Introducing the Concept of ‘Customer Effort’

The education industry is changing. Industry dynamics are shifting and traditional operating models are being challenged. Competitive pressures and rising customer expectations are forcing organisations to look for ways to improve productivity and reduce costs in certain areas to fund investment in other areas. Invariably, shared services and support functions are a key productivity focus, as the sales and marketing machine is fuelled to battle rising competition. A drop is service quality is never acceptable, so is it possible to actually improve your support services (in line with rising customer expectations), whilst decreasing your operating costs? We think so…

Measuring operating costs is relatively straightforward for most businesses. Measuring the quality of support services proves far more challenging. Some organisations rely on syndicated surveys, other use Net Promoter Score (NPS) or Customer Satisfaction Index (CSI) for quality feedback. Some organisations have no form of customer-based feedback.

Corporate Executive Board (CEB) conducted extensive research to understand the role of customer service in driving customer loyalty. CEB’s findings are highly relevant to universities and offer an alternate, inexpensive approach to solving this ‘quality up / cost down’ problem.

Here are a few things to think about…

#1 Focus on Reducing Customer Effort

CEB found that service organisations create loyal customers by making it easy (and quick) to resolve their problems. Hardly a startling insight, however they went on to discover that service organisations have four times the influence over disloyalty, as compared to loyalty. Put another way, customers are four times more likely to leave an interaction with a service organisation disloyal rather than loyal. This finding suggests organisations should focus on mitigating disloyalty, rather than developing loyalty, and the best way to mitigate disloyalty – is to reduce customer effort.

This makes sense – right? To keep your customers happy, make it ‘easy’ for them. Make it easy to contact you, make it easy to resolve a problem, make it easy to find stuff online. Reduce effort for the customer.

Here are some examples of what causes customer effort:

• Having to make repeated contacts to get an issue resolved
• Needing to ‘switch channels’ e.g. to go from the support section of a website onto the phone
• Being transferred to another operator or department
• Repeating information already provided
• Taking a long time to resolve the issue
• Difficulty contacting the organisation such as long wait times and convoluted phone menus – “Press #1 for accounts…”
• Endure rigid internal policies and procedures

Any of those sound familiar to you???

Here is a recent ‘channel switching’ experience of mine. The Energy Australia chat pane proactively popped up and prompted me to ‘chat’ whilst I was on the Service section of their website.

#2 – Capitalise on the Consumer’s Desire to Self-Serve

There is a massive shift in terms of customer service preference. Organisations significantly over-estimate the importance of the phone channel and underestimate the customer’s desire to self-serve via the web. A conservative estimate is that 2 in 10 customer service contacts can be avoided. It should be straightforward to reduce customer service contacts, by allowing customers to self-serve online.

Here a self-service example from another industry..

Compare the check-in process at the airport, compared to 10 years ago. No more lining up like cattle waiting to check in bags and get a boarding pass. Now I check in on my mobile and walk straight to security. No need to get a boarding pass – that’s on my phone too. The airlines have used technology to improve customer experience whilst at the same time reduce the cost of delivering the service. Universities have a similar opportunity.

#3 – Marketing and Customer Service Really Need to Talk

One of our clients has discovered that 30% of all customer service contacts can be resolved via self-service, with only a modest investment in content development and process automation. Traditional organisational structures and responsibilities often inhibit progress. Marketing as a function typically owns the website and its content and they are all too often disconnected from customer service functions.

Do Not Accept the Status Quo

I spoke to a marketing executive last month, who acknowledged that a specific interaction between the students and their university was appalling. They then dismissed it as acceptable because ‘it was in-line with what other universities do’. That attitude perpetuates the status quo and is dangerous in an increasingly competitive market. If he dismissed it because of other priorities – I would have understood.

Universities are making a lot of progress by embracing new technologies in the classroom, but there is still so much opportunity to improve the student experience outside the classroom. If you want to make it ‘EASY’ for your customers, start focusing on identifying and reducing customer effort.

It is not that hard, it just takes some leadership and focus…

Your University’s systems and processes are failing your students

“Email is for old people.” – My (then 15 year-old) niece in 2007.

Technology in today’s Higher Education environment isn’t meeting the needs of our students. There are a number of challenges with technology solutions inside and outside the classroom.  I’m particularly concerned about the administrative systems – the ones that require students to fill out paper forms and stand in queues to be stood in.  Here are three problems I think are contributing to this issue.

