Posts Tagged ‘corporate strategy’

www.customersgetstuffed.co.uk

Tuesday, December 21st, 2010

The current snowy weather has exposed one of the most insidious aspects of how cheapskate companies have exploited the internet in the last decade or so — by outsourcing customer service to the customers themselves.

In normal circumstances, this can be quite empowering — rather than have to phone up a call centre or turn up in person the customer can cut out the intermediary and access information more directly. The classic example is travel — now everyone can access an airline or tour operator’s systems via the web rather than have to go into a high street travel agency. This also demonstrates why the internet isn’t really in itself such a paradigm-shifting technology — all it has really done is connect the devices that people use personally (computers and now phones and other innovations) with the commercial systems that organisations have been using internally to run their businesses since the 1970s or 80s.

In many call centre or customer service situations the person you interact with is really just there as a conduit to access the IT systems — and in the vast majority of cases this can be made user-friendly enough for a customer to do themselves over the web. And customers can now access information that previously wouldn’t have been cost-effective to pay employees to give out — like where exactly your train is meant to be on the line.

Even the likes of Twitter and Facebook aren’t really new — messaging services and bulletin boards have been in existence on private systems for decades.

Online shopping is an odd mixture between new technology and antidiluvian business processes — as Amazon and others have been discovering, parcel delivery is their Achilles heel. I’ve ordered Christmas presents from Amazon that, according to their whizzy, integrated tracking feature, have stayed in the Royal Mail’s distribution centre in Scotland since 9th December (12 days now).

No wonder Amazon tried to grow as big as quickly as it could because its basic business proposition is very unoriginal and easily copied — basically plugging web browsers into wholesalers’ catalogues. There’s little difference between Amazon’s bookshop and the old-style book clubs that offered members 4 books for £1 — just a more interactive catalogue.

Amazon has also set a very bad precedent in trying to handle all its customer service online. Phone numbers disappeared off their site as soon as they got big enough as a company to afford not to care too much about their customers. When they first started off in the UK around 1997, Amazon’s customer service was brilliant — I got several unsolicited free gifts. Try and contact them these days and all you get is some auto-generated reply and if you try and get something more personal you may be lucky and get an e-mail a few days later from someone in India with a very vague understanding of the problem.

In fact, every time I try to contact Amazon they annoy me so much that I don’t know why carry on using them. In fact I do — they’re cheap and their competitors, such as Waterstones, often can’t get their act together. I had a reading list of books to buy for a course and wanted to get them from Waterstones but their website kept being unavailable at the time.

Amazon has plainly gone for cost leadership and size — and if it’s customer service is irritating then it’s usually only some goods that have gone missing.

Plenty of cheap-skate companies inspired by penny-pinching, unimaginative managements have tried to use the internet principally as a means of cutting their own costs — thinking technology is a clever wheeze that would allow them to get the customer to do unpaid work that their own staff used to do. They can get away with this when processes are simple and straightforward but when things go wrong then this cynical attitude to the customer is ruthlessly exposed.

So airlines like BA have been encouraging passengers to use their own labour and materials to check-in and print out boarding passes so they can eliminate check-in desks at the airports and the staff that man them. It doesn’t seem to have occurred to Willie Walsh and his band of asset strippers that an airline, unlike Amazon, doesn’t just dispatch packages — it transports people — and these people need information, require food and accommodation when delayed and become very upset when they don’t get either and are piled up in airport lounges like a pile of delayed mail in a sorting office.

Also, pointing people to the web to get information in emergencies is useless because companies, both for reasons of cost and security, only expose the simplest and most straightforward functions of their IT systems via the internet. In a shop or call centre there’s almost always an ability to over-ride the simplest rules on the system — to allow a discount or impose a refund for example — because the company has given someone the authority to act with that discretion. This can’t be done in a self-service way.

So for complex interactions with its systems, a company always needs to have staff — but, because the vast majority of sales can often come online, these staff are seen as a necessary evil as they incur cost rather than generate revenue. Therefore they try and employ as few as possible.

BA asking its customers to rebook online is plainly ridiculous for a customer-facing business — how can customers self-prioritise their needs — for example distinguishing between passengers stuck in transit at Heathrow for four days as opposed to tourists jetting off for a bit of winter sun? Also many IT systems that are aimed at customers don’t get updated quickly enough to reflect exceptional operational circumstances — Chiltern Railways (who are way better at customer services than most train operators) were running an emergency timetable yesterday that bore no relation to that on the National Rail website.

People make the most ridiculous claims about the internet and the web and say how much it has changed everything — in the area of customer service I’d agree that it has had a big transformational effect — for the worse.

