Digital Transformation: Improving Value Exchange – [FULL INTERVIEW]

In this discussion, Graham Hill, a senior associate at Optimum Partners, shared his insights on service quality, decisioning, governance, and value exchange, particularly in the context of open banking.

The conversation covers the impact of regulatory frameworks like the UK’s Consumer Duty on retail financial firms, the role of customer-oriented innovation, and the importance of understanding customer jobs and outcomes.

We also got to discuss cultural differences in service perception and the evolving role of technology in enhancing user experience.

Find out more about Optima Partners -> Here.

Key Points

  1. The discussion focuses on service quality, decisioning, governance, and value exchange in open banking.
  2. The concept of value exchange is crucial in the context of open banking and broader business scenarios.
  3. Customer jobs and outcomes are central to measuring success and creating value.
  4. Tools like service logic can help in understanding customer interaction and value co-creation.
  5. UK’s Consumer Duty and regulations related to vulnerable customers in retail finance is going to have a big impact.
  6. There is a tendency for companies to do minimal compliance with new legislation.
  7. Cultural differences significantly influence service expectations and delivery across different countries.
  8. The role of technology, especially digital transformation, in customer service and experience is discussed.
  9. There is a shift in focus from product-based to service-based perspectives in customer value.
  10. The trend in customer service satisfaction in recent times is declining
  11. There is potential for improved service delivery through better understanding and use of technology.

Key Statistics

  1. An 80% success rate in customer-driven innovation approaches.
  2. A contrasting 80% failure rate in traditional invention approaches.
  3. A 90% failure rate for startups.
  4. Customer satisfaction in the UK has reached its lowest point since 2008.
  5. The CSI score in the UK is at its lowest since 2000.

Key Takeaways

  • Understanding customer jobs and outcomes is essential for creating value in services.
  • Open banking and financial regulations significantly impact service delivery and quality.
  • Cultural differences play a crucial role in service perception and delivery.
  • Technological advancements offer new opportunities for enhancing customer experiences.
  • The value exchange concept is pivotal in understanding customer and business interactions.
  • Service logic and customer-oriented tools are key to understanding customer needs.
  • Regulatory compliance often leads to minimal changes rather than fundamental improvements.
  • The shift from product-based to service-based perspectives can enhance customer value.
  • There is an observed decline in customer service satisfaction, indicating room for improvement.
  • Effective use of technology can revolutionize the user experience in retail financial services.
  • Innovations in service delivery are crucial for maintaining competitiveness and customer satisfaction.
  • The digital transformation in customer service is more than just a technological upgrade; it’s a strategic shift.
Interview Transcript

Hi, everyone, I’m here with Graham Hill today, he’s a senior associate with Optima partners. And you do a lot of work just in terms of service quality decisioning governance. And I know you’ve had a long background, having worked in management consulting advising firms as well. Yeah. So Graham, Thanks for Thanks very much for joining me, thanks for having me. We first got really just starting to talk a little bit about value exchange, a term that been bandied about in terms of open banking in particular, but there’s also this wider piece around value exchange in terms of business. And I know you had some interesting kind of perspectives on that, and how we measure about that and how we think on it. Yes, it is, if you think about it, most of our,

as customers, we have stuff we want to get done.

And we interact relative access to resources to get those jobs done those jobs to be done faster, easier and better. And in getting those jobs done and achieving the outcomes we want. That’s how we measure success. That is our definition in the simplest terms of value. And there’s a whole load of obviously, it’s a whole load of study and going back over a long period of time, the concept of axiology, the study of value management and value systems. And they’re also pragmatic tools like or theoretical pragmatic tools, let’s put it that way, like service dominant logic, that helps to understand how do we interact with customers? How does that actually work? How do customers measure value? How do we co create value during those interactions, and that’s the sort of what I’ll be doing. last 15 years, Bob, Bob lush and Steve Vargo, who worked with the people and systems logic in 24 22,004, actually, long time ago, I’ve been using that thinking ever since. And it is a sort of this value exchange is a foundation of most of my consulting work, either implicitly, because we’re designing communications, for example, that you can share value or products or pricing, or implied in terms of how you divide design complex service systems that facilitate exchange of value, which is what this is all about. Yeah. How common Do you find that kind of thinking is I’m saying literally, I came across in the open banking world, which is like, why don’t people want to use open banking? And so we’ve got to be some sort of value for them, particularly in in collections. And then in collections is why what’s the value in getting people to make a payment? As an example, how common Do you find that kind of thinking is because certainly for me, it came across as a relatively new, I suppose label for something we probably know about. But it seems a relatively new kind of like theory really, do you find it’s common in terms of thinking as so? not common, but getting more common? If I look at if we look at student logic as a foundation, the work by Vargo and Lusch. That’s revolutionised. I think it’s not unfair to say it’s a revolution, it’s almost a paradigm shift in how service academics think about or so as marketing, academics think about value. So in the past, it was always about products with inherent value built in, versus these rather tatty. Second Class Citizens have services and experiences something that’s entirely different. That’s changed with viabilities paper. And so we don’t want to get to now 1000s of papers out there. What goes into service marketing, academia, comes out to people at my service, because I’m trying to looking at papers and think about how I can apply those things in experts in our clients, in the consultants and now into service designers. So I’d say quite a significant proportion of sought for service designers have a pretty good understanding of service dominant logic as a way to think about things and have a pretty good experience of using tools like Tony always jobs to be done, that I mentioned a second ago. So what a cause was trying to do not what do they do you force them to do things they might not want to do, but what are they trying to do? And how do they measure success, the desired outcomes used as the foundation to understand the value exchange in a system legit. So it’s becoming more widespread, but is still relatively