1. Most technology is built from the inside – out

I recall a conversation (very recently), at one of Australia’s top universities, where the leadership team specifically forbade the IT team from using any form of communication with students other than their ‘official’ student email address.  They weren’t even allowed to ask the student if they would prefer any additional means of communication (such as opt-in use of mobile for notifications).

This is a classic example of inside-out thinking.  The logic, as it was explained, is that the ‘official’ method for communicating with students is via the ‘official’ email address.  And, my personal favourite, “we’ve just spent 3 years training students to know that!”  So, there was a higher priority placed on the internal view (what the university wanted) than the outside view (what the student wanted).

Imagine how you would feel if you called a company that you were a customer of and asked if they could just keep you updated on their services via text message, only to be told, “I’m sorry, we will need to send that out to you in the post or via fax.”  Yet this is effectively how we are treating students.  And this is just one glaring example, there are many more.

What can you do?  Find out how students really want to be engaged.  Give them choice.  If you need the ‘official’ channel as a fallback, then use that too.

2. Systems aren’t connected

Technology integration challenges are not new.  Every large organisation has systems that don’t ‘talk’ to one another. Oftentimes this is because it’s too hard or not seen as a priority, with focus/attention given to the functionality of the system rather than its’ integration with other platforms.  However this causes real end user issues.  Students (and staff) end up having to be the integrators of data between one system and another.  Ever seen someone pull up an application, diligently write down info on a post-it note so they can enter that same information in another system?  This is an integration problem.

This disconnected application environment results in disjointed engagement with students and an increased burden on students (and staff).

How do you make it better?  Assess the data needs over your students and staff, not just their functional needs.  We’ll never get away from multiple applications so let’s integrate the data to make them more useful.

3. Assumptions, Assumptions, Assumptions

I’ve written previously about the need to ‘talk to customers’ and it’s one of my core principles in development.  It’s such a simple thing to do.  So why don’t more people do it? Well, I think because it’s easier not to.  Universities love to ‘survey’ students but rarely seem to simply engage them about what systems and processes would make their lives easier.  Perhaps this is because academically, we aren’t (and shouldn’t be), inclined to make it easy for students.

Thankfully I see this changing at a number of universities and I’m excited about what the future holds for this sector. Technology, properly integrated and implemented, can reduce the administrative burden on students and make life just a little bit easier.

After all, don’t we want them expending their effort on the learning aspects of university life rather than the admin?

Focusing on removing the administrative burden from students and staff and automating processes wherever possible will go a long way to making universities more efficient, and students happier with the experience.

Please let me know if you agree, disagree or think I’ve completely missed the mark with these ideas.

If you think these tips might be useful to people in your network feel free to share below.

5 Transformation Principles to Improve Service Experience and Productivity

“It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.” – Niccolo Machiavelli, The Prince.

Organisational transformations are hard.  Here are five principles that I have found useful in the transformations I’ve been a part of.  Hopefully they are useful to you.

1. Don’t be ‘allergic to the truth’

Are your executives allergic to the truth?  This is one of the questions I like to ask when starting a transformation project. Oftentimes the response I get is either a blank look, a ‘what do you mean?’ or both.  In my experience in running transformation projects across a number of industries, the single biggest factor in successful change is whether or not the executive sponsors and their peers genuinely understand the current operation and can see the opportunity that successful change project presents — and are willing to openly discuss it.

Rarely have I found organisations that are operating so efficiently and effectively that their ‘transformation’ projects are simply about making things ‘even better’.  This may be your experience, but it hasn’t been mine – there is typically a problem to solve.

Recognising there are problems with the way you are operating today is paramount to enabling your transformation projects to be successful.  If your organisation truly wants to change, you must first understand what is not working well and why.
Interrogate reality and don’t be allergic to the truth.

2. Get crazy – talk to customers

I learned a very valuable lesson early in my career as a software engineer. Simply this: you must know your customers and their needs if you are going to solve their problems.  There is a very simply way to do this — talk to them.  Genuinely connecting with your customers decreases a risk that a lot of organisations face — assumption-based design.  Understanding your customers and talking to them regularly allows you to implement a much better approach to problem solving — fact-based design.

Two wonderful tools to help you get insight from customers are Net Promoter Score and Customer Effort.  Net Promoter allows you to find out if you are meeting customer expectations while Customer Effort allows you to better understand how easy (or difficult) you are making it for your customers.

Considerable research has been completed in both these areas and these tools are really useful for organisations trying to be more customer-centric.  However, I still believe nothing can take the place of the old-school tactic of actually talking to real, live, breathing customers.

