Click here to load reader
Upload
forte-consultancy-group
View
485
Download
0
Embed Size (px)
Citation preview
Improving Processes in the
Service Sector – Going Beyond
Efficiency and Quality Uplift
October |2010
Improving Processes in the Service Sector – Going Beyond
Efficiency and Quality Uplift
Traditionally, efforts around improving processes in the service sector have had at
their core the end goal of reducing operational expenses while maintaining or
improving service quality, focused on driving efficiency in certain day to day
business activities. Such redesign efforts, however, must take several other factors
into account, factors which are quite often ignored at the ultimate expense of the
customer.
Google the term “process improvement,” and you’ll get over 2.5 million results.
No wonder, as this concept, which has taken on variations in the form of TQM, Six
Sigma, BPI, and BPR, among others, is one of the most commonly known and
practiced in business. Originating primarily in the manufacturing era, process
improvement has become a staple in the service industry as well, particularly over
the past two decades.
At its core, process improvement efforts have traditionally focused on identifying
opportunities within the business for improving efficiency and driving up quality,
with both objectives often pursued hand-in-hand. In the more monopolistic
environment of the past, companies in the service sector did little to address their
broken processes – the reason being there was little reason to do so. If a
customer was irate because his telecom operator took two weeks to get his home
telephone line repaired, there weren’t alternative operators he could switch his
business to. With no risk of losing customers, few companies were striving for
having lean and mean operations in place.
Thankfully, with the proliferation of competition in most sectors and countries
over the past several decades, service-oriented companies have been forced to
make significant strides in their processes. Competition has played the single most
important role in ensuring consumers receive a better overall level of service
today.
That said, we believe companies still come up short in certain ways when it comes
to process improvement efforts. As it stands, the focus around such efforts is
almost completely on efficiency and quality. Not to say that these factors should
not be at the core of process improvement projects, but there are others that can
also provide bottom line impact to those companies bothering to address them.
We recommend service sector companies undertaking process improvement
efforts address the following five factors during the project:
1. Channel Alignment: As the number of channels that customers can interact
through has significantly increased (i.e. applying for a line of credit via SMS,
lodging a complaint through Twitter, etc.), so too has the variation in the overall
level of service provided. Whatever the level of quality and service provided
through one channel is in a given company, so too should the rest be (or at the
least, expectations set).
This means ensuring that the processes in place around alternative channels (and
their relevant measures, KPIs, and targets) are airtight, monitored, and audited, so
as not to drive high variations across channels in terms of overall level of service.
If, for example, a customer’s application for a loan submitted in a branch is
completed in four hours with the customer receiving a call back in regards to
approval / rejection within six hours, then so too should the customer be treated
the same if he or she applies through the company’s website.
Moreover, customer expectations should be clearly set at a minimum, so as not to
disappoint them when their own expectations are not met when using one
channel vs. another. If, as another example, a customer is used to having their
phone reactivated immediately when they pay an outstanding bill in a dealer, so
too will he or she expect the same to happen if he or she makes the payment via
an EFT bank transfer. If the process does not support the same level of service
being provided, and thus, having an expectation met, then it should be made clear
upfront to the customer.
This variation across channels also rears its ugly head around the quality of work
conducted by employees. Applications received through one channel, for
example, result in the application fields being filled 90% completely, whereas
those through another channel result in 50%, let’s say. Such a problem is directly
the result of processes not being adapted to meet the difference naturally
inherent in channels, requiring each and every process to be examined for flaws
that need to be addressed.
2. High-Net Worth Customer Process Alterations: In one engagement, we
found that a customer in the top 1% tier of the company we worked with was
worth 16 times that of a customer in the bottom 50% tier, on an annualized basis.
This begs the question – shouldn’t then marketing / customer care budgets be
allocated accordingly?
Almost all companies are aware of the strategic and financial importance of such
customers, but only some actually go out of their way to ensure their retention.
We believe the alteration of processes to better serve high-net worth customers
is one such way this all-important segment can be pampered.
How? First, in terms of addressing / processing requests, such customers should
be serviced first and foremost. This means getting them to the front of the bank
queues with a lobby management system, routing them to the top of the wait
queue when they call the contact center based on recognizing their number,
providing them a separate teller or checkout line, and handling all their
applications and paperwork in a prioritized manner in the back office based on
their customer ID and relevant value segment, regardless of the channel of
origination (web application, in person application, SMS application, etc.).
