engage magazine ISSUE NINETEEN I MAY 2015
KENNY JACOBS: ARCHITECT OF THE CUSTOMER REVOLUTION AT RYANAIR
LLOYDS LEADING THE FIGHT TO WIN BACK CUSTOMER TRUST SO IS YOUR STEAM ENGINE BROKEN? WHY IT’S THE END OF COMMAND AND CONTROL
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a word from the editor
Lessons we can all learn from the chief executive of Ryanair Over the years I have been one of the most vociferous and consistent of all in my criticisms of Ryanair and their unashamedly shoddy treatment of customers. I refused to ﬂy with Ryanair for several years as my personal protest. It’s crystal clear that as time went by I was not alone
Steve Hurst, Editorial Director, Engage Business Media @engagecustomer
Back in 2013 the airline issued two proﬁts warnings in as many months and chief exec Michael O’Leary realised that the game was up – the changing behaviour of customers and their increased expectations of having a good customer experience, as well as in Ryanair’s case of ﬂights being on time, had caught up with him.
While arch rival EasyJet was soaring high Ryanair was in the doldrums and leaking customers like a sieve. It was crystal clear that drastic action had to be taken. And indeed it was. Exactly what did happen, and indeed what is still happening, is revealed in the Cover Story of this issue of Engage. It makes for a fascinating, insightful example of how the way we behave as customers is forcing the organisations we interact with to change – and in many instances such as Ryanair – mend, their ways. A few months back I was invited by Ryanair to attend a slickly presented press conference in London to introduce their new eight point Customer Charter. The press conference was fronted by O’Leary himself who disarmingly put his hands up to a ‘mea culpa’ admitting that Ryanair’s philosophy of treating customers who dared to complain with disdain had ﬁnally backﬁred.
Quote of the century? Indeed as O’Leary was presenting a visual was being displayed behind him with his own quote which read ‘If I’d known being nicer to customers was going to work so well I’d have done it years ago’. Putting your hands up, admitting your mistakes, and moving on is clearly working for Ryanair. Knowing I was going to be attending that press conference I booked 3
myself onto a Ryanair ﬂight to Berlin a few weeks beforehand for the CCW show just to see if I noticed any difference from years back - and indeed I did. The attitude had changed and Ryanair people both on the ground and in the air were discernibly ‘nicer’ – it was a pleasure to ﬂy Ryanair which is something I never thought I would say. And as our interview reveals it’s also a lot nicer for Ryanair employees who are more engaged now with their jobs as they can actually be nice to their customers. Ryanair’s new TV ad campaign drives home the point. Our interview in Engage is with the architect of that change, new CMO Kenny Jacobs, who O’Leary bought on board to make the airline more customer friendly - because while the chief exec knew something had to be done he needed somebody like Jacobs with a customer centric background, to make it work. It’s a fascinating interview and I urge you to read it.
Ryanair a text book example Of course there is a wider point here. In many ways Ryanair is a text book example of just how critical it is now for organisations, whatever the sector, to deliver on a better, more consistent customer experience across the entire customer journey. I was at an MRS conference a little while back and opening keynote was from Unilever’s chief exec Paul Polman . His opening was organisations have to keep up with the expectations of their customers – those that do will win and those that fail will go to the wall. Polman also forecast that the life expectancy of public companies will fall dramatically as those who don’t keep up with their customers’ expectations do indeed go to the wall. Ryanair’s O’Leary - who is a charming and charismatic man in the ﬂesh - realised that and did something positively and quickly about it. It’s amazing what two proﬁts warning can do to concentrate the mind. More chief execs need to learn that lesson and fast before it is too late. ISSUE NINETEEN • MAY 2015
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contents Cover Story RYANAIR’S ROAD TO DAMASCUS – WHY THE AIRLINE STARTED BEING NICER TO ITS CUSTOMERS It took two profits warnings at the back end of 2013 to make Ryanair chief executive Michael O’Leary realise that its years of shoddy treatment of customers was beginning to backfire. Here Engage puts the spotlight on the airline’s new Chief Marketing Officer Kenny Jacobs who was bought on board by O’Leary to stop the customer rot
HOW TO ACHIEVE SUSTAINABLE EMPLOYEE ENGAGEMENT Employee engagement can be a key driver of business success, but unless it is matched with wellbeing support and good stress policies, the effects can be counter-productive says Andy Gibson
THE BIG INTERVIEW At our first Employee Engagement Summit, described by delegates as a ‘world class’ event, one of the most highly rated presentations came from Kam Somal, Group Head of Organisational Development at international insurer RSA. In this exclusive for Engage editorial director Steve Hurst asks Kam about RSA’s customer and employee engagement strategies
SHATTERING THE ILLUSION OF THE LOYAL CUSTOMER In research nattily titled ‘Dogs are Loyal Consumers Aren’t’ commissioned by Oracle consumer behaviour expert Philip Graves argues that in their pursuit of customer loyalty, businesses are chasing an illusion. Here Philip makes his case and is joined by Oracle Customer Experience Strategist, David Lopes, who discusses the implications of this idea for businesses.
HOW LLOYDS IS LEADING THE FIGHT TO WIN BACK CUSTOMER TRUST In this exclusive interview Engage talks with Lloyds Banking Group Customer Services Director Martin Dodd about its customer journey post financial crash bail-out and why there is still a long way to go
WHY THE US IS YEARS AHEAD OF THE UK IN DELIVERING THE CUSTOMER EXPERIENCE The United States is leading the field in customer experience, according to Nunwood’s latest Customer Experience Excellence Centre Analysis. The five year programme, which studied the US market most recently in February 2015, identified that the top brands in the US are amongst the most successful in the world, operating in a nation that is proficient in just about every business sector, delivering superior experiences on a daily basis.
HOW TO PUT YOUR CUSTOMERS AT THE HEART OF YOUR DIGITAL ECOSYSTEM Prof. Steven Van Belleghem says building a customer centred ecosystem can set your business apart from the competition and he has three fundamental principles that can set you on the road to digital nirvana
SO IS YOUR STEAM ENGINE BROKEN? Co-authors Dr Mark Powell and Jonathan Gifford have just published a new book ‘My Steam Engine is Broken’ which calls for organisations to abandon the old command and control way of running a business if they indeed want to stay in business. Here they examine how these outmoded organisational behaviours are disengaging your people and your customers
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To join Engage Customer (free membership) and receive weekly Alerts, Digital Magazines and Invitations to the Directors Forums and other Engage events go to: www.engagecustomer.com www.engageemployee.com @engagecustomer Mainline: Steve Hurst Nick Rust Chris Wood Rachel Blake Dan Keen James Hitchinson Fiona Forbes Annie Hogan
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Editorial Advisory Board Mike Havard I David Jackson I Marcus Hickman Colin Shaw I Peter Ryan I Ben Stockman I Peter Sinden Sean Risebrow I Laura Lee I Andrew Stephenson Published by: Engage Business Media Ltd, Nicholson House, 41 Thames Street, Weybridge, Surrey, KT13 8JG ©Engage Business Media
ISSUE NINETEEN • MAY 2015
Ryanair’s Road to Damascus
– why the airline started being nicer to its customers It took two proﬁts warnings at the back end of 2013 to make Ryanair chief executive Michael O’Leary realise that its years of shoddy treatment of customers was beginning to backﬁre. Here Engage puts the spotlight on the airline’s new Chief Marketing Ofﬁcer Kenny Jacobs who was bought on board by O’Leary to stop the customer rot
ISSUE NINETEEN • MAY 2015
In November 2013 Ryanair chief executive Michael O’Leary announced he was retreating from public view because his somewhat brusque persona was “getting in the way” of the airline’s much-needed image revamp.
previously abrupt customer service culture was pushing passengers away.
His declaration came in the wake of the budget carrier’s second proﬁt warning in as many months partly it said as a result of more intense competition but also a recognition that its
The following January Kenny Jacobs, formerly of Moneysupermarket.com and Tesco, arrived as chief marketing ofﬁcer. He was tasked with spearheading the airline’s drive to become more
“We need to stop unnecessarily p***ing people off,” O’Leary remarked.
The results from its ﬁrst year of operation are impressive – the airline’s proﬁts are soaring once again (up 32 per cent to 795million euros at the half-year) and passenger numbers are pushing the 100million mark. EngageCustomer sat down with Kenny, after the launch of the airline’s new customer charter (see box) in London last month to discuss what has changed, why and what’s next. The common perception is that Ryanair made these customer service changes in direct response to its profit warnings. Is that fair or did other considerations come into play? KJ – I think there was always going to be an inﬂexion point in advance of our big, big aircraft order. [The airline has 183 Boeing 737 NG and 200 737 MAX 200 aircraft upcoming.] That was always going to happen because we were going to grow as an airline and we needed to ﬁll those new aircraft. What is commonly reported is that the changes were down to proﬁt warnings or competition with Easyjet but there is much more made of that than actually
exists. There isn’t that much of a footprint overlap with Easyjet so it wasn’t that big a factor and the proﬁt warnings were more about other reasons such as softness of the market and currency issues than customers not wanting to be part of Ryanair. However we did notice that if there was a Ryanair ﬂight for 30 euros to a particular destination and another rival ﬂight for 50 euros we were seeing those customers choosing the other airline. That caused some reﬂection in our company and made us ask ourselves ‘Why is that?”. We had been single-minded in focusing on being the best operator and perhaps our customer service was a bit rough around the edges.