caveat. Everybody talks about because my jobs these days, hardly anybody understands what they’re talking about. So it’s become one of those buzzwords like agile that people widely use without understanding the origins of the meaning. And how do you actually do it properly? Because there’s a huge difference. If you do it properly, it makes a massive difference, compared to not doing properly it. Worked by Tony or worked with the guy who trained me in 2009. Egypt’s been one of the founding fathers of jobs to be done thinking that kind of an innovation. They’ve done research that shows that if you use a job space outcome driven innovation approach to innovate new products, and experiences, you can have an 80% success rate, which is very different to the demonstrable, 80% failure rate for most inventions, but 90% for startups that we see out there in the big world, water gets an 80% failure rate by having ideas and inventing things 80% success rate by having a customer driven innovation approach that’s worth some money. Yeah,

Now mixing the UK with consumer duty is obviously coming in. And this is a wider theme around treating customers fairly good customer outcomes. I think just like globally as well, you see the various regulators sort of building on that, it feels like this is going to become ever more important in terms of how do you generate a good customer outcome? How do you have fair value? And how does that then relate back to value exchange? So are you adding value back to the customer? How would we need to start thinking about that, particularly as we go through our customer journeys and like thinking about what does that relate in terms of good customer outcomes? Yes. That’s a very good question. But I think the question or the hook in detail.

If I thought I wrote a white paper a year ago, now you’re going September, on how do you think about the customer consumer duty coming increase where FCA, we’re going to get the introduced a legislation 2021 to do with vulnerable customers, which is somewhat similar in many ways and as a precursor to the consumer duty. And I thought there was three opportunities that retail financial firms had when it comes to consumer duty, there was a there was an approach which a tiny number might take we to say, we’ve already done all this because of the vulnerable customer very quickly to 2021. So you don’t really need to do a great deal now. But that’s I don’t think that’s really viable. Personally, the number two viable approaches, one is what I think of as review, you’re going to review our products and our processes and our customer service, and our complaints and look at outcomes and compares us with the competitors and blah, blah, blah, and make some cosmetic changes like we’d have financial firms usually do when it comes to legislation haven’t been MiFID happened to GDPR. I haven’t noticed things before that, or does an alternative approach, which is to be new a picture to see, okay, this is a chance to gain a competitive advantage over our

competitors. By becoming more market oriented, so more customer oriented, more competitor oriented and being really good at bridging the gap between the two internal capabilities. My expectation was that most retail finance firms would take the review approach, which I think is what they’ve done. And a very small number hardly any really have taken the new approach and say, Okay, let’s rethink things around the value exchange in customer outcomes. And our outcomes, of course, as well. It’s not overnight charity, we’re not trying to give away everything for free. So they left money on the table. So in many ways, the consumer duty for me is unfinished business. Now, there was a review a few months ago that the FCA did looking at the obviously went around looking bearing in mind, the first half of the consumer duty was due to be invited into June, I think it was this year for current products. And the next half, if you like for the pre pre previous products that are longer offered, but are still in operation. But by June next year,

they have taken that review of what the what a what the various retailers, finance firms have done. And reading between the lines, my take in is they’ve done what they need to do to knit from a compliance perspective to comply with the legislation. They haven’t really picked up this idea that if we are better if we understand what he was trying to do, and why did he interact as June which interactions which touch points in which journeys, we can make things faster? Is it better for customers, we make ourselves more productive as well, because if you think about it, other than financial engineering aside, the only time a company makes money creates value or destroys value for the customers or for themselves, is when they interact with customers as an exchange of value. Everything else is a cost. Everything, see me when he wouldn’t read it with customers, everything else is a cost. If you don’t think about customers outcomes, you’re potentially leaving money on the table.

