Customers; Colleagues; Shareholders. Which one should your business put first?

At first glance, the title of this blog post may seem like a simple question. In fact, the order of the three key ‘stakeholders’ responsible for delivering customer experiences naturally exploded from the keyboard in the order that you see them. Does that mean that ‘Customer 1st’ is the right answer? If it is, this could be my shortest ever post! As you may well agree, the answer is in fact not that simple, and hence I believe it requires some exploration.

In my experiences as both practitioner and consultant in the world of customer experience in a number of organisations across different industries, there has rarely been a consensus. Customer, colleague or shareholder? Colleague, customer or shareholder? Colleague, shareholder or customer? Shareholder customer or colleague? It does not matter how many times you play about with the order, the answer is still not that obvious – so let us have a look at the merits of each stakeholder taking the place of ‘Number 1’ in turn:

Lets us start with the good old customer. The group of people who in commercial organisations ‘pay our wages’. Without our customers, we would not have a business – so surely the answer to the question is obvious after all. Businesses must put Customers before anyone or anything else. Even in non commercial entities, the organisation would not exist without the recipients of the services they provide – there would be no need for them to exist otherwise.

Putting any ‘stakeholder’ first means that the organisation must act in a way that the chosen stakeholder is put ‘at the heart of everything it does’ – every decision that is made is done so considering the effect on that stakeholder before anyone else. For a business to put the customer 1st, it must demonstrate this – I do not know of many businesses where this is genuinely the case. Do you know of any businesses that genuinely and honestly ‘put the customer 1st’ – before anyone else?

I used to work for an organisation that for a long time ‘branded’ it’s approach to customer experience ‘customer 1st’. For a while that felt right. However, despite the fact that we were transforming the way we thought about customers; treated customers; delivered experiences to customers; we were not making decisions THINKING about customers before anyone else. What we needed was for ‘customers’ to be part of the conversation – They were not on day one – they were very much ‘last’ – but is it right for customers to come first?

Let us consider the case for ‘colleagues’. Less personal organisations refer to the hard-working people who deliver experiences to customers as ’employees’. By the same token that an organisation would not exist without customers, it is also true to say that it would be rather difficult without people to serve them. I have always believed that colleagues are the most important asset for any organisation. However advanced technology becomes, or mechanistic processes evolve, we will always need people to deliver customer experiences.

I am a huge advocate (as many know) of a principle developed by O2 (Telefonica) during the ‘noughties’. They developed the O2 ‘fanbook’. They believed that they needed their customers to become fans of O2. In order to achieve their desire, they wanted colleagues to become fans of the customer. To be a fan of the customer, the organisation recognised that O2 colleagues needed to be fans of O2 themselves. This is a principle that makes so much sense. If your own colleagues are not fans of your brand, how can you expect your customers to be? Think about it – if your own staff do not like what you do – why would your customers? If you have never seen the O2 fanbook video – have a look at it here – http://vimeo.com/11352779

Let us consider this question – if you put your customers 1st, are you at risk of your colleagues not being fully engaged with your business and brand(s)? Are you at risk of your customers loving what you do more than your own colleagues? If your customer is being served by a colleague who is less engaged with the brand than them, is that a good thing? This is why I know of many organisations who believe in the ‘Colleague 1st’ principle. They believe that if you put your own people first, then the customer experience will look after itself.

Before you decide what you think the answer to the big question is, let us look at the third key stakeholder – the shareholder. This is the group of people the colleague ‘loves to hate’. Maybe not just the colleague – over the last few years, the consumer has increasingly become frustrated by the perceived greed of shareholders putting their interests before anyone else. Indeed I have been involved in organisations where it seems that the only voice that is being heard is the one that is only concerned with the spread sheets – the top and bottom line.

Profit, profit, profit. Cost, cost, cost. The words often associated with shareholders – but is it wrong for the group of people responsible for funding, investing in and directing an organisation to focus on the important numbers? I must admit, I find this the most difficult of the three corners to fight for. A shareholder would argue – in much the same way customers or colleagues would – that it is only right that the interests of shareholders comes before anyone else. The shareholder enables a business to exist – they invest in improving, growing and sustaining a business. Without shareholders, many organisations may not be financially viable. The risks and pressures associated with shareholdings should be rewarded by having the loudest voice.