Second, the quality of service provided to such customers must also be higher, so
processes must be put in place to ensure only the most experienced and qualified
employees touch them, so to speak. Again, this goes for all channels, and requires
addressing non-standard methods of providing segmented customer service (i.e.
dedicated call center agent or branch account manager). So if a company offers a
chat pop-up window on their website, then the most qualified employees should
be on one end when a high value customer chooses to use such a service. If an
extremely valuable and loyal customer’s car is brought in for service, it should be
given to the top mechanic. If an outbound sales pitch is to be made, it should be
done by the very best agents. Every opportunity to offer a differentiated level of
service should be examined via diving into all customer-related processes, as the
value of high-net worth customers cannot be overstated.
3. Sporadic Activity / Event Process Gaps Identification: A bank we recently
worked for launched a new branch in a very strategic part of the city, within 1
kilometer of another branch that practically had queues out the door from
opening to closing. For several months the new branch failed to pick up new
clientele or experience much traffic, while the problematic branch’s lines
continued unabated. The key reason? Customers were not made aware of the
new alternative – no SMS, no email, no phone call – nothing that would make
them realize such a wonderful queue free alternative was available just 1
kilometer away. Rather, the bank relied on simply posting the new branch’s
address on its website, and on hoping customers would just walk on by.
So while the bank does a great job sending SMS’ regarding new campaigns to its
client base, it failed to do the same in this case to alert customers living or
working near the new branch of the opening. The reason behind this is the
concept of a process gap, whereby non-traditional activities, occurrences, and
events fail to have documented processes in place for them, and rather, are
managed on an ad-hoc basis.
Two other examples of sporadic yet significant / disruptive events or occurrences
that affect customers include channel continuity / availability issues (i.e. shop or
branch relocation, or temporary closure for redesign reasons, so as to avoid
having the customer find out only once they get there), and service delays (i.e.
how many airlines send a friendly SMS to tell passengers to hold off coming to the
airport?).
We believe all such types of sporadic activities and events must be reviewed by
companies to ensure that processes are defined for them, and address all aspects
of the activity. In the case of our client and their branch launch, there clearly
existed a process gap around communicating with the customer base. As such, a
significant opportunity to shift traffic and satisfy thousands of customers for
several months was lost.
4. Exceptional Processes: Similar in concept to sporadic occurrences and
disruptions, exceptional processes are meant to address small segments of
customers that can often go overlooked; moreover, they are meant to address
exceptional events in such customers’ lives. Companies can quite often fail to
address such events, leading to significant client dissatisfaction (as these
exceptional events often are when customers may most be in need of service).
These events may be different sector-by-sector, but the following examples can
give an idea as to their types – every company would need to consider their own
set of exceptional events, and accordingly, design exceptional processes:
A customer losing his or her cell phone when abroad, in urgent need of a
replacement, contacting their operator to be told there is no process in place
to address the issue.
An elderly bed-ridden client being told to come to a branch to sign a given
document when clearly they can’t, with no process again available to address
this situation.
A hotel kicking out guests whose tour agency has gone bust during their stay,
with no procedures in place for addressing such an exceptional issue, no
alternate arrangements on standby with another hotel.
Each and every one of the situations listed above can easily result in losing the
customer permanently, and can even generate significant bad PR (aside from the
given negative word-of-mouth). Companies need to consider all the possible
exceptional events that can occur in their customer bases’ lifecycle and design
processes to address them effectively. Failure to do so not only leaves a
company’s employees in a confusing and difficult situation when they face such
an exceptional event, but also means significant dissatisfaction for affected
customers as well.
One final note – any process change effort must be done in phases in terms of
rollout. Process improvements bring a shock to the system in terms of change for
an employee. Resistance to major changes will be significant, and thus, process
change efforts can fail under the weight of it. Gradual modifications to processes
over time can help alleviate this common problem, as employees will be able to
accept them in doses rather than all at once.
Forte Consultancy Group | Istanbul Office www.forteconsultancy.com
About Forte Consultancy Group
Forte Consultancy Group delivers fact-based solutions, balancing short and long term impact as well as benefits for stakeholders. Forte Consultancy Group provides a variety of service offerings for numerous sectors, approached in three general phases – intelligence, design and implementation.
For more information, please contact [email protected]