Strangest Places to Camp?

Sunday, April 11th, 2010

I thought this was quite funny. Often shops pitch tents up in pseudo-idealistic scenes but I was quite surprised to see where they’d put this example in B&Q.

B&Q Tent

B&Q Tent

I thought it quite amusing to imagine there was some sort of squatter living on the tops of their shelves. Even without this anarchic interpretation I was quite puzzled as to why they’d pitch the tent there where most customers wouldn’t see it –the photo was taken from the recently-added mezzanine level which has the show bathrooms and kitchens.

Spying on the Spies

Thursday, March 18th, 2010

Like most web users I’m an almost habitual user of Google search and I remember being one of its earliest adopters around 12 years ago when the likes of Yahoo and Alta Vista were the dominant search engines. I’m also quite an enthusiastic user of some of its derivative services, like Google News and Maps and I’m a tentative user of Google Scholar. However, I’ve thought for a while that its influence is far too dominant on the web to the extent that its famous motto ‘Don’t Be Evil’ is pretty meaningless — it’s almost irrelevant whether the people running this size of organisation are evil or not (and it would be very surprising if they were) as the fact of its very pervasiveness and power is inherently a ‘bad thing’.

I’m particularly suspicious of its plans to ‘digitise the world’s information’ because of its potentially disastrous effect on intellectual property rights — potentially creating much more widespread damage than Google News is currently wreaking on newspapers. Showing that these principles are generally as old as the hills it’s a classic case of killing the goose that laid the golden egg. It’s amazing how many people’s considered judgement is disregarded by puerile ‘my enemy’s enemy is my friend’ arguments because Murdoch’s News International is the biggest critic of Google in this area. If Google undermines intellectual property principles then it will be the viability of the small, niche publishers which vanishes first — not the Digger’s empire.

I also find Google’s arguments that it is a mere directory and conduit for other content to be completely disingenuous. It could make a lot more effort to remove links to illegal material — it’s just a cost that it doesn’t want to pay. After all, when it came to a question of making money or not in China it was happy to side with the censors then. Moreover, Google’s business strategy is primarily now devoted to loading content on to its site — either through user e-mails, videos or blogs or by uploading cheaply sourced material like scanning books (out of copyright ones for the time being). One of these sources of cheap content that I’m not convinced about is Google Street View so I was very interested to see the spy camera car in action today around Princes Risborough. It was happily cruising around taking six photos at once of everyone and everything on the road around it so I followed it for a while in my car with the objective of taking a picture of the spy vehicle itself.

Google Street View Car

Google Street View Car on Station Road, Princes Risborough

When the driver realised I was following him he seemed to get quite agitated — quickly pulling over to let me past but I then stopped in front. After all what’s wrong with trying to take a photograph of someone who’s literally taking thousands of photographs with the sole intention of publishing them so everyone in the world can see them? I got a couple of photos but decided not to follow too long as I didn’t want every photo of Princes Risborough to also feature me. As far as Street View goes, I can see it may have some limited value in very public places like city and town centres but I can see no benefit whatsoever of it taking photographs of residential streets. They just do it because they can — and if an organisation has that sort of ethos then it’s on the slippery slope to becoming what some people may term ‘evil’.

Google Spy Car

Google Street View Camera Car on Poppy Road, Princes Risborough

Google should learn the lessons of other companies who have tried to dominate a platform — Microsoft has arguably inflicted more damage on itself with disasters like Vista which no doubt had root causes in the company becoming too big for mistakes to be spotted and rectified by competent managers — maybe managers whose time was being taken up fighting anti-trust suits. In desktop terms Microsoft really fulfilled what customers wanted with XP and late 90s/early 200os versions of Office. It’s a feature of global capital that it demands ever more growth but the pursuit of this is problematic when your company’s products have met about 95% of what any customer will ever need. Perhaps Google is in the same position now. It should stop expanding its empire — concentrate on what it does well — boring old search and leave the intrusive, customer-alienating expansion alone?

See Lindeman’s Tollana Shiraz/Cabernet Being Bottled

Sunday, February 7th, 2010

Ever wondered how Asda and Tesco can sell their supposed £6 a bottle wine for 3 for £10. One trick is to cut the distance between the manufacture of the glass bottle and the place where it is filled with the unctuous liquid. In the case of Lindeman’s Tollana Shiraz/Cabernet the distance is probably about a few hundred yards.