3. Only automate what you can’t eliminate

Peter Drucker said it best when he said, “There is nothing so useless as doing efficiently that which should not be done at all”.

Identifying waste in existing processes should be one of your first pieces of analysis.  There are a number of tools to help and when it comes to identifying waste, Lean Six Sigma is one of the best.  Lean Six Sigma has defined the 8 wastes.  Many times we don’t even need a tool to help us identify waste — sometimes it’s blindingly obvious.   However, I still find the Lean Six Sigma tools useful to help quantify the waste and to communicate (sell) to senior stakeholders.

4. Renovate or rebuild?

Have you every bought a house that was a ‘fixer-upper’ or know someone who has?  You (or they) are faced with a serious question — renovate or rebuild?  If your house has a strong foundation, solid plumbing/electrical and a good layout — then renovation may be your best bet.  However, if you’ve simply got a great location, a wonderful yard and lots of potential — it’s likely time for a complete re-build.  It’s no different when it comes to your organisation’s processes.

Incremental process re-engineering is useful when you have a well-managed operation and need to achieve a 5% to 10% quality or productivity uplift.  If this is your situation then go with the renovation (re-engineering) option.  Look at applying Lean Six Sigma fundamentals to your operation and you should see your 5-10% improvements steadily start to appear.

But if you are looking for a much larger improvement and a greater outcome in productivity uplift, it is probably time to consider a bottom-up re-design.  This is when you need to reach for the Design Thinking tool in the toolbox.  Design Thinking is the creative application of scientific principles to design or develop structures, machines, apparatus, or manufacturing processes.  This approach will allow you to develop completely new processes and solutions.

5. Believe in the ‘AND’

It’s easy to find yourself thinking that in order to improve service for your customers you need to spend more money.  While this may be true, it is also true that providing a better experience for your customer can also be more efficient for your operation.  There are countless examples of this in our daily lives.  Old innovations such as ATMs provided a better service when they were introduced AND reduced the operating costs for banks — and now mobile banking is doing it again.  Amazon.com has revolutionised retail, driven a much better experience for its customers AND has a very high operational efficiency.

Typically this result will come from focusing on both process efficiency AND automation.

I believe getting your executive team on-board and genuinely interested in the facts, talking to your customers, eliminating waste, deciding to renovate or rebuild and believing that you can deliver both an improved service AND increased efficiency are essential to driving transformation in your organisation.

Please let me know if you agree, disagree or think I’ve completely missed the mark with these ideas.  I have been wrong before and I try not to be allergic to the truth.  🙂

If you think these tips might be useful to people in your network feel free to share below.

Strategy + Execution (in that order)

It is regularly proven that genuine, long-term business success is driven by ‘execution’.  A lot has been written about the execution imperative over the past few years.  Execution is everything.  Well, almost everything.

Execution without context is a dangerous path.  This is especially true for large organisations.  I have seen a number of big organisations flounder in execution, not because of a lack of investment, motivation, or competent staff.  But because the on-the-ground teams found it difficult to make decisions without the context of a clear strategy.

Context is king.  My background is in software engineering and IT architecture.  I love models.  I love design. I love context. Put simply: I’m a bit of a nerd.  A simple, considered and clearly communicated strategy establishes critical context for decisions at the execution level.

It’s like the old saying goes: ‘If you don’t know where you are going, any road will get you there.’  Without a simple, clearly defined and widely communicated strategy, your teams may well take any road and end up…well anywhere.

Large management consulting firms have made squillions mystifying strategy in some ways.  Don’t get me wrong, there are brilliant people, great business models and even better slide decks inside these organisations.  However, they can have a tendency to over-complicate the strategy process.  Tools like the Lean Canvas work coming out of the broader Lean Start-Up movement is doing a lot to simplify strategic planning and particularly identifying your organisation’s ‘why’.

When you really think about strategy, a lot of what is required is common sense (but remember Voltaire said it best “Common sense is not so common”.)

Finding a good blend of simple, clear, concise strategy and lean/agile execution can drive uplift in business outcomes in a rapid and profound way.  I encourage you to think about your own organisation and where this strategy+execution marriage is falling down. There may well be a simple solution.

Ask yourself a few simple questions:
1.) Can I easily describe my organisational strategy?
2.) Does everyone in the team know our ‘why’?
3.) Is it simple for people to link what they do on a daily basis to the strategy?

If any of your answers are no, I suggest you have a think about how you can start creating a clear and concise strategic view for your organisation.

Useful? If so, share with your network.  If not, comment below and let me know.