It was this one last thing.

A few years ago, I did a piece of work for a UK retail bank, and looked at their customer journey for mortgages. And who is the marketing programme and we’re trying to create a proof of concept for journey orchestration tool. So I went through the process of mapping out all the interactions in the customer journey from the customer’s perspective, not from the bank’s perspective. And looking at what collateral or marketing collateral information, they provided each of those stages. And there was lots were really quite catastrophic, in my view. So most of what they provided at various interactions was not really fit for purpose in terms of what the customer is looking for. And so the customer as a result went looking elsewhere and says how will universe of brokers and third parties providing information that the banks should have been providing, and they would have invited to take an outcome driven innovation or a jobs to be done based approach but didn’t hadn’t really picked it up at that point in time, leaving the marketplace of new competitors.

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And why do you think they haven’t taken that sort of review approach? And is it just like fear over the cost or what’s involved in doing this sort of wider kind of like journey mapping? What’s been the barrier is it just is it time and money or

is the fear justified or not? That’s a good question, though. My own I’ve had lots of banks over the years and more than dozen have it in various countries over the years. Think about it. quite conservative organisations. If you look at the recent legislation, or at least opportunities to switch your account how a few people did even be on the basis that what you’re going to get up to as the same, they have no different real products or services or experiences, it’s all more or less the same. And even with a new startup banks, it’s not that different, or in some cases actually worse, or at least news articles. So I think for most organisations, several things. First of all, they leave things too late.

So they know this Lucia has come a long years in advance often, but they leave it till the last minute to do anything. So I was involved with Gryphon, one in competition in the Netherlands a few years ago, my client lifted right to the last minute to do the various changes required, there’s quite a big change method, one

that they needed to make in terms of how to deal with this and it was intimated business, it’s not the same as GDPR. Now sort of same with the, the consumer duty as well. So that’s one thing. Second thing is, if you go if you want to go through a renewal process, that implies a lot of change. But change is difficult. Change is expensive. And large corporations have a history of failing catastrophically, that change in terms of transformation. So that’s one thing. I think the thing is that all the retail finance institutions or firms are going through a continuous and expensive process of transformation through digitization. What digital transformation really everything is digital since the beginning, but bits and bytes for decades anyway, but everything good to a digitization change. Now we’ve got AI into the mix as well. I think they’re busy with other things. So this is just another one of the things I need to put tick in the box. I can’t I don’t want to compete around market orientation. I’m going to be live during all the years in the past, and we’ll be fine. And we’ll go on to the next piece of legislation in the next whatever bit of time it comes. How much do you think we get guilty of? Are you remember the saying around? I think it was how do you eat an elephant and use it slice by slice? I think it is how much do you think we get caught up in the fact that things just seem so big, even taking, for example, consumer duty, it just seems so big and tough to reinvent everything is I can’t handle that. So I’m just going to basically just just tick the box as much as I can versus is there? Do we get caught up in that? And is there an opportunity to look at using these techniques to look at it in a much more subtle, a smaller bite sized kind of way and take it out chunk by chunk? Another good question. Certainly it is very complicated. If you think about any if you want to go to renewal process, so there’s a piece of work you’re doing around analysis you want to but it also implies changing products, so that they are designed to produce the outcomes that customers want. And Boeing we’re not all because we want to see outcomes. So we need a different variations. But it’s only to an object oriented Product Catalogue approach where I can mix and match things that’s radically new, it probably means getting rid of products that aren’t really appropriate anymore. That’s where we’ve difficult most companies fail to get rid of, or excise out old and obsolete products and replace them with new ones or when they’ve already been replaced by new ones. It’s very difficult. And also, no one person or one organisational part has power over the entire thing. So think about the the retail finance journey. I’ve got product development and product management involved. I’ve got pricing and voltage usually outside of marketing, good or bad reasons. I’ve then got marketing the sales and service and operations. And it’s a really complicated picture. And it’s very hard to make those changes in a organised way unless you really have to, that’s the body has to make those changes to do to deal with the compliance for consumer duty. They’re going to do what they need to do to get him to put the tick in the box. And if they’re fortunate enough to good design may generate some advantages in the process, compared to the competitors who aren’t so careful, certainly with consumer duty at the spirit of it is to look at some of these things in terms of generating fair value, at least anyway as those things. So it does tend towards that kind of route, but probably over the longer term. I feel rather than it being something that’s happened to me. Did you see that sort of companies ever getting there? Or do you think there’s I think yes, so therefore, you’re simply not enough until I need to tick next box? Yes. So look, look at FCA corpse, the operating model legislation, regulations, TCF teaching customers fairly business has been around for a long time with its five or six principles from I don’t know how many think six principles in total. It hasn’t really had a need, other than this such broad principles that are relatively easy to be able to show that you comply with them. They haven’t really had all that impact that when I look at consumer duty, although I see the emphasis on consumer outcomes as part of that.

