should be proud of our growth, impact, and influence we are having on our industry, and each other. As a member of the CXPA Board, I get a unique opportunity to watch, and take part in the evolving maturity of how we measure and manage our customer experience. Exciting times ahead!” – Jim Bampos, Vice President of Customer Quality, EMC

“2012 has been another exceptional year for CX. As the global economic crisis continues to re-shape the business landscape in many nations around the world, increasing the focus on customer experience is now widely recognised as the differentiator that will create a sustainable future. Whilst it would have been preferable for business leaders to recognize this prior to a financial meltdown, CX professionals must seize the opportunity to embed customer experience strategies whilst they can. Being part of the CXPA family at this time is therefore critical to the success of our profession. The ability to share and learn from others across all industries (B2B and B2C) is key to our expertise being recognized as a genuine profession. As the CXPA develops a professional accreditation for our expertise in 2013, the future for CX professionals looks very bright indeed.” – Ian Golding, Managing Consultant, Customer Experience Consultancy Ltd

“The CX profession continues to grow in importance and relevance as companies across industries realize that a critical part of their business strategy relies on the creation and delivery of differentiated customer experiences. I would say that a challenge to the profession would be to continue to illustrate the discrete business benefits associated with focusing on CX.” – Parrish Arturi, Senior Vice President, Customer Experience at Fidelity Investments

“Forrester’s Megan Burns recently said that right now “customer experience is the ‘eat healthy and exercise’ of the business world. There’s more talk than action.” CX as a profession is on the cusp; the interest in CX is clearly there, but we need CX professionals to guide their company leaders on how to make those healthy, customer-centric “lifestyle” changes and stick to them—because, to consider customer experience the latest fad in business is to ignore the growing power of the customer, at your peril.” – Ginger Conlon, Editor in Chief, Direct Marketing News.

2013 is going to be a bright exciting year for customer experience. If 2011 was about the creating the profession, 2012 has been about appreciating what CX professionals actually do. 2013 will see the CX professional move into a world where they can achieve professional recognition for the expertise they have – now that is exciting! I very much look forward to the opportunities that we face as customer experience professionals. If you want to know more about the CXPA and how it could help you or your people, please do not hesitate to get in touch.

I would like to also take this opportunity to wish all the best for the season to readers of my blog. The fact that you are interested in the things I write means more than words can say. I hope to continue providing articles of interest in 2013. Here is to a very happy, prosperous and customer focussed 2013!!

There is nothing wrong with my business! Why sometimes we could all do with Gordon Ramsay


Have you ever watched Ramsays Kitchen Nightmares? Yes I know that Mr Ramsay is the kind of guy that people love or hate, but there is no doubting that the man is extremely talented. Many people have an issue with him due to his choice of language – but I have always admired him – and interestingly, my admiration has nothing to do with his cooking ability. Please do not get me wrong, I would love to be able to write about the culinary delights that come out of his kitchens. However, my current circumstances do not allow for me to dine at one of his restaurants on a regular basis – or any basis for that matter!!

So why do I admire him? What has Gordon Ramsay got to do with the subject of customer experience? Gordon Ramsay is a lot more than ‘just a chef’. He is a man who over the many years he has spent refining his trade, like many restaurateurs, recognised the significance of designing and delivering an experience that would keep his diners coming back time and time again. He does not tolerate anything but the best – from his people, to his ingredients, to the décor of his establishments. What is very clear is that he possesses passion – an intense burning desire to give his customers what he believes they deserve and are paying for – excellence.

Now, a man that stands for the things I have just described, and that has years of experience at delivering excellence, has a huge amount of wisdom to offer others. And that is where Ramsays Kitchen Nightmares comes in. In a TV programme that has featured restaurants in both the UK and the US, Gordon Ramsay attempts to transform struggling restaurants with his own menu of extremely frank and forthright advice – http://www.channel4.com/programmes/ramsays-kitchen-nightmares – it very much sounds like the brief any customer experience professional is given when entering an organisation for the first time. What Gordon Ramsay is essentially tasked with doing is ‘holding up a mirror’ to the owner of an establishment that is not doing very well……that is basically doing very badly.