If you look very carefully at the label you’ll see the wine is bottled at CH2 4LF — doesn’t sound very Australian as it’s not. It’s actually on an industrial estate, not near South Australia’s Barossa Valley, but next door to the picturesque Stanlow Oil Refinery on the plains of the Dee outside Chester (yes, in Cheshire). You can see an aerial view here.

It’s a long way from the old French ‘mise en chateaux’ guarantee of quality as the Aussie wine is transported in bulk to its export markets and bottled close to its eventual consumers. There’s a sound environmental reason for doing this — it prevents carbon being wasted by unnecessarily transporting the weight of glass bottles around the globe (and it also means the recycled bottles don’t need transporting back again.) However, it’s an interesting reminder of how economics and globalisation have made the wine come to the bottler and not vice versa.

The concept is taken to its extreme in Chester as the bottler is also the glass maker — a company called Quinn Glass. They even have a video on their website of the 400 bottles per minute production line where your Aussie plonk is put into bottle — get to it via their filling page.  They also operate a bonded warehouse which means they can hold their customers’ stock so they don’t have to pay duty until the wine leaves the premises just before delivery. It’s a clever and lean operation with the cullet (smashed up recycled glass) arriving at the factory and conceivably being turned into a full wine bottle within hours. There’s no doubt this ingenuity must knock a substantial amount of the cost of a bottle of wine — which makes the con of something like Hardy’s Crest being retailed at an RRP of £9.99 even more ridiculous than most people already realise when they see it perpetually ‘on offer’ for £4.99.

Quinn don’t just do wine. They do beer, spirits, alcopops — the lot. One interesting page on their website exposes the manufacturing process for a lot of drinks: ‘Product can be processed at sales gravity or high gravity product then diluted and carbonated. Flavoured Alcoholic Beverages and soft drinks can be made from concentrate or from a recipe.’  That is to say that a lot of commercial drinks are watered down on bottling. Again, it might be an economic and environmentally smart idea to produce alcopops or even beers in concentrated form although it makes the stomach churn to think of what some concentrated version of WKD or Smirnoff Ice might be like.

Boeing Has A Dream(liner) — Nightmare for BA

Wednesday, December 16th, 2009

The infamously delayed Boeing 787 ‘Dreamliner’ actually got off the ground today – two and a half years late. This is a pretty good achievement seeing as one of the latest delays was caused by a fairly important structural flaw — apparently the part of the plane where the wings join on wasn’t strong enough. It wouldn’t have been much of a dreamflight if the wings had fallen off. According to the BBC, the wings managed to stay on for the duration of the test flight, although it landed earlier than schedule.

BA has 24 of the 787s on order but the papers have been speculating whether BA will even exist when they’re ready to be delivered — not because of more interminable Boeing delays but due to the death-wish that the management seem to want to inflict on the company. Willie Walsh seems to have backed himself into a corner — trying time-wasting wheezes like trying to sue the company over technicalities. He should look at the majority in favour of industrial action instead — 9 to 1. That can’t be blamed on militant union bosses — it’s the result of catastrophically bad management. This is no surprise when the company can’t decide whether it’s a low-cost airline that abolishes free food or an upmarket brand for the business and more discerning end of the market.

The BBC’s reporting of the strike has been woeful. They ask people who’ve booked holidays on BA what they think of the strike — what sort of response do they think they’re going to get? Yet the next item on the news is about Copenhagen and climate change. While there are people travelling over Christmas for necessary reasons there are an awful lot of the BA customers who are just jetting off for a sunny second (or third or fourth) holiday — so we’re expected to emote when Samantha and Toby can’t easily take their brats to the Caribbean for Christmas but then wring our hands over climate change? It seems like the editors of certain broadsheets are peeved that their own getaways are possibly being jeapordised — the Independent bizarrely wants the union to play down its huge majority for action.

Another inconsistency and hypocrisy is that the management of BA has the customers’ interests solely at heart — those nice men. Think who installed an abrasive chancer like Walsh into his position — the back-scratching clique of institutional shareholders like pension funds, stock market gamblers, hedge fund managers and so on. Exactly the bunch of economic micro short-termists whose judgement (along with Brown’s complacency) landed us the credit crunch. BA’s management has no-one’s interests at heart but global capital.

It’s a hugely irresponsible management that has had this strike ballot pending since the summer and seems more intent on provoking a showdown than resolving the underlying issues. They are a bunch of chancers and the union has hugely called their bluff by planning a strike of a length that would cripple the company. (For one thing, if all BA’s planes were grounded they would have no room for them, certainly at Heathrow.) The Daily Telegraph is considering if BA will be completely destroyed. It seems that Walsh is about to hand Branson and O’Leary a nice Christmas present.