The lens it didn’t really provide a definition of outcomes to

Which rather leads you to the which is just about saying that we don’t want Cadillac compliance type legislation that we have in the USA, where we have so many rules and such strong penalties for breaking any of them that get this Cadillac thing that nobody signs up to, in the end result of a show and various research papers.

What I think is that as a result of that, then

the opportunities that are afforded by something like consumer duty to think differently and to produce better outcomes, just get missed. And they get, as you say, as you imply, kicked down the road. We’ll deal with that later. Should we get time but you know what, you never get time because there’s more did this legislation come along? And there’s there’s other CMA legislation coming out, there’s going to be coming out shortly that will affect the banking consumers as well. It’s gonna be more FCA regulations that have been now picking up some of the progressive issues to do with equality and diversity and what have you, rightly or wrongly added. So that’s really the FCA is remit, but it is currently, or which equates creates more work. And that opportunity to think about the customer and the value exchange gets left to those who own a product, or own a journey or own a part of the journey like onboarding credit card, for example.

And there’s nothing tricky, which is also which I think is quite important.

If you look at a lot of financial instruments, particularly those used by those who are vulnerable, and there’s a statutory definition of vulnerable, there’s also a good common parlance version, which is a little bit broader. Look at those who have challenges with making good financial decisions is how I think about vulnerability, then, a lot of products are designed by accident, from what we know today. So behavioural economics in a way that you would, you wouldn’t actually design them that way in order to achieve equitable outcomes. So a simple example, credit card.

So we know the impact of paying buying now and paying later house on overspending. It’s been known for a long time, it’s been well researched by behavioural scientists. And yet, we still design credit cards with reference to very little impediment to picking one up that allow people who are vulnerable and have a demonstrable history of difficulties managing their finances, to take on board intimate that will encourage them to overspend. When you have difficulties with being in debt. What did the debt advisors advise you to do? Advice, you take cash, and put it in a series of jars marked food and clothing and other things. And when you run out of money, that’s it. You’ve run out of money until next month, credit cards are designed to overcome that by accident, I suspect but we know the impact. Nobody thinks about rearranging and redesigning these things. We’re creating black pattern, no dark patterns, as Michael Bartlett would describe them. So how so if we’re sitting there in a business? How do we start thinking about starting some of these processes? And what’s the almost like the practical advice? If we do not work in credit risk or in collections and recoveries? How would we start doing that because it feels like there’s benefit from looking at value exchange, trying to start to map that out mapping out from a journey. And even if it start making small changes, then that’s a step further ahead, than reinventing a whole process or a whole product, what’s your kind of advice on getting started to think about because it doesn’t get back to fair value that comes back to me, right? It’s like everything leads to value, its price, and cost, value, and worth those four things that all in close proximity with each other. But giving an example something different, but in a way, one thing you might think about doing so

you can’t take you can’t bite off that Oh, heaven, elephant in one chunk, as we mentioned, signal if you take it in small parts, and I think also that aligns with how we what we understand about successful change today. So 98% of transmission programmes fail. But so do 80% of the uses of any new technology, whether it’s ERP, CRM, CxM. And now, data science and AI are still 80 to 90% failure rate. We know why that isn’t. And part of the reason why is because first of all we have are two things. First of all, we have a visionary driven view. So here’s where we would like to be in the future. And we’ve all seen needs vision packs from consultants, or from our clients, looking at saying This is wonderful. And this is certainly fantastic. But we’re completely with something completely different. Now, what is a different plan? And how are we going to get there. And they never get implemented as a consequence. Because we start to change process from where we are now. The understanding of our constraints that we have which support or get in our way, one step at a time. So we need to move into what would be called vector beta, vector driven changes work by David Snowden, and Linda door from memory, the kinetic Institute. So that’s one element. And I think the other element is, we already know a lot more about customers than we think. But we don’t often use information. For example, I worked with the

Especially during a piece of work for a European airline, they will need a bit of help looking at recovery and one of their networks suffered from structural change to the customers behaviour.