The job of any good customer experience professional is to enable an organisation to see its own reflection – to hold up the ‘mirror’. To see the truth. To see sometimes the ‘ugly’ truth. For a business to recognise the opportunities for improvement, it first needs to acknowledge that improvement is needed in the first place. This is what Gordon Ramsay is expert at. Although his programme is somewhat predictable, it is so representative of the start of many customer experience efforts. The process goes something like this:

  1. Visit restaurant – gauge first impressions from the décor, building, surroundings
  2. Meet the staff – befriend a waitress and get her to tell you exactly how things really are
  3. Try the product – order a variety of things off the menu
  4. Clarify that the product is not very good (or’ sucks’ for my US friends)
  5. Visit the kitchen and reel off a list of expletives
  6. Chat with the owner of the business who denies that there is anything wrong with it, despite the fact that Gordon has just identified that the food tastes like it has been rescued from a dustbin, that there are live insects populating the kitchen, and that the restaurant has only had one customer for the last three and a half weeks!

Predictable or not, it is vital that this process is completed – in order for any independent expert/specialist to determine what needs to be done, they must first experience what the customer does. What Gordon does is get the credibility to provide his opinion. He gets this credibility by seeing the journey for himself. He has earned the credibility to pass his opinion as one of the most successful restaurateurs in the world. What he also understands is how personal it is to own your own business. He is not surprised that the owners of the business defend it to the hilt, irrespective of what might be the blindingly obvious.

It is not easy to have someone tell you that there is something wrong with your business. I often describe business owners as alcoholics – not a great analogy I admit. But the alcoholic business owner is the one who will not admit they have a problem. Gordon Ramsays job in his TV series is to get them to admit it. The job of a customer experience professional is to do the same. And how does Gordon do it – exactly as the customer experience professional would – by serving up the facts. Gordon’s approach is sometimes rather brutal, and a bit shocking – however, I sometimes think that his approach is absolutely right – to get people to realise the extent of the problem, you sometimes need to shock them. Once the reality kicks in, you can then start to work on the opportunities.

Ramsays Kitchen Nightmares always ends with a reformed business owner who has embraced all of Gordon’s recommendations and who is overseeing the transformation of their business. Yes it is all a bit tongue in cheek; theatrical; dramatic; but the outcome is as any customer experience professional would hope.

I think that all businesses could do with Gordon Ramsay – well someone like him anyway. Someone who has the credibility to hold up the mirror and get you to honestly appraise what you see. Acknowledging and addressing things that are wrong can only be a good thing, and I applaud Gordon Ramsay for creating and leading a TV series that does just that. So the next time you ‘have a go at Gordon’ for using a few expletives, just spare a thought for the hundreds of business owners he has helped. I am sure they have forgiven him for a few F Words!

As always, please feel free to comment on this or any of my blogs.

£2,160 a night!!! What can we learn from Claridges?


This is the iconic London hotel, Claridges. The temporary residence of the very rich and famous, it has hosted Kings, Queens and Emperors from all over the world. Built in the 19th century, it still remains every bit as beautiful as the day it first opened its doors. Claridges is currently the subject of a BBC2 documentary called ‘Inside Claridges’ http://www.bbc.co.uk/programmes/b01pbjfs. The programme is providing a wonderful insight into a quite amazing establishment. Watching the documentary made me realise that we can all learn something from Claridges – this is not just an iconic luxury hotel. This is an organisation that typifies what it means to deliver exceptional customer experiences. This blog summarises 6 things we can all learn from Claridges.

