My first weekend job was working for Woolworths in the mid-1980s. It was a perfect job for a teenager in a small Cumbrian town, being the only retail outlet in the town that sold music. Its ongoing drive to focus on customer service made it also a great job to temper teenage arrogance and selfishness.
At the time I was at Woolworths, the customer service incentive scheme was based around the concept of giving customers a ‘warm fuzzy’ feeling and not a ‘cold prickly’ feeling. There were even cartoon characters created to illustrate the concept of ‘warm fuzzy’ and ‘cold prickly’. Childish as it may seem, it was innovative and effective.
The scheme began with an intensive, extended training course for all store managers on the purpose, nature and benefits of the programme. The outcome of the course, for the majority, was complete buy-in to the objectives and the ability to ensure good customer service was always provided.
The incentives for all staff at the time, from boardroom to stockroom, were based around this customer service drive. Staff had to be witnessed providing good customer service by line managers or by the one of the many secret shoppers that were sent around. Store managers were rewarded on the success of their staff in providing good customer service and customer feedback on their staff.
Once the programme was rolling, alongside the ‘warm fuzzy’ feelings, Woolworths introduced the EXCELLENCE programme to encourage staff to achieve a broader and deeper understanding of all the products that were offered by the store. This ensured that those staff who achieved ‘excellence’ could talk to customer intelligently about all products offered. For every stage in the training programme achieved, the member of staff would gain another letter in EXCELLENCE.
Incentives were given, not only through recognition of good customer service and excellence, but also through financial rewards, with significant pay rises for those who achieved all their letters in EXCELLENCE. Innocent as this may seem to today’s more cynical observer, at the time this was a massive culture change in the company from head office telling staff to provide good customer service to staff at every level believing that good customer service provided significant reward and job satisfaction. Despite the ultimate fate of Woolworths, this programme was a resounding success.
banks cannot solely measure those outcomes that breach the rules – a compliance requirement, they also need to measure the outcomes that comply with the rules too – a conduct requirement
So what can the financial services learn from this?
The first lesson is to follow the Financial Conduct Authority’s lead and strive to give the customer a warm fuzzy feeling. Although this is not the wording of the FCA, the FCA have recently rebranded and repackaged their customer care programme for all banking staff; instead of the remote sounding Statements of Principle, we now have the Conduct Rules. It is an important rebrand. Instead of ‘statements’ we have ‘rules’, which gives much more weight to the content. Instead of ‘principles’ we have ‘conduct’, which is probably the most tangible change.
Principles tend to be something we have within, an intention to do something right; conduct is the way that we behave, an observable outcome. The FCA has stated that the conduct agenda is intended to be an extension of its outcome-focused regulation seen in the Treating Customers Fairly regime, and the term Conduct Rules lets us know that the rules should be used as a framework on which firms assess outcomes. But in order for this to be successfully implemented, banks cannot solely measure those outcomes that breach the rules – a compliance requirement, they also need to measure the outcomes that comply with the rules too – a conduct requirement.
So how can learning and development help?
In order to instil a conduct culture that focuses on good customer outcomes at all levels of the bank, we need to ensure that there is complete buy-in at all levels of management first. This requires an understanding of what good customer outcomes look like for the bank, what barriers are in place to prevent these outcomes occurring and what can be done to overcome or eliminate these barriers.
Although these ideas need to come from within the banks themselves, effective external facilitators can help initiate, guide and develop discussion in focus groups in order to achieve a desired goal.
All staff should be provided with a framework on what is expected of them in the provision of good customer outcomes, and good customer outcomes should not always be seen as a front office responsibility. All stages of the service add to good customer outcomes, for example: recruiting the correct people to provide the service, providing the customer service, and supporting those that provide the service. All staff should know what their role is, what outcomes are expected of them and how their role links with others in the provision of good customer service.
Again, focused group discussion can help develop this framework. However, there may also need to be external training on how these customer outcomes actually impact upon specific roles. Case studies and roles plays that are designed with the business to provoke intelligent discussion on the meaning and application of good customer outcomes are an effective way of doing this.
Once there is buy in from senior managers, and specific outcomes have been set out for all staff, there is a ready-made framework through which to recognise and reward staff for fulfilling their role with a focus on good customer outcomes. Although expecting the banking industry to give customers a ‘warm fuzzy feeling’ may be expecting a bit too much, there is a lot that can be learnt from the customer service programme Woolworths were engaged in thirty years ago.