And one part team looked at structural elements of how we encourage customers to to fly again. So pricing lesson and my job is to look at another part which to look at. Okay, let’s look at randomised selection of customer verbatims, or complaints, compliments comments. And they had about five to six to five to 10 sales in the months. So plenty to play with. They took a random sample of those verbatims literally customer verbatims mostly complaints. And I use that to extract out of those, the jobs to be done that because was complaining about not getting done, ie what’s important the customers. And after that we got we found around 80 to 90 core jobs. So the things that customers are trying to do, and they still win, so they tell you about it. Then we use a structured process of identifying what we thought customers expectations would be to get those jobs done better is just for the top 10 jobs using a 1990s service quality model, the rater model, so derived from the server core work, so reliability, assurance, tangibles, empathy, responsiveness. So we looked at what would if each of those 10 jobs what because we’re expecting those things from a combination of working with frontline staff and further analysis of the customer verbatims. Then armed with that, understanding the top 10 jobs, things that they were mostly concerned about, and they’ve covered 75% of all comments about those top 10 jobs. We then identified 60 to 70, very targeted interventions, to help customers get their jobs done faster, easier, better to solve the problems that attributed that were accounted for 70% of all complaints to the airline. Subsequently, I did the same thing for housing trust in the UK, same challenge, same approach, obviously different business. I think there’s I the 35 years I’ve been working in consulting and service quality, a lot of that time. Hardly anybody looks at complaints or comments and analyses them properly. Identify the customers jobs, what they’re trying to do is important is determine between what they do and what they’re trying to do. So we create complicated

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processes experiences for customers to go through our pathway, there’s I think about them, they don’t make content to the customer often don’t make any sense of the company either. But they’d be there for a long period of time. So it was didn’t that way. And so that’s what we forced to do. The customers want to do something different. Often. So by asking them what they want to do, and how they measure success expectations, we have the best possible foundation to identify what to do differently, it’s our job to do that’s not the customer’s job, and to produce improvements as a consequence, either large scale improvements, or lots and lots of small ones. But purposes for the latter, it seems to me like there’s almost like four categories there’s and going back to your your white paper or future vision documents. They’re a bit like the concept cars in financial services or consultancy are out there. But there’s almost like, what we think people our customers want, what customers think they actually want, what they want, we’re actually going to give them as a business and then what they actually want. And some of those things might they may intersect or they might not ever a secretarial what a customer actually thinks that they actually want might not be actually what they end up really deep down wanting or needing to get the job done to a certain extent. But there’s a fantastic cartoon image called the project. It says what the customer wanted and it was basically a swing on a tree. And it was like what the analysts designed what the be what you got built by the consultants is like huge roller coaster customer support, which was basically a burnt tree this you’re describing that basically so this is this is why we’ve been looking at ways to understand customer’s needs and wants for a long period of time. And the challenge we have is there’s too much noise so if you ask as a as an as a not an it’s not a non market research what customers what they want. They’ll tell you about their needs things that must be able to do things they want things I would like to be able to do I think about features and attributes and all sorts of other things as well. And it’s any good with an innovation and marketing thing oh you need a new we need to communicate better you’re gonna sell so many new product good customer service well that’s gonna be another tunnel that country probably then they have different opinions. There’s too much noise when Steve sorry when Tony oh it created the jobs to be done concepts and 25 years ago when it came a simple structured language to capture customer job

and to capture a customer desired outcome or

expectation if you like,

those things are readily adaptable into use cases, customers and into customer requirements in terms of desired outcomes, by quitting is common language, all of that the cacophony that we hear otherwise, when you go to talk to different perceptions disappear. And that’s a really fundamental part of capturing what customers want. Using job statements and outcome statements use the outcome driven approach from Tonio work. In my experience I’ve been I was treated 2009. I’ve seen lots of different innovation approaches over the years from open innovation, Sue to lead use innovation, what have you. It’s by far the most effective way that I’ve ever seen to do innovation and seeing what customers really wanted it Fuzzy Front End. Yeah, I’m just looking at think you’re making me think of social media, actually, in terms of if you were to ask me, What do I want to see on my tick tock account? As an example? I’ll give you some stuff around? How would you do? So I would, I would tell you what I wanted in terms of it might be science might be news, there might be certain particular topics. But then what do I actually click on? And what do I actually need to look at it will be actually quite different. And it’s my algorithm isms are very different. And there’s almost like this perception almost like even with our in our own brains, internally, the conflict between what I think I want and what I actually want or what I think I need versus what I actually need to get stuff done. And I suppose it must be quite interesting with data these days to be able to almost unbundle some of those, I suppose the different scenes marketing and operations to

the next the over the years. And look, we’re doing this a long time now looking at customer jobs. We know that the jobs by and large, do not change over time, what changes tools we’ve got to use to do them, and our expectations and how they will work. So if you think back a long time ago, when you in your great grandfather’s time, no doubt in your Sweetland the stately home, when he wanted music,