“We noticed that if there was a Ryanair ﬂight for 30 euros to a particular destination and another rival ﬂight for 50 euros we were seeing those customers choosing the other airline”
We thought what can we do about it and that led to us saying a royal mea culpa and developing the Always Getting Better programme. So an element of change was going to happen but perhaps we have ended up with bigger change than people expected. I think that we have also seen braver change on behalf of Michael. When I started this job people said to me you can talk about change but you will not really change. You’re a leopard, you
customer friendly largely through its Always Getting Better change programme.
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Kenny Jacobs, chief marketing ofﬁcer, Ryanair www.ryanair.com
can’t change your spots. But look at us a year in and judge us now. It is real and ongoing change. With a relentless spirit we’ve improved the customer experience but we’re not there yet. No ﬂag is planted saying that we’re ﬁxed and indeed when you are a customer centric company you never really get there.
KJ - He made up his mind that he wanted to change. He brought me in to help him ﬁgure out what the changes should be and then it was up to me to drive that change across the business.
So a combination of business realism as you grew into a bigger and more modern airline but also an appreciation that your customers needed more?
In fact when I did the interview for this job it was as much me interviewing Michael as him interviewing me!
KJ – There was a change in the consumer dynamic as well. There was a time and a place when if you had the lower fares on a poor website then people would still go for that low price.
I wanted to satisfy myself that this guy was serious about change. I pretty much gave him a sheet of paper which said Always Getting Better at the top and a list of things that I would change about Ryanair. He also had a list of changes so the programme that we eventually settled on was a combination of the two. It was a very open process and really I think we are a very good case study of successful change within a business. It comes from leadership at the top and that’s Michael and the board wanting to change and a sense of urgency as well. We didn’t get any consultants in to say what we should change and how because if we did we wouldn’t have achieved half of what we have done in the last year and it would have cost us money. You know what? We have just gotten on with it and we’ve landed a few quick wins very early on and that’s given everyone in Ryanair a sense of the seriousness of the change. I think it is the best example I’ve seen of really effective change which has been
But consider the advance of mobile technology and someone sitting in the back seat of a cab in London and they want to book an air ticket. Well if the airline that you want, us, doesn’t allow you to do it on your smartphone then that airline, us, is losing out on a booking. There is also the European zeitgeist of consumers being more careful with their money, choosing Aldi and Lidl supermarkets for example, and that helps us of course but along with that people want more transparent brands. Transparency is not something you opt in or out in as a business you have to do it. That means informing consumers about what we are doing and how we are doing it and that is seen in our charter.
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In terms of the change was it led by Michael or did people like yourself have to push him in this direction?!
“I want Ryanair to remain outspoken. In the past we used to bite at everyone including our customers but now I want us to ﬁght the travel establishment and its high costs. We want to ﬁght our customers’ corner now”
implemented quite quickly which has stuck.
calls from our call-centres to self-serve online.
What feedback are you getting from customers and how are you measuring that?
We didn’t do any of this in the past but we don’t want to overdo it. I think lots of people get the balance wrong between too much listening and not enough action. Listen you don’t have to be a genius to know that customers would like allocated seating or a second bag on board but we really like listening and we’ve proved that it works.
We’ve hired our ﬁrst market researcher and we’ve created our ﬁrst 8 strong insight team for qualitative and quantitative research in terms of how the website is converting and having responsibility for customer data. They are saying this is how the demographics of our customers are different in Poland compared to the UK. So they are starting to mine to improve acquisition and retention. I see gold in the data but we are only really starting to dig for the ﬁrst time. But we have also added more resources to our customer services team and we are doing more customer surveys at airports and online. We are using Twitter to ask customers what they want from us and encouraging them to send us ideas over email. We’ve increased call-centre opening hours and this year we’re also going to try and move some
What about engaging your employees in the changes? Are they fully on board? Our customer services team is leading the Always Getting Better training programme to help our number one crews and the base supervisors. It is a three day training course and goes through the new ways we want to treat customers with a particular focus on families. We talk to them about things like mobile boarding passes, about the business and families products we have and the way we want them to talk to customers. [At a press conference last year O’Leary said cabin crew had been encouraged to be more “happy clappy”] It is instilling what good looks like in terms of customer service behaviour. We are also talking to them about the new customer charter. We are using the number one crew as the ﬁrestarters of positive change. When I ﬂy I ask the crew how they are feeling and they tell me they love the changes because it makes their
KJ – They still love our low fares but they feel less of the Ryanair angst of old when travelling with us. There is more transparency about fares, fees, baggage and policies. It is much simpler and enjoyable for them on our website and at the gate. I think we have taken those rough edges away.
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“When I ﬂy I ask the crew how they are feeling and they tell me they love the changes because it makes their lives better as well. They used to be part of that angst and the drama at the gate over baggage or tickets and they prefer not being part of it!”
lives better as well. They used to be part of that angst and the drama at the gate over baggage or tickets and they prefer not being part of it! [Indeed during the presentation of the customer charter Ryanair showed a ﬁlm of staff talking about the changes. One stewardess said: ‘Our job is much more enjoyable seeing our customers much happier.”]
Are the customer service changes helping you build a better and bigger business?
We have also trained call centre management staff with call centre employees to follow this year.
It is also about retention of customers. In the past we wanted new customers and it was like well if you don’t buy with us or travel with us again we are not that interested. Now we are interested in growing loyalty as well as acquisition of new customers.
Our pilots are getting i-Pads now which we think will add to overall safety and efﬁciency. Have you found it difficult to change employee attitudes given that previous service levels may have become ingrained over the years? KJ – I was positively surprised. You know Michael has really bought into this. He is Ryanair and when he wants to do it it gets done. That has helped but truly staff have been really up for these changes. It’s been more about training our current staff and letting them be themselves than recruiting new friendlier staff! We’d be open to linking customer service improvements with remuneration. It is the classic thing isn’t it but I don’t think we are there yet.
KJ – We want to be a travel retailer who specialises in ﬂights. Three years ago if we had ﬂoated the idea of a Ryanair Holidays company people would have gone – Jeez. What would that look like?! But now they would consider doing a lot more with us than they would in the past.
Any chance of Ryanair losing its edginess as a result of these changes? KJ – I want Ryanair to remain outspoken. In the past we used to bite at everyone including our customers but now I want us to ﬁght the travel establishment and its high costs. We want to ﬁght our customers’ corner now. Did you think that these changes would help Ryanair’s bottom line? KJ – No question in my mind. If you give a better experience you get more people back again and again and again. Can we really walk and chew gum? Well I think we have proved it.
It’s a quote for the ages. "If I'd known being nicer to customers was going to work so well I’d have done it years ago." It’s a far cry from some of the comments usually associated with Ryanair chief executive Michael O’Leary (pictured left). Take your pick – “"If drink sales are falling off, we get the pilots to engineer a bit of turbulence. That usually spikes sales." Or maybe – “We don't want to hear your sob stories. What part of 'no refund' don't you understand?" But that was when, as O’Leary explained at the London customer charter press conference, the group had a “narrow deﬁnition of customer service”. Time passes with O’Leary now enthusing about the effect the group’s three- year ‘Always Getting Better’ programme has had on customer demand, employee engagement and its ﬁnancials. “We’ve seen forward bookings, load factors and trafﬁc rising and proﬁts rising,” he said. The ﬁrst year saw changes such as allocated seating, a second free carry-on bag, mobile apps and revamped website and new Family and Business travel services. Now it’s time for Year 2 and with it the launch of Ryanair’s Customer Charter including promises to “listen and be open to change”, have ﬂights staffed by “well trained and passionate professionals” and to “make your travel an enjoyable experience”. New service changes include brighter aircraft interiors (less yellow, more “subtle” hues and pictures of beaches and blue skies), a personalised Ryanair.com website, more leg room on board, new menus, lower fees and a new ﬂight cancellation option. “We’ve listened to customers. They are driving the change,” said O’Leary. “The new charter is a series of promises, signed by all of us, that we will live by over the coming years.” Year 3 of the ABG programme is “sketched out” with the airline continuously getting customer feedback to shape the new services.
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How to achieve sustainable employee engagement Employee engagement can be a key driver of business success, but unless it is matched with wellbeing support and good stress policies, the effects can be counter-productive says Andy Gibson You will often hear people say that “a little bit of stress is good for you”. The argument goes that we need a little stress to feel engaged and motivated: if we aren’t worrying about our work, we clearly don’t care enough.
When people talk about the beneﬁts of stress, they usually mean ‘pressure’. Pressure can be very motivating: caring about your work, your colleagues or your bank balance can be energising, and we generally like to rise to challenges and stretch our abilities. The key though is that it is quite possible to do all this without ever feeling afraid. Stress is the point where the pressure gets too much and starts to harm your health and performance, and it should be avoided.
Sadly though, despite occasionally hearing an academic agreeing with this, for the most part this argument is a relic of the past. Stress is a fear response, a sign that you feel in danger, that you are starting to panic, and ethically, medically and legally, it is a Bad Thing. The symptoms of stress include suppressed immune response, insomnia, forgetfulness and irrational risk-taking. A little bit of insomnia isn’t good for you. A little bit of irrational risk-taking isn’t good for your business.
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“For businesses to thrive, we need to look beyond staff engagement and examine the emotional tone of this engagement. It is not enough simply to know how engaged people are, we also need to know the nature of this engagement”
Staff engagement and stress are deeply linked though. We only get stressed about things that matter to us, so the sources of our stress tend to be linked to what motivates us – wanting to impress a customer, pushing for a promotion, taking pride in our work, and so on. When these things feel beyond our control, we can feel panicky, and stress levels rise. The more we care about our work and colleagues, the more likely we are to get stressed. Companies that work hard to boost staff engagement can quickly ﬁnd themselves with a stress problem. Conversely, companies with a stress problem can often ﬁnd motivation levels plummeting, as people disengage to protect themselves from stress.