Mars and Sexists?

Thursday, November 19th, 2009

I must side with my friends the feminists and express outrage, shock and horror at the latest Marks and Spencers TV advertisement. (See it on the Guardian site here.) Let’s recruit Stephen Fry (oh, we can’t as he’s in the advert himself) and organise a mass Tweet of outrage at the sight of a French underwear model appearing in a television advert for a shop that sells, er, 25% of all women’s lingerie in the UK. Or is it the corrosive sight of Philip Glenister as Gene Hunt threatening to lure all men back to Neanderthal 70s sexism — his line ‘That girl prancing around in her underwear’ is incredibly demeaning to women, isn’t it? Ah, but he was at a bar drinking. We’ve already got bans on young people enjoying themselves drinking in adverts — maybe we need to ban washed-up, semi-alcoholic seventies throwbacks from endorsing products too? The funny thing is that companies like M&S spend thousands on focus groups to find out what television actors and celebrities their customers empathise with (‘Our research shows that his on-screen character in Ashes to Ashes is extremely popular with our customers and his lines in the ad are in keeping with that role’). It’s difficult to believe that M&S would pay Glenister’s no doubt large fee without being fairly sure about his popularity with their core customer base, which is principally women.

BA’s Bum Year

Friday, November 6th, 2009

In the old days before its management came up with wheezes like charging passengers for choosing seats and getting rid of food (see previous posting), British Airways used to make a profit in the period April to October while usually making a cyclical loss in the winter. The new management have taken the cyclicity out by ensuring the airline loses money in the summer too — to the tune of nearly £300m.

Perhaps the twin track strategy of destroying customer service and constantly antagonising its own workforce is a deliberate attempt to turn BA into a low-cost airline? There can’t be any other explanation for this wanton destruction.

Sad Geeks Reward Desperate for A New Vista?

Wednesday, October 21st, 2009

I’ve just seen one of the saddest sights imaginable — a straggle of IT geeks were queueing up outside PC World at the top of Tottenham Court Road waiting until midnight so they can get their sweaty fingers on Windows 7 (yes, I’m blogging  from a moving train!). Apparently there’s a massive demand for the new Microsoft OS which shows one of two things: a) people have forgotten how many bugs Vista originally had in it or b) people are so unhappy with Vista they are desperate for something to replace it with (even if it’s from the same pedigree as Vista). Of course there’s also option c) — that the IT industry is populated with dsyfunctional, anti-social freaks who thrive on novelty and their possession of some bit of software that no-one else has yet. However, that’s a given.

I use both Vista and XP and have never really ‘got’ Vista. Although my version seems to work ok, it seemed to be designed by some marketeers who wanted to replace old features from XP for the sake of it. Perhaps there’s a way of getting back some of my favourite XP dialogues and short cuts but I’m not prepared to waste my life in discovering them (not being an aforementioned anal retentive geek — though sad enough to blog on it, if not queue up for it).

Pubs — The Preserve of the Middle-Class?

Tuesday, October 6th, 2009
King William IV Speen

King William IV Speen

Today I drove through Southcourt in Aylesbury: a large, 1930s-60s housing estate which was originally almost all council housing. Such estates used to be bastions of working-class ale drinking but the smoking ban and the credit crunch have finished off two of the three pubs and the closest pub in the direction of the two centre is also shut. A pub that tried valiantly to keep going in the face of cheap supermarket beer and home-based entertainment like videos and Sky TV was the Steeplechase, which did some decent real ale at times. It has been boarded up for a year now and is a sad sight.

However, on the bright side, a report partly supported by CAMRA and publicised on the BBC website reported that cask ale was the only type of beer now with growing sales and partly because twice as many women enjoyed drinking it in the past couple of years. There was also a very interesting report on the Radio Four Food Programme about hops and their use in real ale — which gave an opportunity for Roger Protz to yet again claim that beer is far more interesting than wine. The brewer at Brewdog commented on his Punk IPA, which the female presenter found very tasty. (I love this beer and its weaker sister — Trashy Blonde — Brewdog are so non-pc they even make an 18% beer.)  The programme noted that the trend towards using more (and more assertive) hops started by US craft breweries and is now being adopted by ale brewers here. Such beers have to either have a high alcohol content to balance the bitterness or need to be drunk in much smaller quantities (such as thirds of pints) to be palatable.

