A company can no longer rely on the strength of its products alone to ensure success. Today, the emphasis is on customer care. By Robert Evans.
In launching his Citizen's Charter, the Prime Minister has moved consumer rights firmly up the political agenda. Customer care is set to become the corporate theme of the '90s. At one time companies could rely on the strength of their product alone to ensure success. Today they must be much more customer-oriented in order to succeed.
British Gas, by the very nature of its business, is thought to have an advantage when it comes to winning the hearts and minds of customers. It has high street showrooms and many of its employees visit customers' homes in the course of their work. This is a two-edged sword. In customer care, such avenues of communication soon lose their advantage if the company concerned fails to deliver high quality services.
The renewed political interest in consumer issues will ensure that customer expectations continue to rise. How to meet demands of a sophisticated public for higher standards of service and plenty of choice at reasonable prices is a major challenge facing managements. In recessionary times, when new business is more difficult to find, customer care is more important than ever. Managers who neglect this aspect of their business in boom years stand to lose customers to competitors when times are hard.
So what is British Gas doing to bring itself closer to its customers?
The approach is essentially that of a big international company "thinking locally" when it comes to customer relations. It has made - and acted upon - a series of commitments to its customers.
Customer care has always been a priority, but since privatisation British Gas has renewed its effort to improve further its standard of service. This reflects both the need to match the rising expectations of customers - many of whom are also shareholders - and the recognition that the organisation's future success depends on providing customers with high quality service. In line with this approach, it has changed its culture to be more open with those who take an interest in its activities. In customer care, this has led to the provision of more explicit information about the services on offer.
In developing a service culture throughout the company, the organisation took a somewhat novel approach two years ago and sent a questionnaire to all its 17 million domestic customers asking them what they thought of the service.
Launched as part of the "Banishing Gripes" corporate communications and advertising campaign, this survey was the largest exercise of its kind ever to be undertaken by a commercial company: 1.25 million replies were received and the information provided helped management pinpoint the improvements needed to make services first class in every aspect. The survey led directly to the publication of the Commitment to our Customers' best practice guide. As a result, customers now know exactly what sort of service to expect and employees know exactly the standard of service they are expected to deliver.
This was followed by a special commitment to older or disabled customers and the introduction of "Commitment to Energy Efficiency" to help customers make the best use of gas. This also involves helping those with payment problems. At a time when many household budgets are under strain, British Gas has reduced disconnection levels to the lowest rates since records began.
Commitment booklets and advice leaflets are written in clear, simple English to put the message across. Advice is also available through showrooms and, where appropriate, staff have been given training in dealing with customers.
These initiatives have been introduced alongside a major company reorganisation. The whole regional structure is now closely focused on putting the customer first. District general managers have been appointed to take responsibility for all customer operations in their area and customer relations managers have a vital role to play.
It is important to continue the process, begun with the "Banishing Gripes" survey, of listening and taking action on what customers have to say. Customers will be given the opportunity to meet their district general managers in their local communities, so that they can continue to put forward views about the service.
Companies which make little attempt to develop communications with their existing customers are, I believe, making a big mistake. A company 's best potential customers are its existing customers. The householder who buys a gas central heating system may go on to buy a cooker or gas fire.
British Gas's policy of bringing the company closer to its customers is also built around the concept that business must be active in the community. Companies have a key role in helping the communities they serve to flourish and it is a short-sighted management that neglects this aspect of customer relations.
In the case of British Gas, this comes through its Social Policy programme which invests in community projects, charities, the arts, the environment, education and sport. It is also expressed through the sensitive way in which the company's operations are carried out, minimising their impact on the landscape, and through investment in technology to avoid disruption to the public.
Cynics will no doubt say that the development of closer links with customers has a price and that price is being paid in higher charges but the truth is quite the reverse. Since privatisation, gas tariffs have fallen by 14% in real terms and are among the cheapest in Europe.
Clearly the "think locally" approach is reaping rewards. Other managements may have a different strategy. Certainly no company can afford to neglect this aspect of its business. Investing in customer care is investing in the future.
Robert Evans is chairman of British Gas and a companion of the BIM.