Food retailers are competing on customer service

Food retailers are facing a tough time in the UK at present. The biggest of them all, Tesco, is facing up to some very unusual problems related to accounting errors (still under investigation) and Sainsbury’s has seen sales fall in each of the past three quarters. It’s tough out there on the British High Street right now.

But in some areas of food retail, things are going OK. At the budget end of the market there is Aldi, where the last set of reported profits were up 65% and they plan to open 65 new stores in 2015. At the more luxurious end of the food retail market, Waitrose has seen both sales and market share increase in the past year.

So there is a complex market developing in food retail where high-end stores can differentiate themselves with free cups of tea or coffee and free food samples at in-store delicatessens and at the other end of the market, a limited range of products that are sold at the lowest possible price.

Both these models appear to be working well, but all the stores in the centre ground have a problem trying to plan where they should be, competing with the value retailers or improving their service and not worrying about the price? They also face changing store preferences as British customers are switching their habits to shopping for a small amount more often rather than loading up the car at a hypermarket just twice a month.

A new study published by the Institute of Customer Service suggests that the answer may be to explore a stronger focus on customer service. 58% of customers in this new research said that they would not sacrifice the quality of service for the price of the products they purchase.

This is quite important as it shows how almost 6 in 10 customers really do care about customer service in the food retailers they use. What is even more important to add is that 26% of customers are so focused on service they are actively prepared to spend more to receive a better service from their food retailer.

That’s three-quarters of customers who have a strong focus on the level of customer service demonstrated by the food retailer they use. It is clear that brands such as Waitrose or Marks and Spencer are already targeting these customers, but when considering whether service or value is the place to focus, it is interesting to see the 3 out of 4 customers see the quality of service as more important than price.

This is just one study and it is likely that if every British mid-market food retailer tried to go up-market at the same time then it would not work as suggested. The overall national situation is far more complex, but it is interesting to see just how much food customers value service when many media reports assume that the path to success is just to stack it high and sell it cheap.

The chairman of Tesco, Sir Richard Broadbent, made a great observation back in late 2013 when he said: “The company that provides the best relationship with the customer will win — not through product, but through the best experience.” All of us are customers of food retailers. How do you balance the desire for great service with good value when you are shopping?

Please leave a comment here or tweet me on @brownsourcing.



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Utilities Need Even Better #Custserv in Winter

It’s December again. As we slide towards the end of the year, retailers are enjoying their pre-Christmas rush and events like Black Friday and Cyber Monday offer consumers an opportunity to reduce their festive spend, but there is a different dynamic in the energy utilities at this time of year.

Winter in the UK is when energy bills start rising and customers often resent the way that their bills soar just when they need extra cash to finance all those seasonal gifts and entertainment.

It can be a difficult time of year for some customers who do struggle to make ends meet, but even for those who can afford to use more energy, there is often a high level of dissatisfaction with their energy supplier at this time of year.

What can be done? Of course, a reduction in the size of energy bills depends largely on internationally traded energy prices and competition (plus regulation) in the local market so it is often impossible to help customers by reducing prices. But it is within the control of every energy company to make their customer service operation work better.

When customers get in touch to ask about their bill at this time of year, they are often upset about the amount they need to pay because it is naturally higher than it will be in summer. Many customers who pay by a fixed direct debit believe their monthly payment matches what they are using but that is rarely the case and it is this difference that leads to customer frustrations.

Recent Consumer’s Association research suggest that poor customer service is one of the key drivers for customers to switch energy supplier – and big bills in the winter are regularly a catalyst for customers to try getting in touch.  However if it is extremely difficult to interact with the customer service team then this just aggravates their underlying anger and makes the situation far worse.

If a customer does have an issue with their bill, but the customer service process is friction-free, easy, and reassuring, showing that the energy company really values their custom, then many potential situations where customers are annoyed with the brand can be avoided.

It is easy to plan ahead. Customers are using many more channels today to talk about services such as energy, but all these channels can be knitted together into a comprehensive multichannel support strategy.

For energy companies this winter, it is more important than ever to make sure that the interface with your customers is working smoothly and when given an opportunity to talk with customers about their bills they take the time to explain how billing works to avoid unexpected bills.

What do you think about the consequences of poor customer service for companies in the energy utility sector? Leave a comment here or get in touch via my LinkedIn or Twitter. 



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Customer experience is the #1 strategic objective for 2015

A recent report by the industry analyst Peter Ryan at Ovum was titled ‘customer experience should be the key focus for outsourcers.’ It contains some great insights.

Ryan believes that those of us who advise other companies on how to improve their own customer experience also need to pay attention to the way we interact with our clients. No company can afford to rest on their reputation today.

A different Ovum report on general business strategy reported that there are two objectives on the mind of most CEOs that far outweigh any others – increasing revenue (as you might expect) and improving the customer experience.

The Ovum view is that improving the customer experience is a strategy that has a direct impact on revenue whether you are running a B2C or B2B type company – this is no longer merely the concern of those who talk to millions of customers on a daily basis.

Interacting with customers today does involve more complexity and more data analysis. The proliferation of communication channels combined with the transparency of most interactions means that everything is not only more open, but often led by a customer choosing the way they want to communicate – far from how customer service used to be managed.