High and sustainable the goal The goal is not simply high engagement, but sustainable engagement - high engagement with low stress. As one study put it: “Engagement, as traditionally defined, is not sufficient to give employers the sustained performance lift they need”. IIIThe goal with modern management, in the knowledge economy at least, is to help people stay at their peak, where they are motivated about what they are doing, but not so much that they start to get stressed and become unwell or unproductive. In fact, according to research into sustainable engagement, employee engagement and psychological wellbeing actually interact with each other to predict people’s performance.IV • Employees with high wellbeing and high engagement are the most productive and happiest employees. • Employees with high engagement but low wellbeing levels often ‘burn out’ or leave their jobs. • Employees with low engagement but high wellbeing levels are likely to stay but be less committed to their work. • Employees with low engagement and low wellbeing tend to contribute the least, and also be reluctant to leave.
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So for businesses to thrive, we need to look beyond staff engagement and examine the emotional tone of this engagement. It is not enough simply to know how engaged people are, we also need to know the nature of this engagement. Are people engaged positively or negatively? Are they spending their energy well, or wasting it on worry and inefﬁciency. To manage employee engagement successfully, we need to measure the quality of work, not just the quantity. In short, we need to work smarter, not just harder. So, alongside promoting staff engagement, here are a few things to encourage in your business to help ensure the engagement of your staff doesn’t tip over into stress. 1. Manage resources – both psychological and practical - carefully. Stress occurs when we think the situation facing us exceed our resources and we can’t respond effectively, so reducing stress is all about building up resources. There may not always be more time and money, but our skills, conﬁdence, supporting relationships and adaptability all contribute to how we feel about the pressure we’re under, so good management involves having a conversation about all these elements before assigning a task, to avoid giving people more than they can cope with. 2. Build relationships and promote collaboration. The more we can share resources and support each other, the more manageable things feel. After all, we will never have as many resources individually as we do when we collaborate. Investing time in relationship-building and team development, within and between teams, can improve motivation and reduce stress – but remember to incentivise collaboration, not just individual achievement. 3. Teach managers about the psychology of performance. If managers understand how pressure affects people, how to spot the signs of stress, and how motivation and stress are linked, they are in a much better position to catch issues early and support people appropriately. Without this knowledge, they will often ﬁnd themselves struggling in the dark, and probably feeling stressed about it too. 4. Make space for breathers and restorers. The more we can maintain our psychological energy levels at work, the calmer we feel and the more manageable things seem. So build in regular breaks, and create a
This has important implications for staff engagement. Staff engagement is a key driver of business performance. Engaged employees perform better in their jobs and are less likely to leave, and businesses with high engagement levels tend to outperform the stock market index, post higher shareholder returns and show higher proﬁt margins. IIFair incentives, achievable goals, good relationships, choice and autonomy, and an inspiring purpose - get these things right, discretionary effort goes up, and productivity increases.
About the author: Andy Gibson is a writer and entrepreneur who has started awardwinning businesses and advised some of the biggest companies in the world on innovation and business performance. He founded Mindapples in 2008 to educate and inspire people to take better care of their minds and make the most of their minds, both inside and outside work. All the proceeds from sales of A Mind for Business go towards Mindapples ongoing campaign to make looking after our minds as natural as brushing our teeth.
supportive culture in which doing things that restore energy and relax your mind are seen as vital parts of staying productive, not time wasting distractions. 5. Treat everyone personally, not bureaucratically. Personality types vary, and so too do our values, motivators and sense of our skills and resources. The same situation can be stressful for one person and motivating for another, so listen to what people say they need and respect their perspective on the situation. Sometimes people just need a conﬁdence boost, other times they need practical help. Fairness doesn’t mean giving everyone the same thing.
Above all, good organisational management should always take account of the states of the minds of staff. Get to know the emotional state of the business, put in place simple processes for checking in with managers and surveying staff about their stress levels alongside your engagement metrics, and look at the two alongside each other. Sustainable engagement is an issue that goes to the very top of every business, and if managed right, it can much more than a mark of a good employer: it can be a key driver of business performance. A Mind for Business by Andy Gibson of Mindapple is available now, and was Pearson and WHSmith’s Business Book of the Month for March.
higher shareholder returns... AON Hewitt (2011). Trends in global employee engagement. higher proﬁt margins... Towers Watson (2012) Global Workforce Study. Engagement at Risk: Driving Strong Performance in a Volatile Global Environment. July 2012. III sustainable engagement... Towers Watson (2012) Global Workforce Study. Engagement at Risk: Driving Strong Performance in a Volatile Global Environment. July 2012. IV Employee engagement and psychological wellbeing... Robertson, I. & Cooper, C.L. (2009) Full engagement: the integration of employee engagement and psychological well-being. Leadership and Organisation Development Journal. Vol 31, No 4. pp 324–36. Fairhurst, D. & O’Connor, J. (2010). Employee wellbeing: taking engagement and performance to the next level. Towers Watson, February 2010. II show
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g The Bi w e i v r e t In
At our ﬁrst Employee Engagement Summit, described by delegates as a ‘world class’ event, one of the most highly rated presentations came from Kam Somal, Group Head of Organisational Development at international insurer RSA. In this exclusive for Engage editorial director Steve Hurst asks Kam about RSA’s customer and employee engagement strategies
STOP PRESS: RSA WINS AWARD Just as Engage was going to press Kam picked up an Award on behalf of RSA from the Association of Business Psychology (ABP). She was at the ABP’s Workforce Experience Awards dinner at The Oval in London to receive the ‘Excellent Innovation in Business Psychology’ Award for the RSA entry titled ‘Culture Health Assessments Following a Business Crisis’. Engage Business Media is a professional partner of the ABP and we send our congratulations to Kam and all the other winners – more details on the winners including our own Excellence in Employee Engagement category on our new website www.engageemployee.com
• First off Kam can you tell us a bit about your background and how you came to the role of Group Head of organisational development at RSA? Of course. I joined RSA just over two years ago and have held different roles here in the Group HR team. RSA is an international General Insurer and we operate across four main geographies employing around 19,000 employees. I’m based at our head ofﬁce in London and I work closely with our regional teams, mainly across the areas of employee engagement, culture and people insights. Before RSA I worked at Barclays, Capgemini and London’s Metropolitan Police Service, on projects spanning core people processes – from assessment and training to organisational change and leadership development. • When you presented at our Employee Engagement Summit in April you were candid about some of the challenges RSA has faced over the last 18 months and how that has impacted on the culture at RSA– would you be able to give some detail on that please? At the conference I spoke about a particularly difﬁcult time which occurred at the end of 2013 when we found some ﬁnancial irregularities in our Irish business. This led to an unsettling
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period for the business – three proﬁt warnings and the resignation of our Group CEO which in turn resulted in trust and conﬁdence amongst our employees being extremely low. Two months later, a new Chief Executive (ex RBS Chief Executive Stephen Hester) joined the company and a plan was put in place to improve the strategic focus of the business, rebuild capital and achieve higher performance levels for customers and shareholders. What was critical during this time, was our newly launched “customer obsession” – something to help unite our people around a common purpose and restore pride in our 300 year company heritage. We also launched our new company behaviours (which we called “Expectations”) to help. One of the behaviours that was particularly signiﬁcant post “Ireland” was “Shout Out and Make it Better”. This particular behaviour also inspired some of the changes to the employee engagement survey which I’ll talk about shortly. • You have an ongoing relationship with customer feedback experts Questback – could you give us some detail on this and how it is of benefit to your operations and customer focus Yes. We started working with Questback about a year ago when we changed our approach to
“What was critical during this time, was our newly launched “customer obsession” – something to help unite our people around a common purpose and restore pride in our 300 year company heritage”
our employee engagement survey. We have a strong track record on engagement and we regularly feature in lists like the Top 25 Best Companies to work for. However, we wanted to bring new energy to our approach and move emphasis away from scores and more towards getting real insight and feedback from our people on how we could make our business better. We wanted to follow the trend towards more “social” channels where our people can describe in their own words what is and isn’t working. Questback worked with us to build a new survey approach with some exciting and innovative aspects that helped us to measure what mattered to us in RSA. • Tell us about the ‘YouRSAy’ initiative with its ‘Sentiment Sliders’ and how that is making a difference at RSA “YouRSAy” is the name of our new annual employee engagement survey which we partner with Questback on. It’s made up of some standard quantitative questions based on the key drivers of engagement, such as understanding and belief in the business goals, whether people feel enabled, trusted and supported to do their jobs and advocacy for the company and our products and services. The advocacy results are reported using Net Promoter Score (NPS) methodology to help us align to our customer agenda. The “sentiment sliders” are one of the more innovative aspects of the survey – they’ve replaced the usual 0-5 rating scales to help us move the focus away from single scores. So employees indicate their response to the quantitative questions by moving a tab along a mood scale which has positive and negative descriptions at each end. Whilst there’s a numerical scale behind the scenes – employees don’t see the numbers. • Your ‘Shouts Out’ initiative sound particularly interesting – could you give is the background to this and how it is working The “Shout Outs” are the qualitative part of our survey and align to one of the behaviours I talked about earlier – to help encourage our people to shout out about things they feel are important and that they want to change. Throughout the survey employees are invited
to express their suggestions for improvements in their own words. In our ﬁrst year of running YouRSAy we received around 80,000 Shout Outs – totally exceeding our expectations! This was fantastic as it demonstrated that our people felt comfortable and willing to speak out – about the things they valued about our company, their ideas for improvements but also the things they were most frustrated by. At a local level, the Shout Outs have given managers a real sense of how their team feel and a brilliant context for starting a conversation about how they can drive change. At a Regional and Group level, we have rich insights on the culture of our business and lots of ideas and passion for change – this has helped really shape some of the strategic projects this year. I’m looking forward to seeing what the Shout Outs will tell us this year and am hoping the uptake is as positive. • Finally Kam could you give us a flavour for of your future plans and how they are likely to impact your employee and customer engagement strategies? As you’d imagine there’s lots of activity across our business at the moment and there continues to be a strong focus on customer and our people. Within HR we’re about to launch our new Employee Value Proposition to help current and prospective employees really understand what it means to work at RSA. We’re also doing a lot to develop our leaders. Finally, in terms of the engagement survey – whilst the annual survey has its place, we want to continue to make the best use YouRSAy and join this up with the other channels to ensure we’re having an ongoing dialogue with our people about how we’re all working together to make RSA better.