String Quartet to come and entertain in the parlour before the gentleman went off to have port and the ladies went to do knitting or embroidery in those days. Then of course, on came 70, eights, and then 40, fives and 30 threes and tapes and then I then CD ROMs or whatever. Then I pause until you got Spotify. It’s the same job isn’t to music, what’s at home, or but I can also listen to me while I’m travelling. That’s when I can’t do a string quartet. And I can also create and organise jobs, there’s a whole list of associated jobs you can do at the same time. Our our jobs don’t change the tools do and what we expect how we expect to work change as a consequence. So social media to the example of that, that we have communications jobs. And rather than write to your aunt, or pick up the telephone, I remember the days of landlines, shared landlines and rarely pick telephone on our farm at home and and make sure that hope the neighbour over the road wasn’t using that on his farm wasn’t used the same telephone line. And now we’ve got social media. Now if I want to send the reader the gas metre reading to the gas company, I sit in the WhatsApp message with a picture of the metre. That’s all I need to do. And they do all this themselves. So you say same job communication, different tool, debit expectations. That’s interesting. You we think we think the world changes a lot. But actually, a lot of it doesn’t change a lot. It’s just the speed and the tools change right? So precisely. And sometimes we sometimes we change the person doing the job do you take a new job that somebody else might have done in the past so good cases, I was looking for something and the strategy and ODI stuff a while ago. In the olden days, if you wanted to, when you have go to your annual checkup with your dentist, they would clean your teeth and whiten your teeth with all the tea and whatever you’d had in meantime, today, you have the whitening strips, use yourself if you’re interested those sorts of things. So you’ve taken a new job that previously belonged to somebody else they do justice job. But often you’re going to use a new platform to do things as well so that you can do things yourself and social media good example of a different platform to do the same job that somebody else would have done in the past or you during the past but needed a different platform. And of course today we have multi sided markets.

So it’s not only you use a platform provided by company A to do something you’re going to do with them in a different way in the past anyway. Now you’re gonna platform and platforms are things that bring together millions of customers with 1000s of providers who normally wouldn’t meet Amazon, eBay, credit card. Frequent Flyer programmes are all examples of technology powered multi sided markets. We come together to do things that we couldn’t do it but we didn’t know these other people. So one question I have some I know you do work outside of the UK, you do work a lot of stuff internationally as well, which is consumer duties, obviously UK legislation, but how much do you see this working in other markets where you work? I think the value exchange stuff doesn’t change. We’re all kind of humans what how do you sort of write like different levels of adoption and different levels of thinking in terms of markets that are good versus markets? Maybe the developing those kinds of things Germany kind of perspective on that.

So that’s a good question. I

of what I do live abroad. I live in Germany, I’ve lived here for 30 years, so I have a bed. Most of my work has been in the UK in the past, although I’ve worked in I think there’s a lot there’s like 1515 or 20 Different companies countries around the world. There are certainly differences and those differences, cultural differences. Good Hofstede, I wrote a book about cord cutters consequences in the 1980s, which I used to use in the past, it looked at five different factors that you can use to different up to how different cultures relate to each other. And the way people could relate to each other power distance thing was also within factors. So there are different cultures when it comes to expectations of service. And maybe we all know that in order about America’s legendary friendliness of service. But if you go to Asian countries like Japan, so the Japanese have a concept called a modern, ashy

motto, I used to work for Toyota. So we used to talk about a Motrin and elixirs we still talk about a botanist is sometimes a mattina, she is the art of being a good host, and exemplified in in the Japanese tea ceremony. And part of that is understanding in detail your guest who’s going to be coming

and understanding what they’re really like. And arranging those things so that when they do come to you, you get it in the everything, they really list there. And it runs really smoothly. With an amount of simple flair that somehow only the Japanese managed to do.

