Austrian, surprise me!

I am writing this post for three reasons:

  1. To find forgiveness for a small act of revenge in a tweet
  2. To correct my behavior from criticism to constructive dialog.
  3. To help an airline change.

 The story about my revengeful tweet

Rainy September, late evening. I am surrounded by a group of strangers having late dinner at a hotel in the center of Vienna. All of us are here for the same reason – we missed our late flights and the airline company assured the dinner and accommodation. A young French couple is sitting at the opposite table. I can hear the woman talking to the waiter: “You want to say that we have the business class and now we have to pay extra for some cheese on my pasta?” The clerk’s answer is unemotionally neat and clear: “Yes exactly”. Cold and factual service is what I really got enough today. I’m taking my smartphone and tweeting the following.

It all happened when I was flying from Belgrade to Bucharest over Vienna. To make more productive the next day, I decided to take a less comfortable evening flight over Vienna instead of the direct one in the morning.

My flight from Belgrade was getting late in departure, and I missed the next plane. This was not the worst thing one could have experienced, but somehow I really felt that after that no one in the service chain really cared whether I would miss this plane or not. Moreover, I believe that I could have caught it if it was different. Here is the story about my perspective and suggestions on how Austrian airlines could have done it differently. I use the “#idontcare” (I don’t care) tag from my tweet as a synonym for the missing service experience.

 The First #idontcare at the airplane

Just after we landed to Vienna, while some of the passengers were still at their seats, I told the flight attendant that my boarding for the next flight ends in 20 minutes. She responded by telling me just to go through the regular procedure. Without any additional information – will I make it or not. At the time, I was sure by the tone of her voice and her expression, that she meant: “You should make it by passing the normal procedure”. It turned out lately that this was my first #idontcare that evening.

 If you won’t, competition will set standards for expectations

Second #idontcare I experienced was in front of the craft. While we were waiting for the cabin luggage, passengers to Frankfurt were invited into a van waiting aside. Some of us with tight schedules also asked the attendant about our options but we were told just to proceed to the bus and gates. The Frankfurt van only increased my expectation-perception gap. “This was the way I should have been treated” was the only thought that could have come to my mind.

Glass of wine Austrian flight

 Security check is part of your service too – sorry to tell you that.

Third #idontcare was at the security check. My time was running out when I reached it. I saw that there were perhaps just a few minutes to make it to the gate some 30 meters away. From my position in the queue I told the security person that my boarding is about to close. She just shook her shoulders and said that I had to wait. Some nice granny was the first to show some compassion and let me in front of her and her husband. However, the security check took it’s time with the second turn to pass my shoes through the x ray. I missed the gate closing for just about 4 minutes.

An airline might argue that security check is an independent organization not concerning them. I do not take that! Airport security does not take part of bureaucratic government agencies any more. I would not agree with an argument such as “This is under airport authority, and we are just an airline”. It is up to the airline to develop a business model that assures certain service level (with delivering on schedule as its minimum), by that I mean including the whole ecosystem – security, airports, cattering, check-in process, travel agencies, on-line booking services, and even (to go to extremes) air traffic control authorities if needed.

It is also about the way we associate brand with service: Austrian airline – Vienna – Vienna airport. Now tell me who do you associate the security service with. Got it?

Some airports do not require additional security checks when switching flights. Austrian airlines (ups sorry Vienna airport) does. Competition sets expectations (once again).

 The fourth #idoncare: at the service desk

When I reached the gate, the person standing there, just concluded that “The boarding is completed. You have to go to the service desk”, pointing to the nearby booth with 5 or 6 working places and 2 or 3 persons servicing clients.

Although short – maybe 6 or 7 people, the queue at the both was very slow. After 10 minutes, I started feeling uncomfortable: “What if there is a next plane departing in minutes? What if I’m missing it by standing in this queue, what if…”. The problem was I could not check any status as there were no displays in my sight, and I was afraid to leave the queue that was becoming seriously long behind me. A young woman cried because she missed the same flight, a group of people in front of me discussed about what they should do. After a long waiting, the group of people in front of me was serviced in seconds as they obviously stood in a wrong queue. Overall, at the service desk the “#idontcares” reflected in significant lack of information as well as indifference about the impact of the process on the passengers. While standing there, you feel blind, dump and not really serviced. Next time in such situation, I’d like to understand what is happening, how long will it take and what are my options.