  1. £2,160 – yes, that is what you can expect to pay for the Linley suite if you booked it for two adults to enjoy a night tomorrow. Breakfast is not included, but can be added to your reservation for £32 per person. If you wanted to treat your lovely lady with some flowers in the room, you can do so for another £75. In the current economic climate, these are big numbers. There are not many people that can afford to spend this much money on overnight accommodation. However, why do people (that can afford it) spend this kind of money? Lets have a look….
  2. Attention to Detail – If there is one thing you can absolutely guarantee when you visit Claridges, it is that every tiny detail of the customer journey has been, and is continuously, scrutinised on an almost minute by minute basis. The management team walk around the hotel many times a day, ensuring that everything is as it should be. In the first episode of the documentary, we see the assistant general manager walking around the outside of the hotel. He spots a bit of the kerb on a corner of the hotel has had some paint chipped off – he radios immediately for a member of the maintenance staff – within minutes it is a sparkling white again. Nothing is left to chance. Newly refurbished rooms are slept in by members of staff to ensure that everything works as it should. Armies of people prepare for the visit of important guests. It is unlikely that you would ever find something out of place at Claridges – why should that be any different to your own organisation, or any organisation you transact with?
  3. Consistency – connected to point two, Claridges is remarkably consistent – it has to be. The Claridges customer expects their visit to the hotel to be brilliant – every time. It is not acceptable for there to be an ‘off day’ – at Claridges it seems there never is. Some of their guests have been visiting the hotel for over 40 years – now that is loyalty. Deliver a consistent experience that delights your customers and they will keep coming back – whatever the cost.
  4. Innovation – in a hotel that prides itself on tradition, you would not necessarily think that innovation is key to its proposition. However, what Claridges understands is that it must evolve to meet the expectation of the changing world around it, whilst maintaining the traditions that make it the icon it is. The very latest technologies are seamlessly and sympathetically built into the traditional surroundings almost without being noticed. This week we saw toilets that automatically heat the seat when sat upon – how cool is that!!
  5. Training – Stephen Fry was interviewed on the programme last night. Stephen made the point that patrons of Claridges are not really paying for the building or the static things that lie within it. What customers are really paying for is the attention of brilliantly trained people. Claridges seem to have a number of members of staff who have been with them for many years. They are as passionate about the hotel as their loyal customers. Claridges staff are trained to perfection. They are immensely proud of their product. They are advocates of he Claridges brand. If your staff are fans of your brand, they are perfectly placed to help their customers become the same. Fans rarely leave you.
  6. Memories – in the first episode, Claridges General Manager, Thomas Kochs, said that his objective is to ‘create at least one memory that will turn into another visit’. What Mr Kochs wants his customers to leave Claridges with is something that they will not forget. An emotional connection that will live with them and inspire them to come back again. This is something in my opinion that all brands should strive to do – if you can, you will create sufficient loyalty in your customer base that the future of your business will be assured.

There are probably more things that we can learn from this wonderful old hotel. What I do not want you to remember from this blog is point 1 – the price you have to pay to stay at this hotel is irrelevant. The fact that Claridges has existed for so long is because they execute points 2 to 5 so very very well. What a product or service is worth is down to what customers are willing to pay for it. There is no reason why a local B&B cannot aspire to do what Claridges have done – there is no reason why all organisations cannot do what they have done. One day I hope to be able to experience Claridges for myself – I may have to stick to afternoon tea for now though!

As always, your comments on this or any of my blogs are very welcome.

UPDATE – 28th January 2013

Since I wrote this blog, I visited Claridges with my wife to sample afternoon tea – it did not all go to plan – to find out what happened, read here – http://ijgolding.com/2013/01/28/can-i-offer-you-a-complimentary-glass-of-champagne-sir-now-that-is-how-to-recover-a-customer-experience/

They don’t really mean it! Are industry regulators helping or hindering the customer experience?


       

     

ABTA; Ofwat; Ofcom; HSO; Ofsted; FSA; DMA; Otelo; IPCC; PCA – it sounds like a competition to list the worlds most confusing acronyms! If you have not yet worked it out, these are in fact acronyms for some of the regulatory bodies who represent and protect the consumer from organisations who provide things like travel services, water, media, schools and financial services in the UK. I wish my budget stretched to offering a prize for guessing all of the bodies listed above – regrettably I do not – but I will be very impressed with anyone that can name this lot!! The official definition of a ‘regulator’ according to the Oxford English Dictionary is as follows:

“a person or body that supervises a particular industry or business activity”

Regulatory bodies exist to ensure that organisations within their industry operate within the law and in the best interests of their customers. They exist to ensure that you and I – the great British consumer – are treated fairly. The FSA (Financial Services Authority) famously has a programme entitled ‘Treating Customers Fairly’. We can make our own judgement as to how well they have enforced it with the banks over the last few years!! In a document entitled ‘Treating Customers Fairly – Culture’ (http://www.fsa.gov.uk/pubs/other/tcf_culture.pdf), the FSA state:

Treating customers fairly (TCF) is a cultural issue. It is only through establishing the right culture that senior management can convert their good intentions into actual fair outcomes for consumers. In our July 2006 publicationwe included an outcome on culture which states that ‘Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.’  

