Moments of "Strewth"!
Being ready for the unpredictable
Unfortunately, despite all the best systems and processes, customers can be impacted in very negative ways when things go wrong. The term “moments of truth” gets used to describe critical events on a customer journey such as making a claim or the ease of accessing a new product. The events we are talking about here are different. These are the bad events that occur occasionally that leave customers in a difficult situation like a flight cancellation, a system outage, a rogue staff member getting something wrong or a failing process. They also include situations where customers are in a sensitive emotional position such as after a bereavement. We have named these situations “moments of strewth”, because of the possible customer reaction and to emphasise how critical they are.
These bad experiences live a very long time in the memory and in this social media age, they may get broadcast to other customers far more than positive experiences. In some cases, the social media comments, videos or blogs have been shared with millions. The recent royal commissions in Australia demonstrated that these events, even if isolated or unique, can do major harm to reputations and business value. Some have produced a response by regulators adding cost to processes and reporting and in one case a company has folded as a result.
One of the lessons that emerged from these enquiries is that how organisations handle these issues is important for both reputation, social license to operate and brand value. It’s also a defining test of how customer centric an organisation is. “Non-financial risk” and how it is handled is an emerging hot topic in boards and regulators. Boards are starting to realise that they may need to measure and pay attention to different issues and processes. Bad treatment of customers is now as significant as financial risk of failure.
In this paper we’ll look at this issue on three levels: Firstly, we’ll look at how organisations handle the unpredictable, next we’ll look at the processes and structures needed to recover from failure and why they are worth the investment. Lastly, we’ll cover the potential to learn from issues that turn critical in this way.
1. Dealing with the unpredictable
The unpredictable seems to happen more often than expected, which is somewhat of a contradiction. Extreme weather events are more frequent causing delays in transport, floods of claims or loss of power. The increased dependency on technology has also created a critical dependency that can fail with major impacts. For example, in Australia a recent loss of a payment gateway brought a crisis to retailers and hospitality when customers couldn’t pay for almost a day. We think it’s now essential that organisations have mechanisms to deal with unexpected events or possibly a critical situation for the customer like a missed flight or bereavement. We think organisations need responses at three levels. First, organisations need to manage key issues with an organisation wide response we call “key issue management”. Secondly, in some industries they need to have a “programmed” response to issues that occur regularly but unpredictably. Lastly, they need an ability for front line individuals to escalate or respond to a single customer issue or unique event.
Key Issue Management:
We have seen some great examples of what we call key issue and situation management. For example, a major general insurance company “kicked into” a streamlined claims process for a hurricane impacted area of Australia. They put
assessors in the field, arranged cut down paperwork and reduced the amount of checking required for all claims. That is a great example of recognising the situation the customer is in and customising a process to deal with it that also helped the business get through a flood of claims.
We would recommend companies make more investments in these issue management situations as they can be important moments of strewth. For example, an airline that strands thousands of passengers without accommodation overnight will almost certainly lead to some of them defecting to other airlines, bad publicity and complaints. We recognise that paying for accommodation comes at a cost, but these events are rare and the good-will created and the “bad will” avoided are significant. Often these exception situations need companies to have more flexible business rules. Claims approved with less proof is an example of that.
Some “exceptions” are more predictable. Companies know the situations will happen, but they aren’t sure when and how much. These situations need a “programmed” response. As an example, many of the energy network businesses recognise that when a network outage occurs, they could experience an avalanche of contact. To handle this, they have built in layers of proactive information provision to inform customers about outages. These include updated web sites showing outage information, SMS and email notification to customers and preventative messaging on IVRs to broadcast information on known outages. These are examples of organisations designing processes to handle issues of high impact to the customer or handling exceptional circumstances well.
All too often we see events that are “predictable” exceptions that either don’t have a process to deal with them or have a poor one. For example, we know of one taxi company that had a well-defined lost property process that helped customers get back items left in a cab (like mobiles or wallets – a real moment of strewth). They tracked lost items, sent broadcast messages to all drivers and worked hard to re-unite the lost item to the passenger. Two other taxi companies had no process for lost items and told their drivers to drop any lost property at a police station. Not a specific police station, just any police station, thereby making it almost impossible for passengers to get back their lost items. This was an inadequate response to a predictable customer exception.