The two themes above suggest that there’s a trend for both beer and pubs to lose their long-time association with the working man and instead to become the preserve of the middle-classes. A valid criticism of CAMRA is that while it has spectacularly succeeded in preserving real ale and increased the variety available, it has done so mainly for the benefit of a minority of beer snobs and tickers. Real ale is not the drink of the working man any more — that accolade was lost to lager a long time ago — the fact that real ale quality is dire in a large number of workaday, non-CAMRA-Good-Beer-Guide pubs might have a lot to do with this. However, it seems that these sort of workaday, average, unremarkable pubs are the ones that are suffering most at the moment and, as the cask report says, it’s the affluent real ale drinkers who are able to afford £3 a pint in the pub and don’t go for the £10 24 can Stella pack at Tesco as an alternative.

So perhaps the saviours of the English pub as we know it are the middle-classes, much as that might be an anathema to some of the more revolutionary founders of the real ale movement. The middle-class seem to have saved real ale and pubcos should perhaps target these high-spending, but demanding customers more. Another factor in the pub’s favour is brought to mind by having forty-something politicians paraded at the party conferences over the past couple of weeks: it seems the annoying, social-skills free nerds that inhabited student politics in the 80s are now making their bids to be the annoying, power-crazed nerds that run the country. But if that’s reflected in other walks of life there may be a silver lining in that the middle-class, especially Generation X who are entering middle-age, have very fond memories of the pub from their student days (mostly rose-tinted in terms of the amount they drank and time the spent there). Yet this almost sentimental attachment to the pub as a hub of student life might yet save the great British institution. The middle-classes might not be propping the bars up swilling ten pints of mild a night but they might be pretty solid campaigners to ensure that pubs are still there for people that do.

Crown, Sydenham, Oxfordshire

Crown, Sydenham, Oxfordshire

To illustrate the point there are a number of examples of local pubs being saved from closure by being bought by (presumably relatively wealthy) members of the local community and re-opened and run on a community basis. The Unicorn at Cublington and Crown at Sydenham, Oxon are good examples. I went tonight to a pub, the King William IV at Speen, that’s not owned by the community but run in a way that is designed to be community minded — to the extent of having a small room of a perfect sized for committee meetings. It also has an ice-cream parlour selling locally sourced ice-cream. A group of local charity volunteers were also enjoying the evening in the pub. These pubs aren’t, of course, exclusively full of middle-class people but they’ve benefited from the sort of activism that the middle-classes (and, dare I say it, CAMRA) have shown to be very successful.

Skinflint Airways

Monday, September 28th, 2009

Further evidence that current BA management is continuing to lose the plot comes thick and fast. Most recently was their ‘Enhanced Seating Policy’ — http://www.britishairways.com/travel/flightops/public/en_gb?p_faqid=3863 . This raises the prospect of people travelling together, like families, having to pay extortionate prices to sit together on one of BA’s flights. Charter airlines like Thomson have been making a tidy profit on this particular wheeze for a few years now (in practice it’s pretty unlikely that groups of passengers would be seated apart anyway unless this was done deliberately by the airline). BA are planning to charge £50 to book an exit row seat (a tax on tall people, perhaps?) and £10 per person per sector in Pig class — which would work out at £80 for a return for a family of 4. The irony is, of course, that if air travel was a remotely pleasurable experience then passengers wouldn’t be scrabbling around on the Internet to try and bag themselves the best seats of a bad lot.

And how much does it cost BA to bring in this technology? Hardly anything. The facility to prebook seats has been around since about 1985-6 on BA’s reservation system, having been bought from KLM in the mid-90s. What may have cost a little is adding a bit of code in to siphon money for the privelege out of customers’ credit card accounts.

What this shows is that BA’s bonkers management seems to be dominated by the sort of penny-pinching, marginal revenue obsessed idiots who have no clue about maintaining the brand value of a full-service airline. It’s only a few weeks since food was phased out on most Euro traveller flights. Now they’ve gone further down the low-cost airline route. This might make sense if BA had the remotest hope of competing with the likes of Ryanair and Easy Jet on costs but with a ‘mature’ workforce and operating out of high-cost hubs like Heathrow then this is pie-in-the-sky.

As with upmarket retailers like John Lewis, BA must compete by convincing customers that it represents value and, while it won’t be the cheapest, it will provide the best service.

Whenever companies introduce something like this that means poorer service and higher prices, it’s funny how they always say it’s in response to ‘customer demand’. I have a theory there is a special focus group for hire of masochistic individuals who make their living from telling market researchers ‘Sure I’d like to pay more to the company and get less for it.’  Probably the only company who wouldn’t make use of this resource would be Ryanair, whose strategy BA seems to be increasingly trying to ape.