As firms will be aware, TCF is one of our priorities and, to be effective, they should be making it an integral part of their business culture. While we identified in our May 2007 publication  that an encouraging number of firms were at the ‘implementing’ stage of their TCF strategy, further progress is needed to reach the embedding phase. We now expect to see firms taking action to ensure a consistent delivery of fair consumer outcomes – to do this, firms need to consider their culture. The culture of an organisation drives the behaviours of its management and staff and their actions, which in turn will determine the outcomes for consumers.

Sounds great doesn’t it? We are very lucky in a democratic society to have bodies like the FSA to guard against companies doing the wrong thing; taking advantage of the consumer; that we all get treated fairly. This blog is not going to assess how good the FSA or any other regulatory body is at doing that – we will all have our own opinions and judgements. However, what I do want to explore is whether or not the fact that these bodies exist, a help or a hindrance to us as consumers.

Let me explain what I mean. I am a strong believer in doing the right thing for the customer. As any true customer experience professional would agree – the best way of genuinely embedding a customer centric culture in an organisation is to treat the customer as we ourselves would like to be treated. Create a great product or service and deliver them to the customer in a journey designed to fully meet and exceed their expectations. Be honest and genuine at all times, and do everything you can to recover a situation when the journey has not gone as expected.

How many organisations do you deal with that feel like that? Not many in my own personal experience. To be truly customer centric; to honestly put the customer at the centre of everything you do; does indeed require something that the FSA have defined in their ‘TCF’ documentation – it requires the right kind of culture. However, I believe that to embed the right kind of culture in an organisation requires the right kind of leadership. In the case of the customer experience, the right leader needs to ‘believe’ in doing the right thing by the customer – above anything else. I am not sure that any regulatory body can make an organisation ‘believe’. They can strongly influence – and apply penalty and punishment, but does that really help us as consumers?

At this point, I will ask you to use the analogy of being a small child (easy for some of us!). If your parents ask you to clean your bedroom, you might do it (because you are well behaved), or you might procrastinate and ‘put it off’. You might wait to ‘get shouted at’, or even punished by having your pocket money deferred until it is done. t is not until you ‘believe’ that having a clean and tidy bedroom is the right thing to do, that actually performing the task of cleaning it feels right. It is, and should not be about the pocket money. My wife is always telling me that we should not ‘barter’ with the kids to get them to do things – they should ‘want’ to do it. The treat of ‘no sweets’ or the promise of a play on the ‘Wii’ usually gets them to do what I ask, but Naomi believes that they should do things because they ‘want’ to, and ‘believe’ it is the right thing to do. As always she is absolutely right.

So – coming back to regulatory bodies – is this analogy of parent/child a good one? How many organisations are ‘doing the right thing’ by customers just because they are being told to? How many organisations are ‘complying’ with instruction from the regulatory body to avoid penalties? How many of these organisations really ‘believe’ that doing the right things for customers is actually the right thing to do – and would have done it whether or not the regulatory body had asked them? It is difficult to answer this question factually, but it would be very interesting to know the truth. I would suggest that using the FSA as an example, and the fact that the financial services industry has spent the last two years having to compensate consumers for the misspelling of products, demonstrates that the organisations they govern could not really have ‘believed’ Treating Customers Fairly. If they had believed, they would not have done what they did.

Using a more current example, in the UK, we are all aware of the recent exposure given to the energy industry, and the current governments attempt to ensure that we are all offered ‘the best deal’ by our energy provider. Again, the fact that the government has to even discuss the issue is a demonstration that the organisations in this industry have not pro-actively thought about offering customers the best deal. So, due to the exposure, organisations in this industry are mobilising to act on what the government and regulator is asking them to do. One of the companies who has acted is e-on – one of the UKs largest energy suppliers. On their website they say “We want to be a company people can trust and are always looking at ways to make energy cleaner”. Can they be trusted? They have recently launched their ‘best deal’ – a way for all customers to find the best deal ‘in the time it takes to make a cuppa’.