So it is decision time – Customer, Colleague or Shareholder – which one do you think your business should put first? If you want my opinion (which you may not!), I am about to do something I do not often do – sit on the fence!! Whilst it may be easy to completely dismiss Shareholders in favour of either Customers of Colleagues, I actually believe that it is important for all three stakeholder groups to be at the ‘top table’. I strongly believe that all three voices must be heard in equal measure for an organisation to be successful – and for an organisation to stand the best chance of delivering brilliant customer experiences by highly engaged colleagues supported by enthusiastic and rewarded shareholders.

A concern for any organisation should be when one voice becomes significantly louder than any other – or if one or more voice is not heard at all. Organisations need to understand that when a decision is made, the impact on all three stakeholder groups MUST be considered – openly and honestly. All three stakeholder groups must be represented equally around the board table, and the consequences on each of them carefully considered by the decision makers. If Customers, Colleagues and Shareholders can live in harmony together, our businesses stand a fantastic chance of existing for ever!

What do you think – I would love to hear your point of view.

‘I have an idea – lets outsource customer services’ – Could the quest for cost savings damage the customer experience?

Disclaimer!! Let me start this blog post by acknowledging that the subject is going to be controversial. There will be readers on both sides of the debate – that is healthy, and I hope you will get involved.

In May, O2 announced their intention to outsource their contact centre operation to Capita. The main reason cited for the move was to save a billion pounds over the ten-year life of the contract. A billion pounds! It has been reported that half the savings will come from “discouraging calls, web chat and encouraging customers to use self-service option online. Sending jobs overseas and closing sites will provide a third, with the rest expected to be derived from productivity gains”. You can read more about it, and the reaction of staff and unions here – http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/telecoms/10087909/Capita-plans-to-close-O2-call-centres-and-cut-thousands-of-jobs.html.

So what? It is not uncommon for organisations of all shapes and sizes to outsource their customer service function to well established ‘experts’ like Capita. Many businesses have hugely successful relationships with specialist outsourcers over many years that see desired costs savings and improvements in service to customers. I am sure that readers of this post will want to share some examples.

However…..you knew that was coming…….the decision to outsource one of the most significant parts of your business is a very difficult one – and one that is not necessarily made with the right motivation in mind. In all of the articles I have read about the O2 Capita deal, not once have I read anything that talks about the customer. O2 has millions of them. Not once have I seen anything that describes the benefit of this huge decision on the millions of customers that have been loyal to O2 for a very long time. The only references made are in the guise of making life easier for O2 by ‘discouraging’ the use of the telephone, and ‘encouraging’ customers to ‘help themselves’. There is no doubting that enabling customers to ‘self-serve’ is an ambition of most companies – but it is a big risk to do it in a way that prevents the customer from being able to choose the method of contact that they prefer.

The motivation for the O2 Capita deal seems to be financial – although that could just be the way it has been reported. It is a deal that is designed to generate savings that will benefit shareholders. The primary motivation does not seem to be linked to improving the customer experience. Do not get me wrong – I completely understand the need for companies to continuously improve their efficiency and productivity. Tightening belts is essential in the current economic climate. In the world of customer service, that often means businesses must re-evaluate the effectiveness of the business model. As the online/mobile world continues to evolve, the nature of the service function required to support it must do as well. It is therefore a sad but factual reality that if more customers are doing things without the need to speak to a company, that company may not need as many people sitting waiting to help. Leveraging the technology and capability of specialist outsourcers like Capita makes a lot of sense. That is why I have nothing against the principle of outsourcing – as long as the motivation has a dual purpose – improving customer satisfaction BY becoming more efficient and effective, thus realising cost savings.

Before I continue, let me dwell for a second on the company itself – not Capita but O2.

People forget that O2 used to be BT Cellnet. Remember them? Cellnet became BT Cellnet in 1999 which became O2 in November 19 2001. At the time BT Cellnet was rapidly losing market share to its rivals (Orange and Vodafone). Those that remember them will not provide ringing endorsements of their customer service capabilities!! Over the following few years, the company enjoyed what can only be described as an amazing transformation. It grew at a rapid rate, and was acquired by Telefonica in 2005. By 2007 the company had over 18 million customers in the UK. In 2008, O2 was ranked as the sixth best company to work for, and was awarded a three star accreditation denoting it ‘an extraordinary company’. In 2008, as Group Head of Customer Experience for an online retailer. I frequently cited O2 as an example of what we could achieve. I used O2 as benchmark – I know that others did  as well.