You can contrast that with some

European, historically, anyway, European companies out there was talking Godzilla and Germany about being a service booster, a service desert, where you don’t get much service, because because it’s not the way things are, I think it’s quite proved, I think there’s elements of that was not as true as it used to be. If you contrast that, maybe some of the cultures where service isn’t really part of things part of their daily business at all, with Japan, and one of the extreme and companies in Asia, long. Live in Singapore, for one, they’re also extremely service oriented. So there are differences. But at the end of the day, as you quite rightly pointed out, the thing that knits them all together is the value exchange. And of course, what I values isn’t things i value aren’t always getting functional things done. I also value the also things jobs don’t have emotional, I want to feel about myself, and associate how I want to be seen by others, the example I was using when I teach people about or train people in jobs to be done is think about transportation, if I want to go from A to B, then A very simple data, cool, I’ll get me there really quickly and easily without any problem at all. But if I wanted the most good, I feel really good about myself that I might want to have something, maybe a Range Rover, because it wouldn’t be there any faster any better. On average, not sooner if you live in London with the average speed of 11 miles an hour. But you’re saying something about yourself, I can I’ve made it I’m successful, I can afford a Range Rover and pay the community, the congestion charge in London. But then there’s social debate about how to be seen by others. So we’re on the range of what if I got a Lamborghini, people look at Lamborghini. And they already have this it was you see Lamborghini, in a drug dealer. Or they’re very successful in life that they can afford a Lamborghini and they have the style and flair to drive one. Say we have social emotional trouble as well as functional jobs at all. They’re all part of the mix mixture when saying what customers value. They’re only about getting stuff done. Yeah, I suppose if it comes down to that, go back to the value exchange piece and just just take an example. Use an example historical example of Germany the way it used to be. And maybe it was just much more pragmatic around getting the job done as rather than the and that’s what that is being valued rather than good Pam, where it’s where it’s where it’s actually what’s being valued, there is actually the service and how I feel about it. And, and that might have changed since and I do think it has been changing as we realise. But yes, and so I was looking at the syllabus a little while ago, a friend who was doing a training to become a degree in the sports industry, as look at the marketing syllabus in German. And I was quite surprised and taken aback for a second by differentiate between service Dienstleister and providing the mechanics of providing a service and the emotional element of ServiceNow. As Anglo Saxon people as Brits, we take the two things be inextricably linked. You provide a service, and there’s an emotional element as well in terms of not only providing the physical elements of ABC of the service process, but also being friendly towards the customer. The message in the German textbook is that they are different and you focus on the process. And the service is almost optional, but the price is what matters. So you get this thing where you go to gym and shop sometimes more in the past, whereby you get a very rigid process

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But they weren’t necessarily very friendly. And if they were going to push you to close the shop, half an hour before the shop was due to close and you had cash in your hand to buy an item, they would decline, because they were now closing the shop and you’re just a bloody customer. On the other extreme, where they place so much emphasis not only on the suit, but also on the human element, the Japanese moto Nasha approach.

Lexus competes on a moto Nashi the pursuit of perfection in the service relationship much more than than any other luxury brands I’ve ever had the privilege of working with. So we do have that extreme whereby in the middle, we take it as Anglo Saxons we take service as a process and services and experience if you like, for granted.

In some countries, Germany in the past these services are prisoners more important than experience. It simply isn’t the other extreme like Japan, perhaps certain in the past, then the press has already worked anyway, because it’s Japan. But the emphasis is on the experience that you have sublime as possible. It does feel over the last sort of 10 or even 15 years that that’s those sorts of differences have been eroding. And the other comment I was going to make is, when you get to know countries a little bit more, it’s never quite as simple as from an outsider, you look at it. And actually, every country is a lot of people, you get countries, people of all sorts in every single country. And it’s way more complicated than that. Almost like we have this simplistic views from the outside as well. We are simplifying speeches, we spot patterns, and we simplify them around our produce we already we’ve had before we actually imported the buttons, just so I don’t have tea with the queen every every afternoon for that country. But it does feel like it’s like we’re going towards a much more. It’s becoming more homogenised in terms of being more there’s more similarities seem to be growing in terms of how we relate to each other as well. Which I think if you think about it, with the globalisation of technology, if I think of customers, if I think of call centre customer service, I can think about a German or UK for I think about lens end, we call into lands end and it is the most sublime experience, you can possibly have a customer service like they don’t do enough to help you just to buy another pair of trousers or a jacket because it’s going to be cold. So those things come into this one isn’t my point early one that our expect the jobs don’t change. But the tools we use change and our expectations of service. This is the key no model thinking. The things that today yesterday we took for good. We’re really differentiators today are table stakes. And tomorrow, they are things that we can disrupt and remove without any problems, because now nobody really needs them anymore. Yeah. So where do we go from here? What do you see as the outlook being in terms of, I suppose, value exchange, but then also thinking about products where it was the trajectory.