Escalations and Exception Handling
It is even harder to handle one off events impacting just a few customers or a single customer. If an event is infrequent or unique, but has major customer implications, then staff need a way to respond that enables them to escalate and handle the unpredictable. A single well-defined escalation process can handle both the “predictable but infrequent” and the unpredictable. Escalation handling is often necessary because a normal process fails, because the customer is in unusual circumstances or because of a one-off event.
A well designed exception handling process recognises that this situation is different and must be treated as such. We find that well designed solutions often need structure, process and measurement components. These processes may need a different team or structure which is allowed more authority, has more experience or gets access to additional systems or processes. However, setting up a separate group can be expensive so sometimes all staff are enabled to “act” differently to handle the exception. This may mean going into a special, ”mode of operating” or being measured in a unique way for the duration of the exception process. Another good mechanism enables staff to manage “cases” and provides staff time and resources to manage the problem.
2. Recovery theory
Much has been written about the value for the customer and company in recovering well from failure and there are books on Service Recovery. There have been several studies showing that well managed recovery can generate high rates of satisfaction and loyalty. One internet service provider told us that if they recovered from problems well it generated their highest NPS scores (although they also admitted that their most loyal customers were those who had never experienced an issue).
Recovery and issue management need several different mechanisms because these moments of “strewth” take different forms with some common elements. We recommend three separate but related processes; Key issue/situation recovery, snowballs or repeat management and lastly our version of complaint handling. All three processes require root cause analysis and prevention which we will discuss in the next section.
Key Issue Recovery
We discussed earlier that sometimes organisations need an “organisation wide response”. After a recent day long network outage that made headlines, a major Telco offered customers a day of free calls a few days later a Sunday. This was an attempt at an organisation wide recovery. In this case it did win some favourable publicity but not quite enough because offering free calls on a Sunday was not seen as an adequate response to the unexpected loss of connectivity on a busy weekday.
In the last decade Qantas set up a service recovery unit to work with frequent fliers who had a bad experience. This group were there to offer very frequent fliers a range of recovery options such as bonus flyer points, free flights and the like. They were able to generate improved loyalty and share of wallet through a well-managed recovery. It was even worth them investing time and money in this recovery process.
Repeat Contact Handling and Snowballs
A repeat contact is another example that something has gone wrong. Ideally the organisation needs a way to handle it and recover on the second contact. The “snowball” process is designed for repeat contact handling (the idea being to melt the snowball before it gets bigger), which is still an exception because the first contact didn’t work for the customer. The snowballs process recognises that this situation is different and needs a different treatment.
When a snowball occurrs agents can “act” differently to melt the snowball. This can mean going into a “special-mode” where they have unlimited time and discretion to help the customer recover. The sole focus of the process is to recover from the earlier service failure. They may also log the snowball so the company can investigate root causes and future prevention.
We have many cases that illustrate that it is worth investing in repeat contact handling. For example, in one company by setting up a better-defined repeat contact process the business lowered the rate of repeats, reduced complaints and reduced the number of detractors. Customers won through improved resolution and there was a significant reduction in workload for the company.
Most companies we work with have a complaints team that handles the highest and most
formal level of complaints such as those to ombudsman or written to senior executives. However, we often find that customer facing staff outside these areas lack a process to recognise and handle earlier stages of complaints. The “snowballs” mechanism described above can be part of the answer. However, when customers are angry and complaining, staff need well-structured techniques to handle it.
We have had great success by recognising the gap in staff techniques and providing them a process to manage situations that are hard and thereby prevent issue escalation to formal complaints. Complaint calls aren’t easy. Customers are unhappy and often aggressive and to staff they may sound unreasonable or threatening. In most instances the issue is something that the staff member may feel is outside their control which puts them on the defensive.
Our solution is to give staff a well proven technique (we call it the LEAP technique) that recognises the situation and the likely customer behaviour and allows them to handle it. Providing staff with these detailed techniques produces both reduced formal complaints and shorter contacts. It also acts as a form of customer recovery and often results in more complements and thanks. The key to the technique is one of listening and recognising the customers situation. In many of these situations, customer's want the company to understand their situation and handle it well. That is what the LEAP technique teaches staff to do.
3. Systemic learning from failure: root cause and problem analysis
Organisations busy dealing with issues often find limited time to address the root causes. As we wrote in “The Best Service is No service”, they can be trapped in a cycle of dealing with the issues without time to address them. We have worked with a range of complaint teams and many say they are barely resourced to handle the complaint volumes and as a result have no time to investigate systemic root causes or other mechanisms that could prevent complaints. It is ironic that major institutions spent millions in legal fees preparing for the recent enquiries and spent even more on “making good” issues that have emerged. However, it seems they have less time to invest in internal investigations of the complaints that in some ways should be seen as “gifts” and free insight.
