Treating customers fairly and profitably
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The document summarizes a presentation on treating customers fairly and profitably in the conveyancing industry. It discusses challenges like balancing short-term profits with long-term innovation. It also examines factors like pricing power, barriers to change, and smarter competition through delighting customers to generate "good profits" and avoid "bad profits" that damage customer relationships. The presentation argues that businesses focused on putting customers first will be best positioned to adapt to an uncertain future shaped by disruptive competitors, changing customer expectations, and regulatory shifts.
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Treating customers fairly and profitably
- 1. LFS Conveyancing Conference Treating customers fairly and profitably 26 September 2013 Victor Olowe Director, Winzest Consulting
- 2. Nagging question Source: Winzest Consulting
- 3. What is treating customers fairly? Source: Winzest Consulting
- 4. Profitability League Table (Hypothetical Profit League Table – Conveyancing Firms) Source: Winzest Consulting
- 5. How businesses are wired? Source: Winzest Consulting
- 6. Treating Customers Fairly Matrix Source:Winzest Consulting A B C D Treating Customers Fairly Treating Customers Unfairly Profit Loss
- 7. Capacity to Experiment “I don’t think that you can invent on behalf of customers unless you’re willing to think long-term, because a lot of invention doesn’t work. If you’re going to invent, it means you’re going to experiment, and if you’re going to experiment, you’re going to fail, and if you’re going to fail, you have to think long term.” (Jeff Bezos, Amazon)
- 8. Pricing power • “The cost of being a conveyancer….. - Low fixed fees…” (Eddie Goldsmith, Conveyancing Association)
- 9. Pricing power “The single most important decision in evaluating a business is pricing power.” “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.” (Warren Buffet)
- 10. Another Roger Bannister? Source: Winzest Consulting
- 11. Treating Customers Fairly Matrix Source:Winzest Consulting A B C D Treating Customers Fairly Treating Customers Unfairly Profit Loss
- 12. Possible barriers to change Source: Winzest Consulting
- 13. Key Drivers of Change Source: Winzest Consulting
- 14. Smarter Competition Source: Winzest Consulting
- 15. Smarter Competition Source: Winzest Consulting
- 16. Smarter Competition Bad profits “…Though bad profits don’t show up on the books, they are easy to recognise. They are profits earned at the expense of customer relationships...” “…Bad profits strangle a company’s growth, primarily through the detractors they create…” Fred Reichheld, Rob Markey & Andreas Dullweber (Bain & Company)
- 17. Smarter Competition Bad profits “…Whenever a customer feels misled, mistreated, ignored, or coerced, profits from that customer are bad. Bad profits arise when companies shortchange customers by delivering a poor experience. When sales reps push overpriced or inappropriate products onto trusting customers, the reps are generating bad profits. When complex pricing schemes dupe customers into paying more than necessary to meet their needs, those pricing schemes contribute to bad profits…” Fred Reichheld, Rob Markey & Andreas Dullweber (Bain & Company)
- 18. Smarter Competition Good profits “…Good profits are dramatically different. If bad profits are earned at the expense of customers, good profits are earned with customers’ enthusiastic cooperation. A company earns good profits when it so delights its customers that they willingly come back for more – and not only that, they tell their friends and colleagues to do business with the company…” Fred Reichheld, Rob Markey & Andreas Dullweber (Bain & Company)
- 19. Smarter Competition Good profits “…Satisfied customers become, in effect, part of the company’s marketing department; they become promoters. The right goal for a company that wants to break the addiction to bad profits is to build relationships of such high quality that those relationships create promoters, generate good profits and fuel growth…” Fred Reichheld, Rob Markey & Andreas Dullweber (Bain & Company)
- 20. Smarter Competition Good profits “..A truly customer-focused company is one that lives up to the Golden Rule. Employees treat customers the way they would want to be treated if they were customers. That means avoiding bad profits entirely…” Fred Reichheld, Rob Markey & Andreas Dullweber (Bain & Company)
- 22. Smarter Consumers (How customers pay?) Source: Seth Godin
- 23. Smarter Consumers •Better Information •Collaborative Decision Making •Connection Economy •Better Information •Collaborative Decision Making •Connection Economy
- 24. Moving to the next level Treating customers fairly framework Source:Winzest Consulting
- 25. Summary Are we asking the right questions? Source: Winzest Consulting
- 27. Summary Although the next two to three years looks promising The long term future is still uncertain The challenge to find the right talent may continue Unless this sector is perceived to be more sustainable The new disruptive competitors are unknown But the regulators may look different The influence of channel partners may wane But customers’ expectations will surely change And the businesses that remain intelligently focused on customers will thrive
- 28. Further information Relevant papers at www.winzest.co.uk • Setting Profitable Fixed Fees through Value Based Pricing • Developing a Better Customer Service Culture
Editor's Notes
- Are they mutually exclusive? Regular market scanning has highlighted tensions between increasing profitability and treating customers fairly Received anecdotal feedback about the accuracy of disclosure of referral fees Had a conversation with a conveyancer that cared about customers but was discouraged about the current economic difficulties and feeling helpless Reviewed about 200 conveyancing websites last week through the eyes of the customers looking specifically at TT fees. A bout 52% of application websites correctly described TT fees as admin charge, about 10% did not charge a profit element and 38% incorrectly described disbursements instead of admin charge. The one thing that surprised me when I was looking those websites is the way we communicate about this sector. In general the messages to customers are – trust us and our pricing because there are many cowboy conveyancers with hidden charges and lower prices Whilst this may be true, it already begins to breed mistrust about this industry
- Right promise includes alignment to regulatory provisions, alignment to needs of target customers
- Unsure whether
- I have observed that businesses are told a lot about what they should do, yet the same issues with regard t o inadequacy of customer care still continue. Learnt a lot about studying social enterprises One of my frustation as regulator was getting to regulatory community to engage on issues Looking back businesses engage on the issues that impact these priorities Look at referral fees, this in one area where the quality and number of responses are relatively higher. This is because it impacts on revenue for some firms. A few months ago Micheal O’Leary made some remarks on a TV documentary in effect d isparaging about customer service. However last week at the AGM he is beggining to change his tune. But the reason for the change is the perceived impact on their customer service on future revenues.