Customer care around empathy and caring

The general #idontcare during my experience with the missed flight is the overall absence of empathy in all interactions in which I was involved with Austrian airlines representatives. By that I meant the Vienna airport and security employees also – sorry again. I do not blame Austrian for not having designed the customer facing processes around empathy. However, I do mind the ease in which I was left to spend the night in Vienna, without anyone even pretending to try to help or at least care.

 Austrian can you do that?

Finally by writing this, I am answering to the Austrian airlines tweet, I’m  investing time and energy to “co-source” the design of Austrian’s “#idocare” processes. To be honest, I’m not sure that it will make any difference. I suspect that this correspondence will remain just another check on a to do list of some “social media specialist” who did his or her job just by finally showing some compassion and care thus avoiding bigger harm to the image of the brand.

There are just a few companies which have the culture and the business model integrated responsive and actionable in the way that a client complaint would have made any substantial internal changes, and I’m really not sure that Austrian Airlines with its service ecosystem (the craft crew, the security check, the service desk, the lady at the gate, the airport stuff,…) is among those.

 Austrian Airlines, surprise me!

“Tasting” the McCafe’ business model

McDonalds announcement to introduce McCafe’ line of business brought many controversies during past year or so. One of the comments from a journalist was about hard-to-immagine truck diver who jumped in McDonalds for a fast and cheap hamburger lunch, asking a fancy cup of latte macchiato. Is this a problem? I went to the Zagreb McCafe and “had a taste” in person of the newly introduced McDonalds business model. Read about it in the furhter text and let me know what do you think.

A coffee shop in the hamburger kingdom

A year ago I read a lot about controversies about McDonalds’ decision to introduce coffee shops within their existing restaurants. At the time one of the many skeptics wrote that he couldn’t imagine a truck driver entering a McDonalds restaurant, taking a cheap lunch and ordering a fancy cup of coffee. There where many opinions that McDonald’s intrusion into Starbuck’s playground will turn into failure. There where many believing the opposite though.

Mc’Donalds decided for two approaches to introducing coffee line in its existing business:

1. In US the coffee line of business is integrated into the existing front counters

2. Separate counter and cafe’ – style furnishing within existing restaurants, started in Australia in 1993. This model started to extend to Europe in 2009.

In Zagreb the first McCafe’ was introduced in autumn 2009. I was really curious about what will be the success. These days I had the opportunity to “taste” the business model, through customer goggles. Here is my experience and annotations.

Me and my laptop walked through the McCafe’ door due to a reason different than usual choice of a cafe’. After the temporary suspension of the anti-smoking law in Croatia, McCafe’ remained one of the very rare places in Zagreb where one can enjoy a coffee without having to take the role of a secondary smoker.

Nice cakes, but where is the WiFi?

From customer perspective it was a decent experience (as I didn’t poor the coffee on my keyboard this time, my laptop will not be asked about his opinion :-)). The McCafe’ (at Zagreb at least) is smoothly integrated into the standard fast food area. As my idea was “work-and-coffee“, too many children running around after 3 PM where disturbing eventual phone calls. As some customers claimed to the Business Week’s reporter (http://www.businessweek.com/magazine/content/09_40/b4149070703260.htm?chan=globalbiz_europe+index+page_management+%2Bamp%3B+learning) in her article about McCafe’ penetration in Europe, the smell of French frites and hamburgers does spoil the coffee shop atmosphere. Indeed. During my stay at McCafe’ I really missed a WiFi link and a coffee sized less than a mid cup. What about a “small macchiato”?

When trying to have a look from the back door, my estimation is that the business model is placed on healthy basis. Here is why.

My only concern is that the McCafe’ bar seems often too empty, but the rest of business case seems to be built around productivity and up sell.

First, it is pretty hard to resist some of excellent, yet pretty expensive cakes, when you jump in for a cup of coffee.

Additional argument on up selling that keeps the business running, are many parents that approach the McCafe’ counter after having ordered food for their children at the fast food counters.

Productivity + up-sell is the name of the game

From productivity perspective, McCafe’ shares existing resources (such as cleaning personnel) with the rest of the restaurant and employs fewer personnel than an average coffee shop. Actually only one lady is taking care of the whole McCafe’ experience, including coffee making, cakes decorations, billing and the inevitable “enjoy” phrase.