So I think my belief is, it’ll get worse before it gets any better. So if I look at the sample, the Customer Service Institute use the UK CSI score every year. And as the ACSI in the USA, its customer satisfaction. And it’s been falling quite a bit over the last few months and years. And it’s reached its lowest point in the last I think, and look recently as since 2008 for memories is now the lowest point since 2008. So it’s certainly a very low point in time, driven by COVID. Because there’s a lot of companies to remove service as a new security and excuse all the new is cutting costs and living by other complexities as well. So I think my belief is that the service element and fellow exchanges about service provide providing resources the benefit of another that’s definitely for service. So village cheese is about a shopping shopping service for putting resources in that way that it’s a great value. Don’t it’s going to get worse for a period of time until companies like they do.

You can cut so far, then you start to realise, you know what, there’s actually an advantage becoming more customer oriented.

Here you’re gonna find what competitors are doing so do better than there are but not overdoing it, and fitting value in the process. So I think what we’ll find in the next year, or maybe a year and a half, that somebody will start to realise we’ve cut back on customer service. We’ve said look of costs went up. But we’ve now worked on how to do remote service provision because people now working from home run work in the call centre somewhere potentially, we’d have recognised as an advantage to be gained in providing a higher competitive level of customer service than the alternatives available. And we see the cycle of waxing and waning of customer service of service quality. But it’s all down to get wrapped up in the guise of customer experience. Yeah, so

we’re waiting for the wheel to turn out.

But it’s no different to recessions. We have a recession, nothing gets cut. We’d go to possessory engineering and then at the end of the recession, we start to grow and expand and and it’s no different in some ways, except the one thing I have noticed though.

There’s this has been an explosion since two non late 1990s or an epoch

In 2010 2028, or 29 2008 2009, when Pine and Gilmore wrote the book, the experience economy which kicked off the customer experience Revolution,

when you read the book and I remember reading one of them the whole instead of France avidly is because those is gonna be the next big thing. And I was crazy, it wasn’t expecting the emphasis there is on the experiences theatre to some extent. So creating happy memories if you like. And I think that’s distracted. A lot of companies that are thinking about how do we create memorable experiences rather than customers don’t come to memory experts, if they come for service, they want to get access to stuff to help them get their jobs done, and get the desired outcomes faster and better. If you do that, you get an experience in the process anyway, whether you like it or not, because you could create an experience by interaction you have with a person or company or machinery or whatever it may be. We’ve lost track of the quality of service driver of this experience, once we focus on this peripheral element of memorable experiences. And so often we what I see today is, I see the marketing, the sizzle of the customer experience being advertised. When I go to consume that service, the steak we go for is missing, you get a rockin service, dressed up in this nice fluffy experience wrapped around it doesn’t work, people go for service to get an experience. So given the damn service and the first bit design it to be fast isn’t better than competitors. That’s definitely good advice in this, the digital world that we’ve been going into an investment around that in terms of is it just a cover that’s sitting on the top or actually a little bit more fundamental in terms of, as you’ll say that sort of that value exchange down or more sort of details kind of product level and the digital is actually is going to kick in, I’m not gonna buy AI in this particular case, it’s going to introduce a whole new way of thinking. So in the past, we took inbound and outbound communication with the customers, they talked to us to the core, send them an email a letter, and we talked to them through communications or outbound calling, whatever. But most of my customers don’t buy and I don’t care much for marketing and sales isn’t there’s nothing, it’s non value, and it’s just a chore they have to go through to get something the value for customers is when they start to use the product or the service they bought to get their jobs done the design outcomes done satisfactorily. So all the value is in use, not in ownership or buying up. So companies focus on all those things in marketing and sales, and then neglect the usage experience.

And that’s where the battle so technology allows the customer to drive much more of that user experience themselves to change settings and parameters and, and make interactions so that we can manage them dynamically. This is the future battleground of retail financial services is in the user experience not in marketing, not in sales, not in customer service. It’s all gonna be about the user experience. And technology is absolutely critical to manage those interactions and making those interactions and coherent journey orchestrating that journey for value for both customers and for banks as well. Yeah, I suppose making it seems like that’d be music to a lot of people’s is just

rocket science. Yeah, it’s common sense. Why isn’t so common? Yeah, yeah. Yeah. Well, Graham, thanks very much for making the time as we said, we’d have enough to talk about so we had enough, more than more than enough to talk about. So I appreciate your insights is fascinating. And gets me thinking about value exchange, how to think about it a bit of a framework of thinking about it as well. And it’s a little bit different than than we might hear elsewhere. So I really appreciate you taking the time. Thank you for having me. It’s been a real pleasure talking to you, Chris. Thank you


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