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In this issue:
From 'push' to 'pull' - changing the paradigm for CRM
Why is service costing more?
Six Sigma - an insider's view
Alison Abbey joins Vanguard
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From 'push' to 'pull' - changing the paradigm for CRM return to top
A new article on CRM - customer relationship management has been up-loaded to:
http://www.lean-service.com/6.htm
CRM is just one example of how organisations sometimes try to use computers
to do things that people are good at (and computers are not).
***
Why is service costing more? return to top
UK recipients of this newsletter may have listened to a recent In Business
programme (radio 4) on customer service. The question posed by the
programme was: 'What is going wrong with customer service?' As companies
spend more on service, service is getting worse. The exemplar of the new
customer service organisation - the call centre - was questioned as to its
value; interactive 'computer' service - dial 1 for this, 2 for that, was
parodied as an example of what really frustrates customers.
So what did we learn about the pundits views of the service problem? A
customer service consultant told us we must invest in people and training
for the long term. A strategy consultant told us we must choose the right
people for service roles and we should design the service we aim to
provide. In comparing British Airways and Easyjet, he argued that the two
are dissimilar in as much as they aim for 'different market segments'. This
amazes me. As a customer of both, I cannot understand this; surely they
have both gone for the same market - people who want to get somewhere.
The service matters whichever airline I fly with, and that centres around
the convenience and cost of flying with them; whether we fly and arrive on
time; how people treat me in general and how the organisation behaves when
something has gone wrong. And I have to say I have experience of both
organisations when things have gone wrong.
When the programme turned to a local authority, an amazing thing occurred.
The local authority had hit upon this remarkable idea: they would answer
customers' questions at the point of transaction. If someone called up with
a question, it would get answered or it would get sorted and the person who
took the issue from the customer would call the customer back. Wow!
So how did the commentators respond to this? By suggesting this is
dangerous! After all, ran the argument; this may raise customers'
expectations. They missed the point. The point is very simple - the costs
of service are all associated with getting it wrong. The high costs being
experienced by call centres are to do with the fact that they handle a high
number of calls that I would call 'failure demand' - calls caused by not
doing something (or not doing something right) for the customer.
Alarmingly, many companies that have out-sourced call centre work pay for
their suppliers to handle 'failure demand'. To use a Japanese term, their
suppliers are eating their waste, and they are paying for the privilege.
The real costs associated with interactive 'computer' service are the
customers who drop out because they cannot find the thing they want and the
customers who mis-route themselves ('silly people'), because they don't
articulate their problem the way the company does.
My bet is that the local authority could teach these consultants a thing or
two. The cost of service reduces only as you get it right. You cut out the
major cost - waste. Simple, but beyond the grasp of most managers. For
managers treat their service organisations as factories and they believe
that 'the people are the problem'. This is wrong. It is the way work is
designed and managed that is the problem and that is the responsibility of
management. Service costs are rising because of the way managers think and
work.
***
Six Sigma - an insider's view return to top
I have listened to two presentations by Six Sigma consultants and my
impression of Six Sigma is that it is 'Quality training on steroids' I
should point out this is an interventionists view.
To explain this briefly:
The intervention is rational - assess the scope for change, train your
people, do projects. The difference between a traditional quality programme
and Six Sigma is only a matter of degree - Six Sigma training is more
extensive, there is a stronger infrastructure and there is closer project
management.
Six Sigma plays to the current management paradigm, it suits a 'command and
control' mentality. Because of this it is doomed, for world class
performance begins with world class thinking and that requires a
fundamental shift in thinking. Such a shift will not be achieved through
training interventions.
So it came as no surprise when I was sent the following e-mail from a friend:
>>I was talking to a lady engineer yesterday who used to work for XX (an
organisation well known for promoting Six Sigma) and still has friends there.
She told me that many XX employees HATE Six-Sigma because:
1. It targets cost reduction exclusively and more and more cost reduction,
year on year, is being demanded from all departments. If you sack a member
of your staff this year the saving goes into your pot and you must therefore
further increase your cost reduction next year.
2. It is elitist. Only 'specialists' (e.g. Black and Green Belts can do it).
3. These specialists run around saying 'Look at all this training that I
have received'. Other staff respond with, 'How much of it have you actually
used?'<<
***
Alison Abbey joins Vanguard return to top
Alison Abbey has joined Vanguard. She was previously with Microsoft UK and
gained a reputation for innovation in pre-sales and sales service design.
Alison first began using Vanguard's methods six years ago. She has
extensive expertise in designing service, beginning from the principle of
designing against demand. In the last few years Alison extended this work
in to changing the way relationships were managed with customers. Alison is
a great advocate of 'pull' not 'push' in service and relationship design.
We are delighted that Alison has joined us.
***
Lean Service Conference - October 24th 2000
The conference where Vanguard clients talk about the what, how and benefits
of lean service. For information, go to: http://www.lean-service.com/home.htm
***
Downloaded from www.lean-service.com - improve service and cut costs
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