Designing a Customer Service Strategy SEEP Annual Meeting & Workshops 23 October 2003 Monica Brand Senior Director, Marketing & Product Development ACCION International

Overview of the Presentation ACCION’s approach Objectives Systematic process Value proposition Customer Service Strategy Defining “good” service Key operational components Implementation plan Expected outcomes

ACCION’s approach

Objectives

Systematic process

Value proposition

Customer Service Strategy

Defining “good” service

Key operational components

Implementation plan

Expected outcomes

Design, develop & implement a customer service strategy, with two distinct components; To develop a organizational culture oriented around the client – internal as well as external To focus strategy on the most attractive customer segments Integrate and institutionalize the strategy Harmonize the service strategy with the sales & marketing efforts, as well as operations area Integrate the customer service function and consolidate the organizational structure Objectives

Design, develop & implement a customer service strategy, with two distinct components;

To develop a organizational culture oriented around the client – internal as well as external

To focus strategy on the most attractive customer segments

Integrate and institutionalize the strategy

Harmonize the service strategy with the sales & marketing efforts, as well as operations area

Integrate the customer service function and consolidate the organizational structure

Developing a Service Strategy: Systematic Process Phase 1: Analysis & Preparation Phase 2: Design & Development Phase 3: Pilot Test Phase 4: Roll Out & Transfer Analyze the situation: Diagram & revise processes to define baseline situation Collect information on the competition & industry standards Gather client information (data mining &/or primary research) Analyze information & develop benchmarks Prepare proposal & form working group Develop the strategy: Determine the relevant segments Review the degree of alignment of the offer & competitive advantages Define a reas of improvement & strategies by segment Analyze cost- benefit of technological support (help desks, 800 #s etc) Define new processes and objectives Prioritize activities Implement Pilot: Establish pilot parameters Finalize budget Establish operational requirements Test tools Prepare pilot site Train personnel Implement pilot Supervise & monitor Adjust strategy Define conclusions Integrate strategy in the institution Define strategic & operational implications Develop support materials Establish an action plan by region Train personnel Modify / upgrade systems Implement roll out Define follow up and monitoring plan

Analyze the situation:

Diagram & revise processes to define baseline situation

Collect information on the competition & industry standards

Gather client information (data mining &/or primary research)

Analyze information & develop benchmarks

Prepare proposal & form working group

Develop the strategy:

Determine the relevant segments

Review the degree of alignment of the offer & competitive advantages

Define a reas of improvement & strategies by segment

Analyze cost- benefit of technological support (help desks, 800 #s etc)

Define new processes and objectives

Prioritize activities

Implement Pilot:

Establish pilot parameters

Finalize budget

Establish operational requirements

Test tools

Prepare pilot site

Train personnel

Implement pilot

Supervise & monitor

Adjust strategy

Define conclusions

Integrate strategy in the institution

Define strategic & operational implications

Develop support materials

Establish an action plan by region

Train personnel

Modify / upgrade systems

Implement roll out

Define follow up and monitoring plan

Phased Implementation Analysis & Preparation Design of Strategy Transfer & Roll Out Pilot Test Evaluation & Follow up Mo 2 Mo 3 Mo 4 Mo 5 Mo 6 Mo 7 Mo 1

ACCION’s value added Specialized “Marketing & Product Development” Unit Systematized process for developing a customer Service Strategy based on: Best practices in the microfinance industry Innovations in the corporate sector (CRM, balanced scorecard etc.) Segmentation, based on: “ Attractive” clients (loyalty, risk, cost, mission etc.) Profile & performance of clients (“data mining”) Needs y preferences (qualitative research) Institutional focus: integrated approach to service

Specialized “Marketing & Product Development” Unit

Systematized process for developing a customer Service Strategy based on:

Best practices in the microfinance industry

Innovations in the corporate sector (CRM, balanced scorecard etc.)

Segmentation, based on:

“ Attractive” clients (loyalty, risk, cost, mission etc.)