“In our first year of running YouRSAy we received around 80,000 Shout Outs – totally exceeding our expectations! This was fantastic as it demonstrated that our people felt comfortable and willing to speak out” ISSUE NINETEEN • MAY 2015
Shattering the illusion of the Loyal Customer In research nattily titled ‘Dogs are Loyal Consumers Aren’t’ commissioned by Oracle consumer behaviour expert Philip Graves argues that in their pursuit of customer loyalty, businesses are chasing an illusion. Here Philip makes his case and is joined by Oracle Customer Experience Strategist, David Lopes, who discusses the implications of this idea for businesses
True loyalty is a product of human evolutionary psychology. During our prehistory humans learned that we fared better in groups; that if we helped someone when they needed it they’d repay the favour (well most of the time anyway). Our society’s now developed to a point where rules have formalised these relationships. In social terms we know right from wrong and, importantly, we feel bad when we break the rules. It’s that bad feeling that makes loyalty what it is. We feel a consequence – shame or guilt – when acting disloyally, which simply does not happen when it comes to the purchase of goods and services. I for one have never felt shame when switching to a new brand of toothpaste. Philip Graves’ report: Dogs Are Loyal. Customers Aren’t is available to download on the Oracle website
So if we’re not feeling loyalty, what are we feeling? The word best used to describe what happens when we consistently choose one brand over another is stickiness. Shattering the illusion of customer loyalty is a good thing for businesses. With stickiness brands can focus their customer service efforts on observable human behaviour, which is a whole lot easier to act on and to measure.
Four ways to go There’re four main ways we can use consumer behaviour to increase stickiness.
David Lopes is Customer Experience Strategist at Oracle
ISSUE NINETEEN • MAY 2015
Firstly we can look to build brand associations. Our minds work through making associations and this includes when we interact with a brand. Say I get a call from a sales agent; the
call may make me recall my last experience with that company – good or bad – or it may make me remember a competitor’s advertisement; or it may bring to mind some other association altogether. If brands ignore such associations they risk accidently triggering negative ones. For example, if a website uses a ‘chat’ icon that’s similar to one used by a competitor, what sort of association will that trigger – positive or negative? Brands must think through these questions when planning their customer experience journeys. Secondly, businesses should consider one of the most important facts about how the human brain works: Our minds love simplicity. The easier something is to process mentally, the better. When things are difﬁcult for customers there’s every chance they will act in a way you don’t want them to. Brands therefore need to do all they can to make customer experiences easy. Forget about launching services or channels because they are easy for a brand to do or to measure or roll out – today’s businesses need to centre on the customer. Another area of human behaviour to bear in mind is regret. We’re much more sensitive to the risk of losing out than we are to the opportunity for gain. We are, as a species, a rather cautious bunch. Consumers go back to the same provider, in part, because they don’t want to regret trying something new and feeling disappointed. When brands aim to build customer loyalty they tend to focus on positives: what can they do to make customers like them more? With
Philip Graves on the Illusion of Customer Loyalty
stickiness as the goal, it’s just as important to focus on what the brand can do to stop customers feeling regret. Businesses must be sure that if worst comes to worst and something should go wrong for a customer, the solution will be swift and appropriate.
individual context: from the product reviews I’ve ﬂicked through online to what my friends have said down the pub and what my past experiences of the brand have been – all my social networks, physical and virtual, combine to inform this context.
Finally businesses need to work their customer experience around service anchors. A great experience creates mental ‘anchors’ that inform future purchases – we love to be wowed.
Ignore those damned silos
Anchors are created through frequent and infrequent transactions. Frequent transactions build over time in our minds and constitute a sense of wellbeing due to the fact that nothing bad has happened in our relationship with a brand. Infrequent transactions are the times where a brand amazes us. An exceptional service experience can make a customer so happy that any future ‘normal’ transactions with the brand will seem all the better. It’s important to be clear what frequency of transaction you are targeting and focus the delivery of your customer service accordingly.
David Lopes on what this means for customer service teams The search for customer loyalty has been likened to the search for El Dorado. Both are believed to have existed in some form or other, both are perhaps more shrouded in myth than reality and both promise the prize of great riches. With Philip’s report we can now lay to rest the myth of customer loyalty and focus instead on stickiness. But what does this change actually mean for businesses? For starters it means businesses must do all they can to understand the customer journey from the customer’s perspective. It’s now an absolute must for businesses to map each and every step the customer takes with them; from the moment the customer ﬁrst realises they might want or need something, right through to purchase and post purchase support and hopefully recommendation. Then there’s context. When I buy something my purchase is tied to a whole series of events and interactions, each creating my
So, when looking at the customer journey brands must ignore their own organisational siloes and focus only on the customer. Understanding the customer context will help brands become sticky. How? Well a perfect example addresses the points Philip makes around ease and simplicity. By understanding context and gathering all the information they can on their customers, brands can constantly be on the lookout for the next way to delight the customer given who they are, what they like and what they are likely to want or need. These service anchors lie at the heart of truly great customer experiences. To create them, organisations should arm employees with the right tools – personalisation tools, virtual assistants, collaboration tools, and so on – and then empower them to delight customers. Brands should ensure service agents have all necessary data at their ﬁnger-tips and are able to engage with customers in a way that makes things simple for them. And agents must be enabled and empowered to make decisions on the ﬂy and be ﬂexible. All the technology, all the data, all the information in the world is useless if agents don’t feel they can act on what it – and the customer – tells them. In the age of digital disruption, the entire organisation needs to be able to continuously reﬁne and improve. Technology such as the cloud can help by allowing businesses to rapidly and inexpensively prototype new customer service concepts. But this creativity must be accompanied by an understanding of their effect on the customer journey and what others in the same and encroaching industries are doing. It is the speed with which businesses can prototype and reﬁne service channels and product, improving the ease and range of interactions which will alter business models and deliver stickiness.
ISSUE NINETEEN • MAY 2015
In this exclusive interview Engage talks with Lloyds Banking Group Customer Services Director Martin Dodd about its customer journey post ﬁnancial crash bail-out and why there is still a long way to go Banks, rightly or wrongly, were largely blamed for the onset of the 2007 credit-crunch which subsequently spiralled into the worst recession the UK has seen in decades. Over the course of the last eight years the banks attempts to rebuild their balance sheets and reputation with customers have been hindered by a number of new ﬁnancial scandals such as Libor rate rigging and PPI mis-selling. Even now as recovery dawns the banks still seem to be in the nation’s dog-house threatened with new regulations and steeped in new controversies including client tax evasion. Lloyds Banking Group, rescued by the Government at the height of the credit-crunch, has worked hard in this challenging environment to restore customer faith and improve their employees engagement with the public.
ISSUE NINETEEN • MAY 2015
NPS moving in right direction Their approach appears to be working. According to its 2014 annual results its net promoter scores (NPS) have increased by 50 per cent since 2010 with reportable banking complaints, excluding PPI, now approximately 50 per cent lower than “the average of our major banking peers”. When Antonio Horta-Osorio joined the group as chief executive in 2011 it was therefore Dodd he turned to for help in delivering his demands for improved customer service. Martin Dodd is a Lloyds Bank lifer. He’s been with the ﬁrm for all 28 years of his career starting in a branch and working his way through the ranks. He has taken on a wide variety of roles from insurance to being responsible for the group’s call centres until landing his present role as Lloyds Banking Group’s customer service director.
“When Antonio Horta-Osorio joined the group as chief executive in 2011 it was therefore Dodd he turned to for help in delivering his demands for improved customer service”
How Lloyds is leading the fight to win back customer trust “Antonio has a real passion for customers and he was looking for someone who could take responsibility for complaints. His view is that if you have got thousands of complaints then how can you even compete on service?” Dodd recalls. “The way Antonio likes to manage is that he has monthly group executive committees where he hears directly from his directors. I was the ﬁrst one to present at the very ﬁrst committee! He wanted to know about complaints, the background behind them and what we were going to do about it. He was sending a signal that service was critical. He deliberately chose me to be the ﬁrst speaker.” Dodd says these monthly meetings have been vital in helping him keep a gauge on how his work on complaints is progressing, identifying the “trend of performance” and importantly letting the rest of the business know what his department is doing.