They have sent a letter and marketing communication to all customers – I have been given a copy of one received by a friend in November. ‘Helping you find our best deal for you’ – says the headline in big orange letters. ‘We’re changing the way we do business..’ says the opening line. A nice glossy A3 leaflet is enclosed detailing their tariffs; rewards for staying with e-on; and information on how to find the best deal either online or by phone. It all sounds great – yes I could be pedantic and ask what has driven them to ‘change the way they do business’ – but you will know what my conclusion will be – it was probably not of their own making.

My friend decided to phone them to get more information – the number 0333 202 4680 is emblazoned on the letter and leaflet. They called the number 7 times at the beginning of December – on all 7 occasions, they were met with an automated message that said – ‘the other person has hung up’ – 7 times!! I have just tried to call the number – I was met with ‘due to a building evacuation, we are unable to connect your call’ – I kid you not!!! Are they really serious at helping customers find the right deal? Yes, I could go online, but I do not want to – I want to speak to someone – in e-on’s case, this is not possible.

Whether my friend and I chose a bad time to call e-on is irrelevant. If organisations want to do the right thing by their customers, they must proactively design and deliver a customer journey that meets and exceeds customer expectation – they should not have to wait to be shouted at by an industry regulator. The fact that regulators have been in the headlines so often highlights the fact that too many businesses are still not doing the right thing by themselves. Are regulators a help or a hindrance? Without them we would be in a bit of bother at the moment, so by that token, they are a help. What we desperately need though is for organisations to stop waiting for their regulator to spot them doing things wrong. In an ideal world we would have regulators showing us all what their businesses are doing right – now that would be quite something, wouldn’t it?

As always, your comments on my blogs are very welcome.

Who cares about ethics – Starbucks do now!! Never underestimate the power of consumer opinion


Unless you are living in a cave (or somewhere outside the UK), you will have noticed that a number of extremely well-known brands are getting a little bit of exposure at the moment. Google, Amazon and Starbucks are three multi national giants who have been ‘highlighted’ as not having paid ‘enough’ Corporation Tax in the UK. This is not a blog that is going to question the rights or wrongs of any organisation’s tax strategy. I am neither qualified nor intelligent enough to start advising on tax related matters! What I am going to discuss though is the effect that issues like this can have on the consumer, their behaviour, and ultimately the organisations in question.

I must start by pointing out that none of these organisations have actually done anything wrong – in the eyes of the law. They, along with their specialist accountants, have designed financial strategies to benefit their shareholders. They would probably argue that these strategies also benefit their customers and employees. The more financially stable an organisation, the more able it is to grow, thus providing its customers with ever better products and services, and its employees with stable and secure jobs. We can all be certain that businesses have been doing this for years!

However, as we all know, the world today is a very different place for a multi national corporation. The consumer has access to information that they would never have had the opportunity of knowing as little as ten years ago. Fuelled by the press, we now have up to the minute insight into the way businesses are performing and behaving. It is this insight that has led to the consumer becoming very interested in the ethical nature of businesses, whether they transact with them or not.

The ethical nature of businesses is actually nothing new. The Body Shop, for example, was launched by the late Anita Roddick in the 70’s. The environmentally minded brand was at the forefront of a revolution that saw many consumers wanting to look after their planet. When you think of the ‘green’ movement today, it is clear how advanced Anita Roddick was – giving the consumer what they wanted in a way that protected what is important to all of us. Creating an ethically based proposition was hugely successful – but in the case of the Body Shop, it was done pro-actively. They were not an existing brand that waited to be told that they way they made products was damaging to the environment. They did not wait to be told they were ‘unethical’. Anita Roddick wanted to do the right thing, and as a result, she created a brand and products that were part of a customer experience that the consumer could connect with – FUNCTIONALLY and EMOTIONALLY.

The Body Shop is not the only example. The Co-Operative Group is an organisation that places great importance on ethical and transparent trading. They have won numerous awards and recognition for the ethical nature of the way they do business in the all the sectors they serve. Just recently, the Co-Op’s energy business reduced prices – here is what the website myfinances.co.uk said about them (http://www.myfinances.co.uk/cut-your-bills/2012/11/18/co-op-shows-that-you-can-cut-energy-prices-during-winter)

Although the Co-op only has 60,000 customers this is set to change, according to analysts in the energy market.