- Every firm in this room is likely to be in one of those quadrants. Quadrant B is the desired destination or location for every firm here It may appears contradictory that firms are in Quadrant D Quadrant D is likely to be a temporary position because it is not sustainable There may be a number of reasons why firms may be in quadrant D but a major reason for conveyancing firms is pricing. Improving pricing for firms in quadrant d is a priority Firms in quadrant A present the greatest challenge because they are already profitable. Sailing closing to the regulatory wind is a phrase that may be applicable to them Firms in quadrant d does not allow such firms to develop a consistent customer experience because they lack the capacity to test new ideas or ways of working
- Always agreed with Eddie on this point but when I saw his recent slides I began to wonder whether t his is the boiling frog syndrome – we have all become accustomed to such fees.
- Now looking more closely at firms in quadrant A, the challenge is why they should move to quadrant B
- I watched with interest on Bloomberg TV as Apple stores released golbally the new iphone 5c and 5s and what struck me was that the majority of people did not need a new phone but the new phones fulfilled a deeper need – sense of belonging, association with new design etc. Looking at the conveyancing market we focus on the functional aspects but not enough focus on the emotional benefits of the services offered. This point really strck recently when I watched a documentary on channel 4 about how to get a council home. It was moving to note that people need the suport of councils for a diversity of reasons. In one episode a h ousing officer said that what they offer is not just a roof or bricks and mortar but they offered hope, a fresh start, a new building, a platform to rebuild their lifes, to make necessary transitions and I hd an aha moment because that is what conveyancers do. The certificate of title, registration and completion may tangible outputs of conveyancing but good conveyancers offers much more. People move for many reasons but usually revolve around the 3 d’s death, divorce and debt and this are life changing events and good conveyancing makes those transitions possible. This is where I think new entrants will expliot the deeper needs of customers. On a personal level, I am beginning to understanding at home. I could never understand when my wife and now my daugthers always stated that they needed a new outfit for an event. It is not rational to need more bag or shoes but I now realise that a new bag or a new dress actually mets a deeper need which the effective marketing people realise
- Creators of NPS – Net Promoter Score used by many major coorporations
- If someone had told me 12 months ago that I will be a fan of tech crunch and the people featured in such magazines. I am amazed at tech people are trying to do with technology in diverse I ndustry sectors and the opportunities for regulators are significant. The data mining tools now available means that regulators can monitor firms more quickly with greater degrees of assurance due to increased scope. The dominant regulatory model is effectively self certification and it is underpinned by the regulatory community providing accurate and truthful information. But this assumes that the regulatory community actually know the correct answer. Last year the SRA survey found that many firms considered that their risk assessment was okay but the validity of that assessment was not tested. We inspect firms but usually only minor issues are dientified and major issues
- When I was pondering on how best to convince firms in quadrant to shift from A to B, I heard seth godin state their firms that are treating customers firm are effectively missing out of r eferrals and trust for repeat business. Repeat business is not just buying more conveyancing services but repeat business from you company’s portfolio of products. This is why I think that firms providing only conveyancing would miss out on other opportunities to build deeper relationships with customers. Blackberry’s situation is a reminder that solving many problems for customers is a more sustainable way.
- The thing I find fascinating about modern technology is the way its changes us as customers. At break time, we all catch with new digital content since the last time we checked 30 mins ago. People are choosing to use Air BnB rather than hotels because of the experience. We prefer to rely on collaborative models.
- Enhance customer understanding – use myhomemove recent results Talk about customer survey – actionable insights