Profile & performance of clients (“data mining”)

Needs y preferences (qualitative research)

Institutional focus: integrated approach to service

Customer Service Strategy: Components Customer Service Objectives: Institutional Vision Definition of “Customer Service” and Goals Priorities from view of clients– internal & external Industry norms and benchmarks Conduct Competitive Audit and Analysis Key Elements of the Strategy Analysis of research results (market & institution) Areas identified that require change Implementation Roadmap Prioritized recommendation for changes Outline timing and major deliverables

Customer Service Objectives: Institutional Vision

Definition of “Customer Service” and Goals

Priorities from view of clients– internal & external

Industry norms and benchmarks

Conduct Competitive Audit and Analysis

Key Elements of the Strategy

Analysis of research results (market & institution)

Areas identified that require change

Implementation Roadmap

Prioritized recommendation for changes

Outline timing and major deliverables

Loyalty Strategy Loyalty Segmentation Institution Competition Product Development Product Place Promotion Price Customer Service Processes & policies Personnel / HR Treatment/ Information Channels Image Positioing Competitive Advantage

Loyalty

Segmentation

Institution

Competition

Product Development

Product

Place

Promotion

Price

Customer Service

Processes & policies

Personnel / HR

Treatment/ Information

Channels

Image

Positioing

Competitive Advantage

Customer Service: External client priorities Accessibility: Appropriate product terms (loan amounts & terms, interest rates) Policies are flexible & reflect client needs Speed of Service Rapid renewals Shorter wait time for disbursement Service at bank is prompt (lines, cashiers) 3. Customer Treatment: Staff is friendly, respectful, patient Staff pays personal attention to you Overall service is prompt 4. Preferential Programs: Reduced commissions &/or automatic renewals for good clients Completion of promise/meeting expectations (of benefits for long-term customers)

Accessibility:

Appropriate product terms (loan amounts & terms, interest rates)

Policies are flexible & reflect client needs

Speed of Service

Rapid renewals

Shorter wait time for disbursement

Service at bank is prompt (lines, cashiers)

3. Customer Treatment:

Staff is friendly, respectful, patient

Staff pays personal attention to you

Overall service is prompt

4. Preferential Programs:

Reduced commissions &/or automatic renewals for good clients

Completion of promise/meeting expectations (of benefits for long-term customers)

What is “Good Customer Service”? External Client Information and Access: Information: clear, complete, understandable service terms: transparent, straight-forward Flexible policies, feasible requirements & products that meets their needs Treatment: Staff: trustworthy & honest Staff: friendly, respectful, patient & accessible (personalized service) Staff: effective, helpful & able to answer questions Service: prompt & punctual Preferential programs Internal Client Information: Information: full disclosure; no surprises Clear, established communication channels Treatment: Respect: Authority (to make decisions & adjustments) Responsibility, but also support (tools, training, vehicles, budget etc.) Recognition carrots as well as sticks Qualitative as well as $ Reciprocity

External Client

Information and Access:

Information: clear, complete, understandable

service terms: transparent, straight-forward

Flexible policies, feasible requirements & products that meets their needs

Treatment:

Staff: trustworthy & honest

Staff: friendly, respectful, patient & accessible (personalized service)

Staff: effective, helpful & able to answer questions

Service:

prompt & punctual

Preferential programs

Internal Client

Information:

Information: full disclosure; no surprises

Clear, established communication channels

Treatment:

Respect:

Authority (to make decisions & adjustments)

Responsibility, but also support (tools, training, vehicles, budget etc.)

Recognition

carrots as well as sticks

Qualitative as well as $

Reciprocity

Customer Service Strategy: Key Elements Key Elements of Customer Service Strategy: Analysis of research results – institution, market & industry Areas requiring change Prioritized recommendation for changes These elements include: Delivery Channels : consistency across touch points Policies & procedures : changes needed to support goals Operations : processes and procedures to modify Human Resources : organizational changes required Technology : systems and data needed Communications: supporting materials and information to communicate internally & externally

Key Elements of Customer Service Strategy:

Analysis of research results – institution, market & industry

Areas requiring change

Prioritized recommendation for changes

These elements include:

Delivery Channels : consistency across touch points

Policies & procedures : changes needed to support goals

Operations : processes and procedures to modify

Human Resources : organizational changes required

Technology : systems and data needed

Communications: supporting materials and information to communicate internally & externally