Comparing with a traditional coffee shop that engages a “running waiter”, in McCafe’ the productivity is additionally enhanced by the fact that customers serve them selves at the bar and clean their desks afterwards by bringing their trays back to the McCafe’ counter. It is worth mentioning that the price of a small cup of coffee is among the highest in Zagreb area (10Kn = 1,3€, cca 2$). More expensive coffee can be found at a few very fancy places and 4+ star hotels.

Cakes to go

In terms of cross selling and reusing existing resources, McCafe’ has thought about the possibility to sell cakes “to go”, extending their presence to home parties and celebrations. McDonald’s has extended its business model to coffee line of business, without actually having to innovate, or spend too much. They got all of it already – food “to go”, restaurant management, location, experience management, standards,…

The Business Week’s article cited above, brought an estimation of Jeffrey Young, managing director of London management consultancy Allegra Strategies that the investment for a new stand alone Starbucks in Europe is at least tripple the amount of that for a McCafe’ within the existing McDonald’s facitilites. I’d add that it is the same ratio, if not higher, when talking about the daily business expences (personnel, energy and the like).

All in all it seems that there was no place for skeptics when talking about McDonalds introduction of McCafe’. The new line of business is all about up sell and reusing the existing resources. This was a simple business idea, and simply hard to miss. And here is a simple thought for the end: If these are results of a marriage between hamburgers and cappuccinos, think about the consequences of the merge between mobile (T-Mobile) and land line (T-Com) telecom operators.

My article on IVR systems – PART 1 (translated to English), Banka magazine, May 2002

This is the English translation of an article published in Banka magazine in 2002. The article is about Interactive Voice Response devices (IVR). IVR systems find their “best fit” within call center environments where they represent the “finest compromise” of a CRM strategy. This is the first part of the article, addressing pretty universal topics of CRM, IVR and call centers, and therefore still actual, despite its origin from 2002.

IVR – technology for a great compromise – PART 1

If you will use this text for publishing or academic pursposes, be so kind to cite the author and source: Alen Gojceta, Banka, 05/2002. Thank you!

CRM – the concept of technologycal compromises

One of the basic postulates of any CRM (Customer Relationship Management) strategy is to make customer’s interaction with the organization easy and accessible. Taking an ideal situation from the financial industry as an example, it would mean that each of us had his or her personal banking clerk on full disposition. In accordance with our wishes, let’s call him Super personal banker. He would appear at our office or apartment shortly after we called him. In a pleasant atmosphere, he would carry out the necessary transactions, advise on investing our money, and help us select the optimal insurance policy or recommend the best plan to close our loan. Of course, in this ideal case, the client would not need to pay considerable financial amount for such a great service.

It is obvious that the ideal case for a bank is not the same as the ideal case for its clients. That’s why the CRM strategy is usually characterized by multiple win-win challenges, where such wins-wins are necessarily converted into (winning) compromises-compromises.

Managing customer relationships is basically oriented to managing such compromises. By balancing between the cost of advanced customer service and provided total added value to the client, healthy development of a successful CRM strategy is assured.

IVR – the simplest service making the greatest savings, 24×7

The existence of a call center as supporting tool for an advanced CRM strategy also represents a compromise of its own. Whatever our position on cost is, a call center is a pretty expensive tool for any service provider, looking on a short or long term. The reason is simple – the price of labor makes up to 70% of the total call center cost. Exactly for this reason, there are machines that substitute different functions in the Call Center. These machines are called Interactive Voice Response (IVR) devices.

When talking about telephone communication, IVR devices represent one of the most common compromises of advanced customer relationship management. IVR is, in its principle, a computer that performs certain activities automatically upon caller’s requests, given by phone.

IVR functions can be divided into two basic groups.

First, filtering phone calls based on who the caller is and what is the purpose of the call, and finally attaching such attributes to the call. Based on those, calls are further processed within the call center routing algorithms. Processing herein means operations such as identification of caller’s segment, call routing to a particular agent or group of agents, triggering certain applications to enable agents solving caller’s requests. All of it based on the attributes that IVR has attached to the call.