Complaints, complaints, complaints One of the measures looked at in the meetings is Lloyds’ complaints reduction target which was ﬁrst set out in those early days in 2011. “No-one had ever set a target stating we will reduce complaints by x amount before,” Dodd states. “The great thing was that Antonio asked me what the reduction target should be and told me that he was going to announce it as part of his three year strategy to 2014. I decided on a 50% reduction target – so to cut the number of complaints by half.” Dodd said Horta-Osorio’s move was “empowering” and a piece of very clever management. “When you have a target imposed on you then a lot of executives waste their time trying to prove how the target was too stretchy and showing how difﬁcult it will be to reach it,” he says. “When you come up with a target yourself you don’t do that. You try and galvanise the business and say how do we achieve it?” Dodd said the ﬁrst thing the group did was to identify the root causes of customer complaints. One area was products and services with customers complaining, for example, that they did
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not understand how its bank charges worked if they went over their overdraft limit. Another area was when customers had to get in touch with the bank to notify them over a change of address or how to pay a bill. “Our processes had too many technical and operational errors in them so a customer comes in and asks for a direct debit to be cancelled and a month later the payment still goes out,” he says. “Our colleagues were wanting to do a great job but we had put these barriers in their way.” In terms of its staff Dodd admits that “colleagues had lost their way in understanding why a complaint is important”. “Colleagues didn’t feel empowered, didn’t feel they had the authority to do the right thing for the customer and didn’t have access to experts to get a resolution,” he explains. “They didn’t know where to go or who to speak to.” Dodd had overall accountability for the reduction strategy but each of the divisional directors, such as retail, also had responsibility for cutting complaints in their department. That total group involvement helped the bank resolve these key areas of trouble. “On bank charges we worked with the product team to improve transparency and re-engineered the way we charged on our bank accounts. Complaints related to this area are now down by over a third,” Dodd says. “On the process errors and service related complaints we set aside £5million a year to analyse the customer issues and improve faulty IT systems or codes to ﬁx it.” The third and “most important” step was taking 50,000 staff from the group’s branches and call centres out of the business for half a day to “go back to basics”. Dodd says: “We touched on what is your role if a customer complains and what we want you to do. We explained how important this is and how companies are judged by how they handle complaints especially banks with issues of trust. We walked through what a complaining customer is looking for including speed. Regulators give us 8 weeks to deal with a complaint but to really impress customers you have today and maybe tomorrow. With a really complex complaint you might get a week! As a colleague this is your chance to shine.”
When Antonio Horta-Osorio joined the group as chief executive in 2011 it was therefore Dodd he turned to for help in delivering his demands for improved customer service.
I S S U E S EI VS ES N U TE E NE INN E• T N E EONV E•M M B EA RY 2 0 1 4 5
“If we get the service right and support the employees and give them the training so they can see it working it will beneﬁt the bottom line. We are leading the way in this sector. Customer trust in banks is coming back but we have to work especially hard to rebuild it. The whole industry has got to do it” Martin Dodd: Customer Services Director, Lloyds Banking Group
Customers want a single contact He stresses that customers also do not want to speak to multiple people in an organisation when complaining – they want one single person to ﬁx the problem for them. “We re-organised ourselves around this. We empowered our staff with money so they could ﬁx customer problems there and then and take ownership of it,” Dodd said. “Through analysis we found that with a typical member of staff 80% of complaints could be solved in a branch but if the branch staff were very experienced the ﬁgure went to 90%. So we created three ‘phone a friend’ teams totalling 250 staff based around three locations – Scotland, Halifax and Birmingham. The members had twenty years banking experience, typically worked in a branch and had great knowledge around the systems. So if a colleague didn’t know an answer to a customer query they could phone one of these teams and get a response to help ﬁx the issue that day. If it was too complex then the customer was put through to the team and they would then have a named contact who has taken over his or her problem and who will see it through to its conclusion.” The ‘phone a friend’ service soon became a 24/7 operation to cope with the large numbers of ‘out of hours’ issues customers faced.
Complaint handling qualiﬁcation Another development, and unique amongst ﬁnancial ﬁrms, was the creation of a professional complaint handlers qualiﬁcation in conjunction with the Chartered Banker Institute. “The Institute helped us build the qualiﬁcation and oversee it. A thousand people have completed it and it’s great because it gives you the grounding in dealing with complaints,” he says. “It was bold and I wasn’t that sure about it initially but it has really paid off for us. If you invest in your colleagues you get results.” Indeed the 50% reduction target, taking its 2 complaints per thousand accounts down to 1 was achieved at the end of 2013. Dodd said employees were well aware of the group’s great progress as his team shared complaints data with them and how these compared with banking peers. “So our colleagues could see this and say ‘oh, they are investing and ﬁxing things’ and that builds momentum and more ideas and suggestions from them,” Dodd states. “We were going directly into branches and asking colleagues how we were doing so we got that learning cycle all the time.”
ISSUE NINETEEN • MAY 2015
As well as the volume of complaints, the quality of the handling was also assessed with those reaching deadlock passed to the Financial Ombudsman. “It’s a great test of how they view the way we deal with complaints. One of their best measures is the overturn rate so do they ﬁnd in favour of the consumer or the bank? A rate of 30% or less means you are doing a good job,” says Dodd. “In 2011 we were just shy of 50% which is a toss of a coin isn’t it? It took 18 months to get it down to 30%.” The success is also measured by customer satisfaction surveys and feedback. “The questions haven’t really changed over the years but we’ve got better in understanding what drives these survey responses – so the speed, the systems etc. We have done a lot more real-time feedback such as at the end of a call in a call centre. It’s powerful and you can’t argue with that direct feedback. Colleagues can adapt off the back of it.” Lloyds is constantly working at improving its complaints record. The colleagues half-day is now an annual ‘refresher’ event for example.
Banks and the battleground Dodd sees it as the main “battleground” between UK banks over the next few years. “Antonio wants us to be the best bank for customers and that is empowering for colleagues. They know what role they have to play. It’s improved a lot but it’s not perfect and we’re still ﬁnding areas where we can do better,” Dodd adds. “Failing to deal with a complaint acts as a catalyst for a customer to leave the bank and that has P&L implications. But the ﬂip of that is a real opportunity because if we do well with complaints customers bring more business to us. If we help their account issue then they buy a credit card from us and bring their mortgage to us. I was shocked by this.” So is he convinced of the link between customer service, employee engagement and beneﬁts to the bottom line? “Absolutely. The ﬁnancial success is an outcome from learning exactly what customers want and matching the employee engagement to that. They have to go hand in hand,” he states. “If we get the service right and support the employees and give them the training so they can see it working it will beneﬁt the bottom line. We are leading the way in this sector. Customer trust in banks is coming back but we have to work especially hard to rebuild it. The whole industry has got to do it.”
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Why the US is years ahead of the UK in delivering the customer experience The United States is leading the ﬁeld in customer experience, according to Nunwood’s latest Customer Experience Excellence Centre Analysis. The ﬁve year programme, which studied the US market most recently in February 2015, identiﬁed that the top brands in the US are amongst the most successful in the world, operating in a nation that is proﬁcient in just about every business sector, delivering superior experiences on a daily basis
Evidently, American companies have risen to the occasion. At Nunwood, brands are examined through the lens of The Six Pillars, which represent the six universal facets of all great customer experiences. These consist of Personalisation, Integrity, Time and Effort, Resolution, Expectations and Empathy, and the United States is ahead of the UK in almost every single Pillar. The United Services Automobile Association (USAA), for example, the top US brand, boasts world-leading scores in the pillars of Expectations, Integrity, Resolution and Empathy, and its overall scores are between 15 and 26 per cent higher than the UK average.
Long haul for the UK If the United Kingdom is going to catch up, it needs to recognise that it is in it for the long haul. "In broad terms, the US is probably two to three years ahead of the UK," says David Conway, Senior Partner and Chief Strategy Ofﬁcer at Nunwood. "We quantify the experience across [The Six Pillars], and if we just do a simple analysis between the UK and the US, they're probably about ﬁve per cent ahead of us in all these different dimensions, and we would guess that would take two or three years for the UK to catch up."
In short, the US is several years ahead of its counterparts in other countries in terms of customer experience, and not just because of the perceived more optimistic outlook of the nation. In fact, consumers across the pond often have higher expectations than in the UK, as Tim Knight, Senior Partner and Chief Commercial Ofﬁcer at Nunwood, attests: "The US population has much better experiences as it has been engrained in them after decades of service culture that they should expect great interactions, so the challenge is even harder for US brands to impress consumers."
ISSUE NINETEEN • MAY 2015
Have a nice day back in vogue So, what is it that distinguishes US brands from those in the United Kingdom? Nunwood’s latest Customer Experience Excellence Centre report highlights four themes amongst the best-performing US brands. • First, there are signs of a service culture resurgence. America's innate 'have a nice day' ethos might have become stale in the late 90s, but it has made a welcome return in 2015, with a renewed passion and genuine sincerity. It would appear that the recent recession, coupled with the customer experience management emergence in the US, has stirred American companies into a CX frenzy. • Second, there is a tendency for the strongest US brands to be led by CEOs who are also customer experience pioneers. These leaders set the customer agenda and build the service culture from the top down. They often do this with religious enthusiasm, and are not simply 'ticking boxes' to coincide with current management theory. • Third, there is the theme of customers driving innovations. The leading organisations seem to recognise the importance of continually driving customer experience improvement, and 'hot-house' new CX techniques in innovation labs. • Fourth, there is the emergence of an omnichannel focus. Digital ﬁefdoms have been abolished, with customers’ omnichannel needs leading to integrated organisational structures, enabling customers to interact in any way they wish, and at any time. More speciﬁcally, there is a keen desire to keep the technological and social media aspects integrated in the customer experience programmes, as David Conway observes. "With social media now, there's no real excuse not knowing what your customers are talking about," he says. "One organisation that [Nunwood] visited installed a digital screen in the board room that displays what customers have said two minutes ago - they scan social media and review sites, and that constant sense of the customer is really important."
