How to Run a Customer Obsessed Business
Simon Groves, Chief Marketing Officer, Tesco Mobile
This article has been taken and edited from a speaker’s presentation from a previous Customer Experience conference.
I’ve had experience with a couple of different brands, I’ve been with Tesco Mobile about four and a half years now, and prior to that I was with O2 for a long time.
The O2 journey is very well documented, spun out of BT and sold five years later to Telefónica for 18 billion Euros. A great story of transformation from what was essentially a technology centric business to a customer centric business. From a business that was fourth out of four in the UK market on pretty much every metric to a business that grew to become number one across the board (including for customer experience metrics, and brand metrics) is a pretty well-known story.
I was fortunate enough to be at the heart of that transformation of that business, so I’ve got some thoughts and experiences to share from there, as well as Tesco Mobile. Tesco Mobile is a little bit more of a hidden gem, Tesco Mobile is much less well known, but an incredible business actually that I was very fortunate to join. They are absolutely customer obsessed, we have been Which? recommended provider for the last seven years running, we regularly get MPS above 80 in our retail channels. We just celebrated having the lowest level of complaints of any operator for three years running now, in the Ofcom survey, so a really great customer obsessed business.
Put the Customer First
Two themes which are really obvious, (blindingly obvious in fact,) is in some of the colour underneath these in terms of what we’ve done. The first theme is around truly really genuinely putting the customer at the heart of your brand and business strategy. That’s the first thing I believe that any business has to do if it wants to be customer obsessed end to end. The way that we approached this in O2, and broadly in Tesco Mobile as well, is that we don’t treat the customer experience plan as an add on or an overlay, or a different team’s responsibility in the business to deliver. It’s absolutely integrated into the central brand and business strategy of the organisation, right from the brand purpose at the very top of the pyramid. What are we trying to achieve for our customers? How do we bring that to life for our customers through the product services interactions that we have with them? All of that is underpinned by the functional strategies across every single area of the business, so what are we doing in our marketing plan, in our customer service operation, back in our operations, our network? All of those plans aligned to underpin the customer promises and proofs that in turn underpin how we’re positioning ourselves to customers throughout our brand narrative and our brand purpose.
By doing that you make sure that customer experience and a customer focus is in people’s day-to-day plans, rather than being an afterthought that people will get to if they have time, (which they never will,) then they’ll worry about the customer experience. If it’s embedded in a strategy then it becomes everybody’s day job.
I’m always suspicious of businesses that have very, very large customer experience teams, and have customer experience plans that feel like they’re a thing by themselves. Because in that scenario it’s very difficult, the customer experience becomes the problem that that team has to focus on and worry about every day, rather than the customer becoming the thing that the entire business is focused on, regardless of role, regardless of function. If you embed the customer agenda in the strategy itself then you also avoid ‘we’d love to deliver a good experience but we can’t afford it’.
Additionally, when the customer experience team are pursuing it as a thing in and of itself, rather than pursuing the customer agenda as a fully integrated part of the strategy, in order to deliver on the financial results and the key KPIs that the business is striving for, customer experience is one of the key ways that you are going to deliver those – not something that you do in addition to delivering those. Furthermore, it also lets you more fundamentally realign your investment priorities to the things that customers care most about. So if you’re trying to pursue a customer agenda on the side, inevitably the levers that you have at your disposal to pull are relatively limited. Whereas if it’s embedded right at the heart of the business strategy you can make some much bigger, much more powerful calls about where you invest in order to support the customer agenda.
Don’t Just Fix the Basics
Another thought is whether we should consider at times being a little bit bolder with what we’re doing. In regards to O2, we we’re fourth on pretty much every metric, all of the customer experience at the time was pretty poor. Within the business there would have been a natural temptation to focus on the basics, because there was so much stuff to fix. Consequently, there was a line of thought that said with so much to do there we should realign all of our investment to fixing the basics, and once we’ve got that right we can then worry about other things.