It’s a great insight from Peter Ryan that this affects B2B organisations though. I’m blogging here because I believe that the Teleperformance team needs to be seen engaging with the market and the global community of customer service experts.

I believe that this engagement, and the insight that it creates, does help us to improve the way we engage with our own clients – not least because we are often thinking about trends long before they become issues.

What do you think are the main differences in the way customer service operates between a B2C company and a B2B? Leave a comment here or get in touch via my LinkedIn.

365 arlophotochallenge 103 / 365 - Conversation


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Will BT make Quadplay a success in the UK?

It was confirmed this week that BT is in early stage discussions to purchase a Telecoms operator – potentially either O2 or EE. If the industry commentators are right and the deal is as described then this confirms the view of the UK market as being led by the need for a Quadplay offer.

As I described previously, the uptake for Quadplay has been quite slow in the UK when compared to other markets, such as Germany, but the fact that BT is now in the market for a mobile business shows that they feel that need to improve their offer to both home and enterprise customers.

This indicates that they feel that Quadplay is a market development worth betting on. They spun off their mobile business several years ago and then chose to start focusing on content. It’s true that content is extremely important and their success with BT Sport has demonstrated that it is possible to put pressure on market leaders, such as Sky, but it now seems that having a mobile division could plug a missing link.

I expect that if this deal does go ahead, it will lead to further success for BT. We are seeing the importance of Quadplay in other European markets. The potential is there for this to also work well in the UK with BT being well positioned if they can effectively plug the gap in their service portfolio.

What do you think about the possibility of this deal? Leave a comment here or tweet me on @simondillsworth.

BT Tower From Primrose Hill


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Will the ‘Big 6′ lose their grip on UK energy?

The energy regulator Ofgem has announced that complaints against the big six UK energy suppliers are at record levels. Over the first 9 months of 2014, this group of companies faced a barrage of 4.9m registered complaints and it is expected to surpass 5.5m by the end of the year.

Last week, Ofgem threatened another big six provider with a sales ban as a direct result of poor customer service.

British consumers do have a choice of energy provider and many of the smaller companies are competitive on price, often include more ‘green’ tariffs, and are clearly better at maintaining a good relationship with their customers. The London Loves Business journal even suggests that this customer service crisis may cause the big 6 to lose their grip on the energy market.

It’s a real fear. Switching supplier is easy, although in many cases inertia means that people continue paying bills to a supplier they are less than happy with. It is hard to believe that any executive in the big six would not be exploring how to improve their service to customers. With customer satisfaction so low, it is not about just improving the way calls are answered; surely it is about business survival?

What do you think? Could this customer service crisis affect the dominance of the Big 6? Leave a comment here or get in touch via my LinkedIn.

Whitelee Windfarm

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How can telcos pay for rural broadband?

I read an Interesting article recently that describes some views from the new EU Internet chief, Günther Oettinger. He says that if telcos provide broadband to rural areas then they should be able to tie the customers in to long-term contracts – payback for delivering the infrastructure.

I disagree; surely the onus should be on enabling the telcos to innovate and create an infrastructure that provides equality of access and service terms? Having permission to just lock people in does not incentivise telcos to solve the underlying problem.

As I have blogged about recently, access and speed are the basic table stakes now – customers will not want to be held to ransom just because the answer is not yet available. As VFI have shown with their recent deal with ESB, there are innovative ways to address this challenge and the focus should be on incentivising telcos to innovate and keep the customer’s needs at the heart of their planning.

It’s all very well saying ‘access on a long-term contract is better than no access’ but what happens when the service drops and I cannot escape a long-term and expensive contract?

Matanuska Telephone Association Lineman works to bring high-speed broadband to Chickaloon and Glacier View


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Teleperformance wins prestigious NOA award for CSR

Last night the National Outsourcing Association Annual Award (NOAAs) ceremony took place in London. The NOAAs are a bit like the Oscars for anyone involved in the service and outsourcing business.

Teleperformance won the Corporate Social Responsibility (CSR) award, something I am extremely proud of. Industry analysts often rank us as being one of the most competent and reliable companies in the business – as well as one of the most innovative – but this major award for our approach to CSR shows that we are really thinking about the impact of the company on people and the planet.

The reason we won the CSR award was our Citizen of the World programme. Citizen of the World was established in 2006 as Teleperformance’s charitable initiative to help the world’s most vulnerable infants and children meet basic survival needs and ultimately reach their individual potential.

Our multi-faceted commitment includes funding and sponsorship for abandoned baby shelters in developing countries, de-worming and other medical supply needs, food provisioning, computer donations to impoverished schools, clothing and toy donations, and victim transport funding.

Citizen of the World includes a global crisis fund to aid disaster victims on an ad hoc basis and world-wide participation of Teleperformance charitable volunteers to support the initiative’s goals.

We don’t just run these programmes as part of a marketing campaign for the group. On the first day any new team member joins our company, they learn about COTW and our Citizen of the Planet initiatives and how participation in these programmes is any important want to ensure the company assists the communities in which it is located.

I’d like to thank all the team members who made the COTW programme as successful as it has been and the NOA for recognising this. Thank you and congratulations to everyone in the Teleperformance UK team for doing the work that led to this great award!


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