Amazon continues to amaze Amazon, the online retailer, is an outstanding example of a brand that has embraced the technological side of customer experience management. Arguably, this is one of the most important aspects of its business, as its 'stores' only exist in the virtual world of cyberspace, and customer feedback, good or bad, can be made instantly available for the world to see in its product comment sections. And Amazon, rather than baulk at these challenges, has fully embraced them; in fact, its tendency to innovate is seemingly relentless. In the last few years, the brand has pioneered such timebusting services as One Click ordering, and has revolutionised the eBook format through its development of the Kindle tablet. All the while, though, the brand has kept its eyes ﬁxed on the customer, with an infectious zeal to continually drive improvement. Jeff Bezos, Amazon's founder, sees customers as integral to the company's everyday practices. "In the old world, you devoted 30 per cent of your time to building a great service and 70 per cent of your time to shouting about it," he says. "In the new world, that inverts."
One of these services includes the Amazon recommendation engine, which Bezos describes as a soulmate who knows the customer better than they know themselves. As Nunwood's Tim Knight points out: "The Amazon web pages are a masterclass
ISSUE NINETEEN • MAY 2015
in subliminally humanising technology. It welcomes you by name and continues to use your name where appropriate. It knows your browse and purchase history and offers helpful hints about things that you didn’t know about, but might ﬁnd useful."
US has mastered personalisation This sense of Personalisation is one that many of the top US brands have mastered. The supermarket chain Publix, for example, is renowned for showing a personal touch in a world that is becoming increasingly fast-paced and remote. It labels itself as a place "where shopping is a pleasure," and strives to deliver customer experiences that are as enjoyable as they are fulﬁlling. Recently, one of its employees found social media fame when he was photographed helping an elderly shopper tie his shoelaces; the image was posted on Twitter by a fellow shopper, and soon went viral. For Todd Jones, the President of Publix, this kind of attitude is essential for the brand's ongoing success. “We believe that there are three ways to differentiate: service, quality and price," he states. "You’ve got to be good at two of them, and the best at one. We make service our number one, then quality and then price.” This ethos goes beyond helping shoppers with their footwear; baggers at the checkout carry customers' goods to their cars, whilst other employees hold cooking demonstrations in the aisles. A visit to Publix is not akin to the conventional weekly shop - there is a greater sense of occasion for the customer, and an enhanced level of excitement.
More than just a chicken sandwich This is something that is reﬂected in another high-scoring US brand. The restaurant chain Chick-ﬁl-A refers to itself as the "creators" of the chicken sandwich, and uses this slogan to pique customer interest in its culinary concoctions. That said, its business is built on an empathetic foundation, with employees that want the diners to feel looked after whenever they visit a Chick-ﬁl-A restaurant. As Shane Benson, the company's Vice President points out: "To put it simply, we care. We may be in the chicken business, but we’re really in the people business. And when you care about people, it changes the way you do everything." Whilst this attitude is undoubtedly having a positive inﬂuence on diners, one of the most progressive aspects of Chick-ﬁl-A's CX practices is its desire to innovate. Recently, the restaurant chain pioneered the Hatch learning centre, an 80,000 square-foot creation that was set up with the sole purpose of improving the customer experience through the exploration of food, design and service ideas. This led to considerable improvements in the way the brand manages payments, using streamlined technology to speed up and simplify customer transactions. As such, Chick-ﬁl-A, like many of the strongest US brands, is constantly ﬁnding ways to excite and delight, setting and resetting expectations, whilst ﬁnding new pathways to engage with the more empowered individual. The consequence of this is that American customers ﬁnd themselves interacting with more outstanding brands on a more regular basis. They are constantly exposed to brilliance, meaning that mediocrity is no longer tolerable. Subsequently, the bar is constantly being raised, and US companies are encouraged to improve in-line with shifting expectations.
ISSUE NINETEEN • MAY 2015
How to put your customers at the heart of your digital ecosystem
Prof. Steven Van Belleghem says building a customer centred ecosystem can set your business apart from the competition and he has three fundamental principles that can set you on the road to digital nirvana
A “digital ecosystem” is a term used to describe the interaction between all the different channels a business controls both online and ofﬂine, the consumer and any other relevant partners such as suppliers, agents, bloggers or other media. The digital ecosystem
ISSUE NINETEEN • MAY 2015
links all the possible contact points and moments with each other, but most importantly, this system puts the customer in the central position of it all, recording data generated by each individual’s use of the product, visit to a retail outlet, e-mail or purchase. It might sound complicated, but building a digital ecosystem around the customer can create an extreme feeling of customer-orientation across wherever the individual comes into contact with your brand, and it can really set your business apart from competitors. Of course, implementing it requires dedication and planning, but you too could build an effective digital ecosystem upon the following three foundations:
The rise of digital technology has created a world where customers now have more potential touch points with brands than ever before. Companies of all sizes have an opportunity to manage relationships with each individual customer to create a truly outstanding experience, but to do so they must ﬁrst understand and build their own digital ecosystem.
feature “The cars of the future will not be made exclusively by the car manufacturers, but will essentially be more like giant smartphones, with major manufacturers opening up their network or platform to allow external companies to develop their own compatible apps”
Prof. Steven Van Belleghem is author of When Digital Becomes Human, published by Kogan Page priced £19.99. Follow him on twitter @StevenVBe, subscribe to his videos at www.youtube.com/stevenvanbelleghem or visit www.stevenvanbelleghem.com
1. Data centralisation Each and every touch point available to customers has the potential to generate valuable data. Whether it is downloading a mobile app, visiting a website, commenting on social media, calling to make a telephone complaint or visiting a retail outlet, an interaction with a customer should tell you a little bit more about them, and what they want. Having a single central database to collate and coordinate this data is an invaluable asset if you are going to be an effective digital ecosystem. Anybody who owns an Apple product will have experienced a great example of implementing this data centralisation. By setting up just one Apple ID per customer, Apple ensure that all the data ﬂowing between their different devices and channels will be recorded to this unique ID in their central database. The customer gets the beneﬁt of a consistent experience, but also the added reassurance that if they lose their iPad or iPhone they can have all their personal data restored within ﬁve minutes of purchasing a new appliance. Many people argue that customers will be wary of sharing personal data, but research has showed that as long as they are getting an improved product or service in return and they trust that the data will only be used for that purpose, most will be willing to do so.
2. Faster than real time Once an organisation has successfully centralised its data, it is possible to use the digital ecosystem to personalise more or less anything for the customer. What’s more, this can now be done in real time to match each individual’s situation and needs, because while it used to be acceptable for customers to wait a few days for personalised information, consumers increasingly expect websites and apps can to adjust themselves on the basis of the available customer data to increase the relevance of the information they provide. I am a big fan of Disney so I was excited to test out their new MyMagic+ system for myself when I recently visited Disneyworld. I made my reservation on the Disneyworld website and received an e-mail from the hotel, as you would expect from almost any hotel booking site. However, rather than a generic automatically generated mail its content was entirely personalised, beginning: "Dear Steven, thank you for your reservation. We see that you are travelling with your children. The following restaurants are perhaps
suitable to give your children an unforgettable day out." The MyMagic+ was clearly recording what and how I reacted to in the email, because when I click through on their suggestions, I received another mail just 10 minutes later and then Disney Experience app on my mobile was updated with my reservation just a minute later. These real-time updates of information across different channels of communication go a long way to generating a feeling of conﬁdence, reassurance and trust for the customer and make it a seamless experience for me as an individual whether I am at the theme park, at home on my laptop or out and about on my mobile.
3. Partner model As I pointed out earlier, it is crucial that the customer must stand central in any good digital ecosystem. This requires a signiﬁcant change in mindset for many businesses, particularly those that are transforming from a one-channel organisation to a customeroriented business. However, to build a complete digital ecosystem it also demands a large degree of openness towards other partner organisations who will provide touch points for the customer. Again we can look at Apple as a ﬁne example of being open to partners for the sake of the customer experience. Apple do not build all the apps available in its App Store, but they open up their system to allow others to contribute their ideas and push the capabilities of their products forward. This is an amazing win-winwin: it gives Apple more apps and a greater ﬂow of data about each customer than they could ever generate themselves, the customer has more choice and more competitive applications, and the other participating partners are able to stand on the shoulders of giants to build their own business on an established platform. While you might think this type of openness is ﬁne for smart phones, you may be surprised it is also developing in a number of different sectors, including the automobile sector which was previously notoriously closed. Due to the growth of partner models the cars of the future will not be made exclusively by the car manufacturers, but will essentially be more like giant smartphones, with major manufacturers opening up their network or platform to allow external companies to develop their own compatible apps. General Motors have already taken steps to open its network, with a level of openness that is far-reaching and includes details about the engine and technological reﬁnements of the vehicle, and this is surely a sign of things to come.
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24 SEP 2015
CUSTOMER ENGAGEMENT TRANSFORMATION DIRECTORS FORUM BLUE FIN VENUE, LONDON
The last ďŹ ve years have seen a huge change in the dynamic of the nature of the relationship between organisations and their customers and many business sectors are almost unrecognisable from what they were as customers increasingly take control. The pace of that change is continuing to accelerate and business and customer engagement transformation is an inevitable product of that change.