The case for greater investigation of root causes often becomes clearer when the size of
the prize is exposed. Fixing root causes of complaints often has two other benefits other than just the cost of complaints. Firstly, each complaint has probably been proceeded by multiple prior contacts that weren’t resolved. Secondly, there may be other customers who have experienced the same issue, made contact and not complained (hence there is a whole “slice” of contact that can be reduced). Complaints are therefore just the tip of the iceberg as shown. If the true root cause is removed, the impact can be far greater than just reducing the complaint.
As organisations look for the root causes of complaints techniques such as “Five why’s” analysis help work back through the problem. We find there are often three major buckets of causes that need different solutions. We’ll label them “avoidable human errors”, “systemic issues” and the “unpredictable but unavoidable”.
Avoidable Human Errors
Human error often emerges as a cause of both the handling of a bad experience and its cause. As we’ve described, where exceptions occur, often staff handle them poorly as they don’t recognise them or are stressed by these events. We have already described the need for exception processes and systems to kick in. However, often bad experiences result from poor advice or information given in earlier interactions. For example, poorly managed sales can set up customers on the wrong product or with the wrong expectations. The recent enquiries highlighted many bad sales or advice experiences and often put a spotlight on the incentive models.
We have found that a combination of better-defined process and re-aligned metrics can avoid these poor root cause behaviours such as rogue salesman or poor claim managers. Let’s use the sales example: By defining the right way to perform a sale and then measuring against that, we have been able to align the behaviours and incentives. We have shown many times that a well-defined process will produce the outcomes an organisation wants. This enables them to reduce the importance of the “outcome” measures like “sales conversion”. A well-defined process, well executed, produces an informed customer who will purchase the product. This can be counter cultural in some sales teams as it forces them to make the right sales rather than all possible sales.
Systemic Customer Issues
Analysing systemic causes of issues can sometimes be easier than it looks because the root causes are only one or two “layers away”. One recent client was being overwhelmed with calls from customers wanting to sign up online for their service and getting stuck in the on-line application. Listening to calls we were able to highlight the five key places in the process that customers got stuck and address simple things like the naming of fields and the validation and controls on the online form.
We spend a lot of time in contact centres because we find that is where issues emerge or become visible. A key mechanism that helps many organisations avoid bad customer issues is to understand “why customers are calling”. Despite all the CRM tools and VOC feedback we still find few companies have consistent and reliable reporting of the causes of contact from the customer perspective. We use a range of sampling and analytical techniques to solve this problem (see other white papers such as Omni channel Best service is No Service).
It’s not always easy to design solutions to these problems and we’re biased in thinking that an external perspective can often assist! It is often about challenging internal rules or norms that haven’t been challenged. For example, we frequently challenge the need for proof in difficult circumstances such as bereavement. Some organisations still ask customers for death certificates or other proof that displays a lack of trust in a difficult situation. We push back on these scenarios as we find that the risk of relatives lying in these situations is very low and showing trust in the customer produces much better outcomes. They are examples where internal business rules and norms need to be challenged.
Unpredictable but unavoidable exceptions
We recognise that some of these “moments of strewth” have unavoidable causes. A freak weather event or an unfortunate series of mistakes sometimes can’t be controlled. The analysis that is needed of these unpredictable events is of how they were managed and how this could be improved moving forwards. For example, it may be that the impacts of a weather event were compounded by the way the organisation managed the process. Staff may have failed to execute escalation processes or executed processes in the wrong way. These may generate valuable lessons for future events or show customers who have been impacted where a formal recovery process is needed. These may also be scenarios where extra feedback is sought from customers as the organisation may have much to learn. In a future paper we’ll write about why organisations sometimes have limited visibility of these situation and how this can be addressed.
It would be great if customers never experienced difficult situations, but in many industries, it can’t be avoided. We hope this paper has shown that it’s worth creating processes for these kinds of events by investing in exception handling, recovery and root causes analysis. These investments will deliver a pay back in the long run. The changes in the corporate climate mean that many of these processes are now “essential” to meet regulator expectations. We’re happy to explain more about the solutions we have recommended. For more information email us at email@example.com or call 03 9499 3550
 For non Australians, ”Strewth” is an Aussie slang word deriving from the English medieval curse ”God’s Truth” but has no religious connotation i.e. when something is absolutely stuffed up