Strategy Framework Market Research Leadership Customer service vision Internal Clients Job satisfaction Environment of innovation & feedback Good “fit” between skills & responsibilities Empowerment Feed back Client-centric culture Identify institutional capacity / competency to meet client needs Map customer experience (touchpoints, moments of truth etc) Service Benchmarks Understand client profile & preferences Loyalty, preference, retention & referrals Policies & processes Ooperations Technology Human Resources Communication – Internal & external Products Plan de Satisfacción del Cliente Key strategy components: Problem solving Complaint management Post sale support Training Communication channels

Leadership

Customer service vision

Internal Clients

Job satisfaction

Environment of innovation & feedback

Good “fit” between skills & responsibilities

Empowerment

Key strategy components:

Problem solving

Complaint management

Post sale support

Training

Communication channels

Framework: Alignment Successful Strategies Competitive advantages of the institution Profile & preferences of target market

Example: Delivery Channels Current Situation Speed / Ease of Service Disbursement wait time too long Service hours prevents punctual client payments Branch locations are not easily located branches do not designate “client service area” nor steps of process Treatment Lack of respect shown by cashiers / unfriendly Calls put on hold or deferred Possible Solutions Training Training to review customer service philosophy & responses Create service model: brand promise Branches need to be more effective at service delivery More accessible branches More information outside & inside branch Explore new channels Hiring & Performance Create incentives for loan officers to speed up service (such as same-day renewals/approvals) Incorporate customer service functions into job requirements (attitude, profile, etc) Incentives / rewards for good service (e.g. Incorporate treatment ‘score’ into cashier performance review) Monitor customer treatment across branches

Current Situation

Speed / Ease of Service

Disbursement wait time too long

Service hours prevents punctual client payments

Branch locations are not easily located

branches do not designate “client service area” nor steps of process

Treatment

Lack of respect shown by cashiers / unfriendly

Calls put on hold or deferred

Possible Solutions

Training

Training to review customer service philosophy & responses

Create service model: brand promise

Branches need to be more effective at service delivery

More accessible branches

More information outside & inside branch

Explore new channels

Hiring & Performance

Create incentives for loan officers to speed up service (such as same-day renewals/approvals)

Incorporate customer service functions into job requirements (attitude, profile, etc)

Incentives / rewards for good service (e.g. Incorporate treatment ‘score’ into cashier performance review)

Monitor customer treatment across branches

Customer Service Manual Customer Feedback Loop Customer Experience Evaluation (analysis of “end-to-end” customer experience) Customer Handling Procedures: Routing; escalation etc based on nature of inquiry; type of client etc. Customer Knowledge Management Plan information collected on clients Reports generated etc Loyalty Programs: recognition, rewards

Customer Feedback Loop

Customer Experience Evaluation (analysis of “end-to-end” customer experience)

Customer Handling Procedures:

Routing; escalation etc

based on nature of inquiry; type of client etc.

Customer Knowledge Management Plan

information collected on clients

Reports generated etc

Loyalty Programs: recognition, rewards

Customer Service Strategy: Road Map for Implementation Next Steps for Implementation: Prioritize Maximize value for the client Determine feasibility and strategic importance Conduct a cost-benefit analysis Define Areas involved Staff Functional areas Outline responsibilities & timeline Establish Road Map and key deliverables Estimate Available Budget

Next Steps for Implementation:

Prioritize

Maximize value for the client

Determine feasibility and strategic importance

Conduct a cost-benefit analysis

Define Areas involved

Staff

Functional areas

Outline responsibilities & timeline

Establish Road Map and key deliverables

Estimate Available Budget

Customer Service Strategy: Prioritization Priority for the client based on perceived value Cost & Complexity of Implementation Phase I : 2003 Phase II: 2004 Phase III: > 2004 PHASE III HIGH MED PHASE I PHASE II LOW HIGH MED LOW

Desired Outcomes Develop a customer-focused orientation throughout the organization Increase satisfaction among existing customers Improve loyalty of customers, especially most “attractive” Improve overall service performance and competency across regions Demonstrate consistency across all service channels Enhance image and competitive standing in the market Attract and convert new customers via good service

Develop a customer-focused orientation throughout the organization

Increase satisfaction among existing customers

Improve loyalty of customers, especially most “attractive”

Improve overall service performance and competency across regions

Demonstrate consistency across all service channels

Enhance image and competitive standing in the market

Attract and convert new customers via good service