Register and join our Customer Engagement Community at:
www.engagecustomer.com Engage Customer and Engage Employee are part of Engage Business Media Ltd
So is your steam engine broken Co-authors Dr Mark Powell and Jonathan Gifford have just published a new book ‘My Steam Engine is Broken’ which calls for organisations to abandon the old command and control way of running a business if they indeed want to stay in business. Here they examine how these outmoded organisational behaviours are disengaging your people and your customers
‘The one best way’ Taylor’s central idea was that the typical worker, left to his or her own devices, will tend to ‘soldier’, which meant something like ‘to ﬁll up one’s working day by doing the minimum amount of work possible.’ He also noted something else: that when groups of workers begin to work in this way, there is no incentive for any member of the group to work any harder than anyone else. So far, so not very interesting but almost certainly true in some workplaces, both then and now. But it’s the next bit of
Taylorism that causes the problem that has persisted right up to the modern day. Taylor began to focus on the way in which various tasks were carried out. Some were entirely routine, like moving heavy ingots of pig iron from one place to another, or inspecting ball bearings for minor defects; others were quite complex, such as the production of machine parts using lathes and cutting tools. In every case, Taylor argued, it was possible to analyse the task ‘scientiﬁcally’ to discern the most efﬁcient way of carrying out that task. Once the science of the task had been discovered, those workers who were bestsuited to carrying out the task in this most efﬁcient way should be selected (and some existing workers would be incapable of working at this newly-discovered rate of peak efﬁciency and must be let go). The selected workers should then trained in the new ‘one best way’ of carrying out the task and individually rewarded when successful. Hey presto! Increased productivity and no more ‘soldiering’. Taylor went on to become, in effect, the ﬁrst ever management consultant. His trademark stopwatch studies, breaking individual tasks down into precisely-timed component parts, led
In the early years of the twentieth century, an America engineer called Frederick Winslow Taylor published a paper called The Principles of Scientiﬁc Management. You’ve probably heard of it, or certainly of the term ‘scientiﬁc management’, but you probably haven’t read it – it’s unintentionally amusing in parts, but it’s not a page-turner. Nevertheless, Taylor’s paper, which was very popular in its day, probably still inﬂuences the way that your organisation behaves. And, since the modern world of work has almost nothing in common with that of the early 1900’s, this lingering inﬂuence of what has become known as ‘Taylorism’ and the ‘Efﬁciency Movement’ is not good news. In fact, it is very bad news.
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In our new book we argue that many organisations and some aspects of every organisation are still stuck in a managerial mindset that dates back to the industrial era and is entirely unsuited for the engaged committed creative community of self motivated employees needed in a knowledge economy
directly to the ‘time and motion study’. His mission, with which one cannot argue, was to increase efﬁciency in industry and he was a prime mover in what became known as the ‘Efﬁciency Movement’ But analysing tasks to ﬁnd the most efﬁcient way of carrying them out wasn’t the only aspect of Taylor’s ‘scientiﬁc management’.
A new kind of being: the manager Most workers, Taylor argued, would be incapable themselves of discerning the science of their activities. In fact, he stated rather robustly in The Principles of Scientiﬁc Management that many kinds of worker were ‘too stupid’ to recognise the science of their work – but also that workers who might be clever enough to analyse the science of their work should not actually do this, as it would distract them from their work.
A new kind of being was required: the manager or planner. These people would take on ‘the burden’ of analysing and planning the workers’ tasks, freeing up the workers to carry out their tasks as efﬁciently as possible. In an ideal world, wrote Taylor, ‘the work of every workman is fully planned out by the management at least one day in advance, and each man receives in most cases complete written instructions, describing in detail the task which he is to accomplish, as well as the means to be used in doing the work.’ Sadly, notes Taylor, ‘Human nature is such, however, that many of the workmen, if left to themselves, would pay but little attention to their written instructions.’ More ‘functional foremen’ were required to ensure that workers carried out managers’ instructions to the letter. You might be beginning to get a ﬂavour of the bits of Taylorism that could be argued to be dehumanising, patronising, demotivating – and also the perfect recipe for disengaging the workforce and preventing any kind of creativity or innovation in the workplace.
New behaviours for the Age of Ideas
In our new book My Steam Engine Is Broken: Taking the organisation from the industrial age to the Age of Ideas, we argue that many organisations, and some aspects of every organisation, are still stuck in a managerial mindset that dates back to the industrial era and is entirely unsuited for the engaged, committed, creative community of selfmotivated employees needed in a knowledge economy.
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We don’t mean to argue that ‘Taylorism’ is rife in every organisation – though it is in some – but we do want to argue that there are distinct echoes of scientiﬁc management almost everywhere that one looks, and that the success of the Efﬁciency Movement has left a legacy of behaviours that are almost entirely unsuited to the modern word and which are almost entirely unexamined. They are so deeply embedded in the typical organisation that we all ﬁnd it hard to imagine that they might, actually, be redundant or even bad ways of behaving. If it was good enough for the great wealth-creating corporations of the twentieth century, we think to ourselves, then surely it is good enough for us? And anyway, we reﬂect, how could a complex organisation be structured and managed in any other way? But, in every case of persistent industrial-era behaviours, there is an alternative. A better alternative; a better way to behave that transforms ‘us and them’ into just ‘us’. We desperately need to challenge our unconscious, unexamined assumptions about how organisations can and should be run and explore alternative, modern ways of behaving.
‘I couldn’t wait to get to work every day’ Ever since Taylor, for example (to stick with the theme of the need for the special kind of beings called managers), there has been a continuing, unthinking assumption that every worker must be ‘managed’. But, to take one example, the mighty GE Aviation in the US have been experimenting for many years – with great success – with what they call ‘teaming’: allowing teams of engineers building jet engines to organise themselves to carry out the task at hand (building new jet engines from speciﬁcation to
shipment against deadlines and budget limitations) with no management whatsoever, other than a single plant manager, whose main role is to make sure that the teams have the resources to get the job done. GE found that manager-less teams build engines faster, cheaper and with fewer defects – and the teams were happier in their work. ‘I was never valued that much as an employee in my life,’ a team member from GE Aviation’s Durham, North Carolina, plant told Fast Company magazine. ‘I had never been at the point where I couldn’t wait to get to work. But here, I couldn’t wait to get to work every day.’ Everyone needs leadership, but do we really need so much management in the modern age? When constant innovation is needed at every level of the organisation from every employee, isn’t it time to forget about ‘the one best way’? And if we want our employees to tell us that they can’t wait to get to work every day, shouldn’t we perhaps give them a lot more autonomy? Shouldn’t we invite them to take control of their own objectives and experiment with different ways of achieving them? The industrial era was not wrong to explore ways of increasing efﬁciency and productivity. Thankfully, trying to turn human beings into pre-programmed robots is not only unnecessary in the Age of Ideas, it is pointless. It is not the efﬁciency of our processes that will bring success in today’s knowledge economy, but the brilliance of our ideas. Efﬁciency is a given, not a game changer. What we need is a lot of ideas from a lot of people: from everyone, in fact, within our various organisations. Which means, in turn, that we have to stop telling people what to do and encourage them to have their own ideas.
My Steam Engine Is Broken: Taking the organisation from the industrial age to the Age of Ideas http://mysteamengineisbroken.com
About the authors Dr Mark Powell is a freelance strategy consultant, business coach and writer. He is an Associate Fellow of Oxford SAID Business School, where he specialises in designing and directing senior executive leadership programmes. Mark also lectures on a range of subjects including strategy development, leadership, power and inﬂuence and strategic relationship building. He is a former partner at global strategy consultancy, A. T. Kearney. Jonathan Gifford is a business author whose books include History Lessons: What business and management can learn from the great leaders of history; Blindsided: How business and society are shaped by our irrational and unpredictable behaviour; 100 Great Leadership Ideas and 100 Great Business Leaders. His books have been translated into Chinese, Korean, Thai and Indonesian. Jonathan’s previous career was in newspapers and magazines; he was the launch publisher of BBC History Magazine. www.jonathangifford.com
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COMPANY PROFILES CLICKTOOLS
Clicktools is the leading provider of premium, Cloudbased survey software for businesses. The company lives by its brand promise to help customers better understand and serve their customers. Since 2001, the Clicktools solution has enabled organizations to improve customer experience by collecting, centralizing, and acting on customer feedback, leveraging the power of CRM. Notably, Clicktools was the ﬁrst survey provider to
integrate with Salesforce™ and was an original member of the AppExchange®. The company is privately held with headquarters on the South Coast of England and a USbased ofﬁce in Phoenix, Arizona. More info at www.clicktools.com.
Contact details: email@example.com communications@clickt ools.com www.clicktools.com
Clicktools Ltd. 7 Branksome Park House Bourne Valley Road Poole BH12 1ED. UK.
Clicktools Inc. 1661 East Camelback Road Suite 235, Phoenix Arizona 85016, USA.