Interestingly, when investigating O2’s history, the page on their website that provides the detail stops there. It is almost as though 2009 to the current day did not happen – http://www.o2.co.uk/abouto2/history In 2008, I visited one of O2’s contact centres in Leeds. It was very impressive. Great facilities, brilliant layout, clear communication – the place was literally ‘buzzing’. I was introduced to their by now renowned approach to people. O2 believed that to have happy customers, they had to have happy staff. They even took it a step further. They believed that for their customers to be fans of O2, they first had to get their people to be fans of O2. It makes perfect sense – it is not complicated, but at the time it was revolutionary. Internally, they communicated this to staff through the O2 Fanbook. You can see the video of the Fanbook here  – http://vimeo.com/11352779

It was amazing to see for my own eyes a modern, innovative business that was genuinely so people and customer focussed. Their people loved them, and in turn, customers learned to love O2 as well. The days of BT Cellnet were long forgotten. O2 started to eat up the competition, and all was very rosy.

So why has a business that believed so passionately in the importance of people decided to outsource a huge number of the  to another organisation? What has happened since 2008 that has resulted in the company putting the responsibility for communicating directly with their customers in the hands of someone else? It is impossible for me to answer these questions – only those on the inside can say for certain. But it does seem as though a company that succeeded by putting people and customers first, is now potentially doing the opposite in the quest to ‘save money’.

When you think about the organisations you know of that have outsourced a part(s) of their business, it is very likely that the ‘contact centre’ is first in line. The question is why? Why would a business outsource the function that is often THE ONLY ONE that actually speaks to customers? Customers who generate the sales that creates wealth for shareholders. Customer service is fundamentally a critical stage in any customer journey. By outsourcing this stage of the journey to another company, you are immediately making it more difficult for the delivery of the journey to live and breathe the proposition of the business. Why are companies so quick to outsource customer service when they would never dream of outsourcing their marketing team?

Let us look at another example. Most retailers outsource another critical stage of their customer journey. For online retailers, it is the only stage of the journey that the business has direct physical contact with the customer. That stage of the journey is the ‘delivery’ stage. Whether it is Royal Mail, Hermes, DPD, or DHL to name but a few, the retailer is handing over one of their most important customer touch points to someone else. The company that has been fortunate enough to be granted the honour of making the delivery has a very important job to do. Not only do they need to fulfil the customer expectation by getting the goods to them on time, they also need to maintain the brand values of the company they are working for. Most John Lewis deliveries are done by John  Lewis – they can guarantee that the delivery service is in line with the in store service, the online service, the telephone service. They, up to now, have not handed this over to someone else. It is far more difficult to do when you put a touch point in the hands of a business that does not live and breathe your brand. Again, it makes economic sense to use specialist logistics carriers that have the size and scale to deliver to all corners of the country – if the economic benefits are balanced by customer experience improvements, then an outsourcing partnership CAN be very successful.

If the outsourcer fails to maintain the brand ethos of the company they are working for, it is most likely that brand that will suffer. If a retailers delivery does not turn up on time – it is the retailer that suffers (as a result of declining customer perception) – not the delivery company. Using this as an analogy for the O2 situation, it will therefore become a significant challenge for O2 to maintain the consistency of their brand when they handover the keys to Capita. It will become Capita’s responsibility to ensure that the employees working on the O2 contract continue to live and breathe O2. It will be Capita’s responsibility to ensure that they keep loyal fans of O2 in their contact centres (wherever they happen to be in the world), so that they in turn can help to keep the loyalty of O2’s customers.

As I said earlier in the post, this is not an impossible challenge – but it is a difficult one. The customer does not need to know that the contact centre they are interacting with is managed by someone else – they should never notice the difference. Hopefully in this case they will not. It would therefore be nice to see what the plans are to ensure that both people engagement and customer satisfaction will improve. It would be nice to know that both of these critical things are equal to the objective of saving 1 billion pounds.

It would be great to hear from outsourcing professionals and their views on this. What are the ways you embed the values of the brand you are serving? How do you get your employees to feel that they are working for the brand as well as for the outsourcer? What examples are there to demonstrate how improving customer experience and delivering cost savings go hand in hand?

I wish O2 and Capita the very best of luck. I hope that they can continue to be an example to others of how to collaborate to deliver better, more efficient customer service. Fingers crossed.