Tom Lyon, energy expert at uSwitch.com, says: “This move suggests that the Co-op is serious about putting ethics back into the energy market – by cutting its prices, even by as little as 2%, it is sending out a clear message that not all suppliers are the same.”

The electricity price fall will apply from December 21st and means that the Co-op’s annual dual fuel average energy price is £1,143, £191 cheaper than the new average dual fuel price of all of the suppliers after the recent price increases.

The Co-op is a new entrant into the energy market and aims to challenge the hegemony of the “big six” by offering just one price and by freezing its prices until April 2013.

By cutting electricity prices it means the Co-op’s overall energy tariff is cheaper this winter than it was last winter.

It aims to try to entice new customers by offering a different approach to the established energy companies.

Tom Lyons added: “By differentiating itself from the traditional suppliers the Co-op should be able to attract consumers that are fed up with the big six and want to try something new.

“A more ethical approach and good customer service go a long way to winning people over, but attractive prices will see the trickle of new customers turn into a flood.”

The cut in electricity costs by the Co-op will reduce the annual bill by £23 a year.

However, another aspect of the Co-op’s pricing and billing strategy is that it does not offer discounts for customers who pay by direct debit. This is unusual in the utility market these days.

It means that the Co-op does not offer the cheapest tariffs on the market and is more of an advantage for pre-payment customers or people who usually pay their bills by cash or cheque. These customers will not miss out on any discounts with the Co-op and means that the Co-op is cheaper than all of the “big six” energy firms for these type of customers.

The Co-Op have recognised that by doing the right thing for your customer, morally and ethically, it is likely that more consumers will want to transact with them. A straw poll that I have conducted with friends and colleagues is suggesting that people think very highly of Co-Op as a brand. One person said to me that even though their supermarkets are not as good as the ‘big boys’ they feel good about shopping in one.

The Body Shop and the Co-Op are legally behaving in exactly the same way as Google, Amazon and Starbucks. What they are doing differently is perhaps to do with morals and ethics. In a world where there is so much choice, differentiation by any means is vital to connecting with customers. Behaving in what is considered a moral and ethical way, connects to the EMOTIONAL customer experience.

Google, Amazon and Starbucks are now being seriously challenged by the ‘moral debate’. Despite doing nothing legally wrong, they are being attacked by consumers who believe they are behaving in an unacceptable way by not paying what is perceived to be ‘their fair share’ of taxation in the UK. This perception is now fundamentally damaging their brand. This in turn is tainting their customer experience. Starbucks for one is a brand that delivers a strong, consistent, customer centric experience. But by not dealing with the ‘moral debate’ quickly and effectively, the experience is in trouble. What customers are now recalling in the EMOTIONAL element of the experience with Starbucks is not the taste of the fantastic Christmas coffee creation, but the sour taste of immoral behaviour. It is ironic that a brand who has been a keen supporter of the ‘Fairtrade’ movement is in this predicament.

Starbucks have now announced that they intend to pay more tax in Britain – how chivalrous of them. Have they made this decision because they want to do the right thing? Or have they made this decision because customers have started to ‘vote with their feet’? Amazon and Google have not announced anything – will customers stop interacting with them as well? It is not just about these three US-based organisations either. I heard an interview this morning with the boss of TUI – they were reporting strong financial results. ‘I have noticed in your latest results that you have not paid any corporation tax this year’, stated the interviewer. The TUI CEO was noticeably shaken – eventually trying to explain how Corporation tax works. Unfortunately for him, and all business leaders in the UK at the moment – whether you are right or wrong, you now have to determine if what you are doing will be deemed as ethical. Failure to do so can damage your brand and customer experience!

For years, too many businesses have done what they think is right – for their shareholders. We now live in a world where unless you do what is right for your shareholders, customers and employees in equal measure, your brand and the experience the brand delivers can be compromised. I am sure that the brands being put in the spotlight at the moment will recover – their brands and the experiences they provide are very strong. What I do hope though is that this episode highlights the importance of being honest and transparent in business. Let’s see the good guy winning through from now on, whilst the bad boys falter in the shadows.

As always, your comments are very welcome.