We didn’t do that, what we did instead was we had a huge focus on fixing the basics but equally we challenged ourselves to see if we couldn’t also come up with some really compelling different reasons why customers would pick us, and some real opportunities to try and change the game. The insight at the time was that customers felt they weren’t valued and they were not rewarded by any of the operators, and this applies still in many industries customers don’t feel valued. So what we did in O2 was as well as fixing the basics, we made a huge investment at the time, in a commitment to reward customers loyalty. We put it into our proposition strategy and it became the major thrust of our advertising at the time, in terms of loyalty rewarded, and has become the thing that O2’s now known for. Because O2 had built on that over the many, many years with its sponsorships of the rugby, O2 priority and so on, it became the platform for differentiation that O2 still really focuses on. But it was born out of challenging ourselves to do more than just fix the basics.
The other lesson that we learnt from earlier in O2’s transformation journey was that when you do fix the basics, where you’ve made some progress, you can’t necessarily rely on customers recognising that, because the nature of its incremental improvement. We spent the first year or so trying to fix the network quality in O2, because it wasn’t good enough, there was loads of great work done; the network quality became market leading. But we didn’t see that in any of our customer experience tracking. We saw it very, very slowly ticking up, until we talked about it on TV, at which point we saw a big step change in customers’ perception of network quality. I think what we’d forgotten for a little while is that perception is reality. It’s all very well that you’ve fixed the reality, if we tried to bluff it we might have seen a spike when we made a claim in advertising, but it would have dropped off equally as quickly. But because we had actually fixed it and it was an authentic claim we communicated, the spike grew and then that improved perception sustained, because people recognised it to be true. Now that’s obviously really different from making false claims, or overpromising, which none of us would aspire to do because we all understand the importance of authenticity. But if we make an improvement we have to talk about it, we have to tell people what we’ve done in order for them to fully appreciate it.
Make Customer Experience Part of Your Integrated Strategy
Within that integrated strategy we make sure that we’re really, really clear what it is that we want to stand for and be known for for which groups of customers. The focus in Tesco Mobile is we’re focused on families and we’re focused on giving Tesco families in particular a more rewarding mobile experience. And so we’ve been relentlessly communicating that since probably about 2008-2009, through everything that we do. In terms of proposition innovation we were the first to offer capped contracts, so you could set a maximum spend level in a month and you couldn’t go over that. Absolutely fantastic for anybody who’s on a budget, but particularly fantastic for those of us that have teenage children who we want to put on pay monthly, because we want the extra value that you get over pay and go, but we are scared that they’re going to go crazy on downloading YouTube videos and ending up with a massive bill.
We kept building on that, we launched family perks and we’ve just refreshed it and done a big advertising campaign on that this year. That again is all about rewarding the families, making the family’s mobile experience more rewarding – when you buy multiple accounts from us you get a range of additional benefits and rewards. This goes all the way through into our trade driving activity, we’ve launched our latest trade driving activity, which is a partnership with Disney, where we give families three months access to Disney Life to enjoy this summer when they buy any product or service from us in this period. So through everything that we do, whether it’s brand, trade or propositions, we’re trying to reinforce the overall brand purpose and brand promise. This is a great example of integrating the brand purpose and the customer focus all the way up through and into the communications channel. Which again, doesn’t always happen when the customer experience team is too divorced from the business strategy, or from the marketing strategy and plan.
Reinforce the Importance of Customer Experience to your Employees
If you want to run a customer obsessed business you have to relentlessly reinforce that with your colleagues at every single opportunity. The first thing I’ve learnt over many years is that when you think that you’ve communicated in a compelling way what the strategy is and why, one of two things normally happens. Either you forget one of these particular angles in the communication. Different people respond to different types of communication, so some people will get really excited about the vision and where we’re trying to get to in three, five years’ time, and for other people that will leave them completely cold, because they just want to know what’s the plan for the next quarter, what are we going to do in practical terms to deliver that. Some people will really need the context, other people won’t care. Most people want it. This is a bit we often forget, our team want us to translate the strategy and make it really feel personal for them in their roles and relate it to their day jobs so they can see and feel how they’re going to contribute. So sometimes we forget one or more aspects of that when we’re constructing our stories. What we most often forget is that we communicate this once, we’ll have a big conference, we’ll disseminate a strategy booklet and we think that we’ve done our job. People don’t get it, and they don’t remember it unless you communicate it over again.
