Category Archives: CEOs

Adapting to change by putting Customers at the center of everything: Lessons from Macquarie Telecom

Transforming Unhappy Customers into Happy Customers

“The Only Thing That Is Constant Is Change” – Heraclitus 500BC

It’s hard to believe this quote is from more than 2000 years ago… I can’t think of a more relevant quote to describe the times we are living in right now!

From a business context the change we are experiencing is the rapid shifts occurring in customer expectations and behavior. The companies that are embracing this are the ones that are winning and will continue to win in the future.

The question is how do we adapt to this changing customer environment, stay ahead and stay relevant?

Many forward thinking organizations are using increasingly sophisticated customer experience metrics to stay in touch with what their existing customers are experiencing. Specifically they have embedded these processes in a manner that makes it part of their organizational culture – we call this a “Customer Culture”. A great example comes from the work being done at Macquarie Telecom, a leading Telecommunications firm in Australia.

Macquarie’s CEO, David Tudehope, has taken a personal interest in leveraging the Net Promoter Score (NPS) methodology to help drive a customer centric culture. NPS is essentially a simple way to measure customer advocacy. It is based on answering the question – “How likely are you to recommend us?” on a 0-10 point scale. While a great methodology, it is not the right one for every business. What’s more important than the metric is the fact there is a focal point at which all employees can focus on and work together to improve.

For Macquarie, leveraging this methodology has been transformational. It has raised the visibility of the importance of customer experience on customer retention and ultimately business performance. It has also served as a goal that aligns everyone and drives collaboration across the firm.

What have Macquarie learned from their transformational journey that you can apply in your organization?

  1. Engage everyone in the journey – measure every significant touch-point as everyone has an impact on how customer’s experience the company
  2. Be Transparent – display results for everyone to see so teams can see how others are performing and compare results
  3. Celebrate individuals and teams – share great customer stories and celebrate teams with high NPS scores
  4. Integrate into hiring processes – hire people with a desire to create great experiences for others
  5. Customer Success gives employees meaning and purpose – connecting people’s roles with the impact they have on customers provides meaning, inspiration and purpose and will derive up engagement levels and ultimately people’s performance

What are the results?

Macquarie’s NPS is 60+ which means they have many more promoters than detractors (see this post to compare Macquarie’s NPS with the most customer centric companies in the world). While they are not the best in the world (they can still improve), they significantly outperform their competitors in the space they play in.

To read more about how to begin the journey to a customer centric culture, get a copy of our book, the Customer Culture Imperative or learn about the Market Responsiveness Index.

What happens when you don’t have a corporate culture obsessed with customers – Lessons from United

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A man is forcibly removed after not giving up is pre-paid seat on a United Flight

We witnessed one of the most extreme examples of what can go wrong in a business that has truly lost sight of its purpose.

As a former United Global Services member (United’s top tier for frequent fliers) I was appalled at how badly United handled a relative routine situation that probably happens multiple times a day in various cities across the US. What on first pass looked like the removal of a potential terrorist happened to be a paying passenger who was also practicing physician.

United sometimes over sells airline tickets in order to make sure they fill their flights and remain profitable. I am not against this practice, it makes business sense. However when this impacts customers, (and it inevitably will) this becomes a true test of an organization’s customer centric culture. Will it do what’s best for the customer? (A customer centric view) or will it protect a short term myopic view of its profits for that particular flight (a transactional view).

In this case United choose its policy and procedures over doing the right thing for its customers. Clearly there was an upper limit on what was available to be offered to make this situation right for their customers. United claims they offered $1000 to passengers to take another flight so that crew members for another flight could board to go to another plane – there were no takers. Instead of upping the compensation to a point that passengers felt like it was a fair deal, they decided to pick passengers based on their frequent flier status and other connecting flights. Three left peacefully although clearly unhappy and one refused resulting in the social media and traditional media storm that came after a video showed the passenger being forcefully removed.

Company Centric CEO Reaction – Oscar Munoz

Those of us that work in the culture space know that the CEO and top team set the tone and shape organizational culture.

Oscar’s initial response was to apologize for having to “re-accommodate these customers”. While externally he made attempts to diffuse the anger at the situation internally he sent a memo to employees that defended the crew’s actions, calling the passenger ‘disruptive and belligerent’ and praising his staff for going ‘above and beyond‘.

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I understand he wants to stand behind his employees, support them and not throw them under the bus for this incident but really he was trying to “protect” the company and the United Brand. This message also reinforces poorly thought out policies that do not get to the heart of what great companies do – they have a culture that puts the customer first.

Finally, two days later Mr Munoz has accepted responsibility for the disgraceful incident:

“I continue to be disturbed by what happened on this flight, and I deeply apologize to the customer forcibly removed and to all the customers aboard………. “No one should ever be mistreated this way.”

A colleague of mine recently relaid an experience he had in a very similar situation on an Emirates flight. He said they just kept increasing the enticement to get of the plane. Eventually enough people took up the offer. They ended up giving away 2 business class return tickets from Australia to Dubai  as well as accommodation plus $US600.

This price was small compared to what United will now go through…..

United takes a $255 million dollar bath.

The value of United has fallen by $255 million as a result of this one incident and the bad press and social media storm surrounding it. How much were they offering passengers to deplane again?

Eric Schiffer, CEO of Reputation Management Consultants, termed United’s handling of the incident “brand suicide.”

“When you go onto a United flight, you shouldn’t have to be concerned there will be blood or you will get slammed in the face,” Schiffer said. “I think you will see an effect on sales from those who are disgusted by the gruesome action. And it’s catastrophic for a brand’s trust.”

No doubt United will lose customers and it deserves to, what comes next is a question of leadership and culture.

If all employees have a customer centric mindset and are empowered to do what is right by the customer this would not have happened.

That’s what we do at MarketCulture. We help companies understand the importance of putting the customer at the centre of the organization – a mindset that establishes the idea that “What’s best for the customer is best for the business”