Second, automatically solving telephone inquiries, usually via dial tone or voice recognition. IVR can read the data, both dynamically from a database, or just play predefined recordings from static voice boxes. Responses to inquiries can be using voice, by fax, or via e-mail. Usually the answers are numbers synthesized by a computer, from pre-recorded sequences. There are several providers that offer IVR solutions with messages in Croatian language. Known examples of IVR solutions in Croatia are widely adopted various forms of automated telephone banking in different banks, popular Infozap and devices for activation of prepaid services for GSM operators.

IVR applications are mostly being easily made and changed by special tools. There are cases when those can not be changed. Such machines are usually intended for specific areas of application as complete solutions.

IVR role in call center environment

In the Computers and business insert of the last issue of Banka magazine (03/2002), there was a Gartner’s estimation that IVR systems within call centers will be one of rare segments of the IT market that will record higher growth rates than average. This is not unusual. In the EMEA (Europe, Middle East and Africa) region there is an average of 5 new call centers a day. Different analysts predict growth of the number of call center agents in Western Europe between 400 and 500% for the period 1999 – 2004. Although IVR systems can function as standalone solutions, their real value is shown when implemented within call center ecosystems.

The growth of the total number of employees in call centers and growing number of transactions and CRM processes that rely on telephone communication causes growth of the related work force cost. IVR solutions are among the most effective vehicles to reduce this cost. Of course, such solutions are driven by compromises introduced earlier in this text. IVR lets service providers to provision simple information to its users in an inexpensive and efficient manner, 24 hours a day and seven days a week. Customers have the ability to access frequently requested services and information, in a relatively simple manner, with guaranteed quality and availability. The compromise is reflected here in the lack of human contact and unpopular scrolling through predefined dial tone menus.

There are two factors where IVRs significantly reduce labor costs in Call centers: reduction of the needed number of agents due to the calls managed by the IVR, and reduced turnover of agents who are released from boring, repetitive and uncreative activities.

Statistics say that, usage of an IVR system reduces the average call length for 18%, which cause reduction in related labor costs. In today’s call centers around 12% of calls are resolved within IVR systems without any interaction with “live” agents. In some industries, such as financial services, entertainment and tourism, this share ranges even between 16 and 18%. Moreover 35% of total calls, before being routed to agents, are received to the IVR system.

Health Risk Management – an example of a successful IVR implementation

This case study has been extracted from a Lucent white paper. The source document is available today (January 2010) at: www.goldsys.com/…/21-Gold%20Systems%20Health%20Risk%20Case%20Study.pdf

Health Risk Management Inc. (HRM) is a company from Minneapolis, United States, which since 1977 provides health care services and health risk management. As a part of the U.S. health care system, the HRM takes care of the medical insurance coverage for health treatment expenses. They assess health risk and serve as an intermediary between health institutions and health insured.

Like other companies in the industry, HRM already owned an IVR system which provided restricted functions to callers, such as checking the status of their requests. In order to reduce traffic and offloading call center representatives, HRM decided to introduce two IVR applications: the eligibility of patients for medical services and health insurance benefits. In addition, the existing application, that checked statuses of requests for refund of medical services, was enhanced.

While the old application was limited only to communicating the status of a request, the new one has added information about reasons of delays. In addition, the insured was able to get the information about the amount of health services covered by the insurer and the remaining of the amount to be paid. As part of advanced customer relationship, support for Spanish language was introduced. Some HRM customers had up 15% of the Spanish-speaking insured. The new application eased their access to information through their native language.

Calls to check eligibility of a policy holder for a particular health service where performed by physicians and medical institutions. IVR application used to return the information about the status of an insured, services covered by health policy and its expiration.

When integrating applications for medical benefits, the major challenge was how to communicate complex, accurate and understandable information from a wide selection of options in a reasonably short time. HRM was able to overcome this obstacle by achieving the most important compromise of IVR systems – releasing people of simple tasks, thus making a machine provision easy and fast automatic self-service, enforcing customer satisfaction.

HRM’s success was complete. IVR system was very well accepted. It used to completely resolve 58% of 50,000 calls dialed during the first three months. More importantly, the surveys among users showed no objections to such self service “information supplying system”.

TO BE CONTINUED IN PART 2… My next post will be the last two paragraphs of this article: “The future of IVR” and “Voice portals”. My plan is to post it on January 11 2010.