Thursday, October 9, 2008

Good service = profitable customers

John Seddon has written some wonderful stuff on the application of Lean principles to service organisations. Of particular note is the link among efficient process, customer experience and cost of operation. It's a "cake and eat it" situation: efficient processes make for a good customer experience and low operational costs. Good service also contributes to top line performance: i.e. good service makes for profitable customers.

I had a perfect counter-example with my ISP this week. I'm with Virgin, who are generally OK as long as the system is running. Email has been intermittent recently, and went down again 2 days ago. I checked the online status page - which informed me everything was OK. I called the freephone status line which told the same story. My internet access was up, I could still access gmail, just couldn't get my virgin mail. So, I thought I'd let them know they had a problem. I called the reporting line, navigated the IVR forest, eventually arriving at the usual musical entertainment. After 5 minutes I gave that up and decided to look for electronic submission instead. Sure enough there's a form to submit, the contents of which are mind-numbing. Nevertheless, I persevered.

I got the usual immediate, automated response telling me they'd look in to my query. 2 days later I got the following message:

Thanks for getting in touch with the Virgin Media Support team.

We're sorry that you are having problems with your e-mails. To help with this we need to get your issue resolved by our colleagues at

In order for your support query to be dealt with efficiently, could you please click on the following link:

This will ensure that the correct team will receive your form.

The link points to another page from whence one may submit a query (quite how and virgin media differ I have no idea - and to be frank, don't really care). So it took 2 days to register my complaint, generate a unique ID in their tracking system, and invite me to re-submit my issue. Why? I can't say for sure, but I'd stake the combined value of the UK banking system (or the loose change in my pocket, whichever is greater) on the following:
  • Virgin's customer service team have targets for responding to customer queries (the website states 48 hours)
  • My query was edging towards the target, so someone (or something) decided a response was needed.
  • So they sent me another stock email that didn't solve my problem, but hey it met the target - so that's good, right?
Well, no. It's not actually. At the start of the debacle I was mildly inconvenienced by the service outage. Not a major problem. But now I'm really irritated. Not only was the submission form ridiculously over-complicated, I've had 2 pointless, valueless emails from which the only message is "we haven't looked at your mail, but please feel free to re-submit again".

In other words: "this is a service call. There's no money to be made from service, so we won't really give it much priority".

Of course, had I wanted to upgrade my package, I could have called any of the numbers emblazoned on the web site and spoken to someone instantly (I tried, just to make sure). What Virgin don't seem to get - and they're by no means in a minority - is the influence of service on the customer relationship. Sales are key: cold calling, outbound marketing, lead generation systems, the list goes on. Service? That's a necessary inconvenience.

How wrong they are. Good service is a - maybe even the - key factor in a customer's propensity to terminate a relationship. Companies would save a lot more money by keeping their existing customers instead of spending vast resources attracting new ones. I was reasonably happy with Virgin before this debacle. I'm now researching alternative ISPs.

Update 3/2/09: I'm no longer with Virgin. I found another ISP who responded quickly and personally to my initial inquiries and were knowledgeable and professional. They managed the swap without fuss or problem and have been similarly responsive with a couple of service-related queries since. So good in fact, I recommended them to a friend who has similarly just moved there - from Virgin. Enough said. What's more, they're more expensive than Virgin were - considerably more than the reduced rate the Virgin adviser promised me if I stayed put.

(And final joy of joys: BBC iPlayer now works flawlessly. Wall to wall Top Gear!)