Main: 01202 761822 Sales: 0800 0432587 Fax: 0800 471 5273
Main: 1-800-774-4065 Sales: 1-800-774-4065 Fax: 1-800-767-2070
Conﬁrmit enables organisations to develop and implement Voice of the Customer, Employee Engagement and Market Research programmes that deliver insight and drive business change. Conﬁrmit’s clients create multi-channel, multi-lingual feedback and research programmes that engage customers, empower employees, deliver a compelling respondent experience, and provide high Return on Investment. Conﬁrmit’s customer
engagement model provides the power to listen to the Voice of the Customer, integrate it with ﬁnancial and operational data to generate powerful insight, and take action that will deliver effective business change and create competitive advantage. Conﬁrmit has 350 employees and is headquartered in Oslo, with ofﬁces around the world. Contact details: Joe Lenny Joe.lenny@conﬁrmit.com +44 (0)20 3053 9376 www.conﬁrmit.com
I S S U E SN FO EI NVUEERTNTETEEEENENN•• •MA N AP YO R IV2L E02M10B51E4R 2 0 1 4
Ember is a customer management consultancy focused on helping clients maximise the commercial value of their customer engagement activities by identifying and exploiting opportunities for cost reduction, revenue enhancement and improved customer worth. Our approach is unashamedly ﬁnancial. In every consulting project, we will identify not
only how to make your business better, but how much you stand to gain by doing so. Our services span customer management strategy, operations consulting, outsourcing procurement, contracting and mediation, innovative deployment of analytics services and increasingly the strategy and deployment of digital channels into the mix. We would be pleased to understand your challenges and explain how we can help. Contact details: Alastair Murphy firstname.lastname@example.org 0207 871 9797 www.emberservices.com
Interactive Intelligence is a global provider of contact centre, uniﬁed communications, and business process automation software and services designed to improve the customer experience. The company’s solutions, which can be deployed via the cloud or on-premises, are ideal for industries such as ﬁnancial services, insurance, outsourcers, collections and utilities. The company’s standardsbased all-in-one communications software suite was designed to eliminate the cost and complexity of multi-point
systems. Founded in 1994 and backed by more than 5,000 customers worldwide, Interactive Intelligence is an experienced leader in delivering customer value through its on-premise or cloud-based Communications as a Service (CaaS) solutions, both of which include software, hardware, consulting, support, education and implementation. At Interactive Intelligence, it’s what we do. Contact details: Jamie Salmon Jamie.email@example.com 01753 418852 www.inin.com
QuestBack online surveys and managed feedback solutions empower companies to make smarter decisions, transform customer and employee experience and get ahead of
the market. Contact details: Tel.: 0207 403 3900 firstname.lastname@example.org www.questback.com/uk
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Zendesk is a beautifully simple customer service platform. Using Zendesk, companies build upon and evolve through three pillars of the platform. At each stage of their progress, companies achieve greater engagement and form better relationships with their customers - the keys to maintaining a competitive advantage. Our goal is to help bring companies and their customers closer together. We know that communication
is the key to happy relationships, so we build software that makes customer conversations easy and more productive. We are always looking to expand our thinking, but our guiding principle never changes: keep it beautifully simple. Contact details: Nick Peart Marketing Director E: email@example.com T: +44 207 558 8295 www.zendesk.com
Medallia is a leading customer experience management (CEM) SaaS company. Founded in 2001, the company is trusted by some of the world’s top brands — including Verizon, Macy’s, Sephora, Honeywell, Wells Fargo, Sony, Four Seasons, Sodexo, and Best Western — to create experiences that customers love. Medallia enables companies to capture customer feedback across a
multitude of channels and touchpoints (such as online, social media, mobile, and contact centers), understand it in real-time, and drive action everywhere — from the C-suite to the frontline. Contact details: Medallia UK 1 Pemberton Row, London EC4A 3BG, UK 44 203 1310 200 Sales: 1 844 238 37 67 www.medallia.com
Mindpearl is a BPO specialist focusing on international, high quality contact centre operations. Mindpearl was recognised as the ‘Outsourcing Contact Centre Provider of the Year 2013’ at the National Outsourcing Association (NOA) Awards in the UK. With an emphasis on inbound, multichannel customer support, Mindpearl supports global brands in the aviation, leisure, telecommunications, retail and weight management industries in English and 20+ languages. With our highly skilled, motivated multilingual workforce and our strategically located ‘Follow
the Sun’ locations, in Brisbane, Barcelona, Cape Town and Suva, Fiji, we have the know-how, experience and resources to maximise business performance and proﬁtability. Contact details: South Africa Candace Laubscher Candace.laubscher@ mindpearl.com T: +27 (0) 21 440 6707 T: +27 (0)79 514 7006
means. Our Customer Experience Excellence Centre is the world’s largest customer experience research centre. Its work ensures every Nunwood client is connected to the cutting-edge of international experience design and best practice. Contact details: Tim Knight firstname.lastname@example.org 0845 3720101 www.nunwood.com
PITNEY BOWES UK Alan Graham email@example.com T: +44(0)7780 115 042 www. mindpearl.com
Sabio is a leading contact centre technology specialist focused on delivering exceptional customer service strategies and solutions, partnering with leading vendors such as AVAYA, Verint and Nuance. With over
Nunwood helps businesses create consistently brilliant customer experiences. Our approach is uniquely ‘fullservice’. This means we join up customer strategy, experience measurement, feedback technology and frontline training. By connecting the dots, our clients delight their customers more frequently and achieve their commercial goals more easily. To create brilliant results, we work hard to understand what ‘brilliant’
15 years’ experience Sabio works with many major companies throughout the globe including The AA, DHL, Eurostar, Unibet, Lebara Mobile and Ofﬁce Depot. Contact details: E: firstname.lastname@example.org T: 0844 412 3000 www.sabio.co.uk
Pitney Bowes, a global technology company, powers billions of physical and digital transactions in the connected and borderless world of commerce. We enable data-driven marketing, parcel shipping & logistics, and statements, invoices & payments through our data management & engagement software, location intelligence offerings, and shipping & mailing solutions .
Helping clients achieve their greatest commerce potential are more than 16,000 passionate employees around the world, our relentless pursuit of innovation with over 2,300 active patents, and our focus on clients, who are at the centre of all that we do – from small businesses to 90% of the Fortune 500. Contact details: Mr. Raj Madabushi E: Raj.Madabushi@pb.com T: +44(0) 1491 416835 www.pitneybowes.com/us
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Our First Employee Engagement Summit hailed as a world class success Engage Business Media’s ﬁrst Employee Engagement Summit held at the Park Plaza Victoria Hotel in London last month attracted more than 300 delegates and was hailed by sponsors, delegates and speakers alike as a world class success, with many describing it as the best event of its kind they had ever attended The Employee Engagement Summit highlighted the cultural and commercial beneﬁts of organisations taking a holistic and joined-up view of their employee and customer engagement strategies. The Summit focussed ﬁrmly on the key issues, challenges and opportunities around engaging our people and including a heady mix of case studies, expert opinion, analysis, meet the speaker sessions and high level networking opportunities.
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Mouth-watering line up of case studies In addition to a mouth-watering line up of case study presentations from the likes of Mars, Coca Cola, Specsavers, Molson Coors, Afﬁnity Water, AMEX, RSA, Tata Consultancy Services, and the RSPB, our Employee Engagement Summit included inspirational keynotes from Peter Flade managing partner at Summit partner Gallup, David MacLeod and Nita Clarke co-chairs of Engage for Success and Clodagh O’Reilly chair of the Association of Business Psychology The Summit was held against the backcloth of a whole body of recent research including from the Financial Times that the two most important business challenges identiﬁed by CEO’s are around their people and their customer relationships. There is an irrefutable body of evidence which proves that organisations with engaged employees have lower attrition, have more engaged customers and as a result gain long-term competitive advantage. While CEOs are putting their people and their customer relationships at the top of their business agenda – still not enough of them really drawing a causal link between the two, and making it part of an overarching business strategy.
When we launched what is now Engage Business Media six years ago our rationale was underpinned by a commitment to highlighting the importance of organisations taking a joined up approach to engaging our people and our customers.
Still much work to be done The Employee Engagement Summit comes as a growing number of organisations are realising the business beneﬁts that accrue when they forge a link between engagement of their employees and their customers – although there is still much work to be done. Employee Engagement has indeed always been high on our and the time is now right for us to expand our portfolio of activities and drill down into the challenges and opportunities that come from effective employee engagement strategies. The virtuous circle formed by highly engaged, motivated and well directed employees interacting across departments with increasingly sophisticated and demanding digital age customers is the only sustainable way forward and will remain a focal point for our activities. Our 2016 Employee Engagement Summit is already being planned for next April.
Spotlight on those organisations getting it right The signs are that businesses are moving in the right direction, and those who do are enjoying a clear competitive advantage. The Employee Engagement Summit placed the spotlight ﬁrmly on those organisations who are getting their employee engagement strategies right. The Customer Engagement Summit, also chaired by Employee Engagement Summit chair Mike Havard of Ember, is already recognised as the leading joined-up customer experience event of the year - and the unmitigated success of our ﬁrst Employee has quickly established it as the leader in its ﬁeld.
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CUSTOMER ENGAGEMENT TRANSFORMATION DIRECTORS FORUM
INTERNAL COMMUNICATIONS DIRECTORS FORUM
BLUE FIN VENUE, LONDON
CUSTOMER ENGAGEMENT SUMMIT 2015
VICTORIA PARK PLAZA LONDON
EMPLOYEE ENGAGEMENT SUMMIT
BLUE FIN VENUE, LONDON
VICTORIA PARK PLAZA LONDON
To speak at our events contact: Steve Hurst email@example.com or +44 (0) 1932 506 304 To sponsor our events contact: Nick Rust firstname.lastname@example.org or +44 (0) 1932 506 301 Engage Business Media, Nicholson House, 41 Thames Street, Weybridge, Surrey KT13 8JG