Which brings me to my final point, you have to embed it in every single thing that you do internally through the organisation. You’ve obviously got to do the basics really well. So the basics are things like embedding it in your performance appraisal, your KPIs, you might want to have a rallying cry. A good example from Tesco Mobile, we changed our customer experience from being outsourced to O2 to being outsourced to Capita a year or so ago. One of the things that we did was unique, and Capita have not done with any other partner anywhere in the world, is we insisted that colleague engagement was a contractual level one KPI in our contract. That’s the first time they’ve ever done that, but we insisted on it because we understood and knew that colleagues are only going to deliver a great experience if they’re feeling really engaged and looked after, and so we had to measure that as a level one KPI.
Every single time you communicate or you have an interaction, especially as a leadership team, there’s an opportunity to reinforce it as well. In the Tesco world one of the things our Heads do is every communication that they do, regardless of what it’s about, always links back to the core Tesco purpose that they’ve launched. Back in the O2 days when we were trying to effect the customer transformation, the first question the Marketing Director at the time would ask, when anybody came in to present to her, was where’s the customer insight in that? Very quickly everybody then starting worrying about and thinking about the customer insight, and making sure they were clear on that before they came into present anything to the leadership team. A simple thing but very powerful. There’s huge power in sharing great stories, amd Tesco are brilliant at this, they run their values awards, there’s a communication every week from our Heads to the whole business that celebrates a local story. It’s very powerful because you tend to get more of what you reward. If you celebrate success and celebrate people doing great things for customers, you get more and more of that.
Link your Brand with Internal Rewards
Often times we put a huge amount of creative energy, particularly as marketeers, into trying to bring our brand purpose to life externally, we don’t apply the same level of endeavour internally, and we really should. What we did with Tesco Mobile when we launched the Disney promotion is we made sure that as part of that deal we got all of our frontline colleagues to also get free complimentary access to Disney Life so that they could enjoy that and experience it, and therefore be able to talk to customers about how great it was. When we were effecting the transformation back in O2, obviously the launch of the brand was all about see what you can do, and bubbles was a big theme. One of the ideas there was they gave every employer in the UK a little bubble which employees put the things they’ve always wanted to do on a slip of paper in it, and then some lucky colleagues would get rewarded. Maybe you wanted to learn a foreign language, or learn a new skill; you put it in the bubble and the colleagues got an opportunity to then get funded to go do that.
Be genuine in really listening to employee feedback and seeking that out. So one of the things we do in Tesco Mobile, and it’s one of the most powerful things that we’ve done, is every single week we survey our shop, our core centre staff, and we ask them a simple question, which is how supported do you feel. So if you believe in kind of the inverted organisation structure whereby actually the Head Office sits at the bottom of the pyramid, and it’s there to serve the frontline who are serving your customers, then that is a great question to ask your frontline folk every week, how supported do you feel? You know, how good a job are we doing in Head Office to support you to give a great experience for our customers. When we started doing that survey two, three years ago, we were getting six out of ten, you know, it forced us to focus to actually fix the things that were holding our people back from delivering a great experience. We now regularly score over eight out of ten.
I joined Tesco Mobile as CMO in 2012. In this time, the business has grown rapidly to become the UK’s leading MVNO with over 4.8m customers. We deliver a market leading customer experience, being recognised by Which? as a recommended provider for the last 6 years running, and having the lowest number of complaints of any operator according to Ofcom.
The scope of my role includes: defining our Tesco Mobile strategy, building our brand, innovating our propositions and pricing, executing our marketing communications, delivering our trading plans, and driving our customer experience agenda.
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