So of course I'm trying to get. I will actually follow Alfred's
policy of asking the guests to introduce herself to a large
extent, except to say it's great honour to welcome Chief
Marketing Officer of Zurich, Connie Culture, who has an
extraordinary coincidence with me in that I think you nearly
became a teacher and nearly became a journalist.
I I also trained as a teacher, nearly became a journalist and
ended up in advertising. So we've got that.
We've got that in common, by the way, with your own introduction.
Delighted to have you here. I'm delighted to be here.
Thank you very much for the invitation and the introduction.
Yeah, it is. It is true.
I started out my career as a teacher but soon moved into
marketing. I've been working in marketing
for almost 40 years, many of the years in the Lego Group in
Denmark and in the UK, all in global roles.
And then after that in in Zurich, one of the biggest
insurance companies in the world.
And I'm really a customer person at heart.
I care a lot about developing things for and delivering to
customers. That's what drives me, that's
what gets me up in the morning and that's what I'm excited
about. This is fantastic.
So one of your great focuses, I think you're at Lego in multiple
roles, weren't you? You?
It wasn't only in the marketing role, you were also in film
making. Almost an extraordinary plethora
of different roles within what is a fantastic marketing
organization obviously, but so much more than that as well.
Tell us a bit about that and particularly the film making.
I'm intrigued by that. Yeah, I was very, very lucky to
be part of many upstarts at Lego.
The the good thing about the Lego culture is all about
innovation, trying new things and, and, and seeing how far you
can stretch the brands and the and the products.
So I was part of developing TV shows, I was part of developing
computer games for kids as an initiative, just dabbling in the
water, finding out how Lego could be relevant in that space.
So but I was also doing innovation and other things and
even even running HR at a certain point in time.
Yeah. So I was just trying many
different things. So I mean, how useful,
presumably having covered the waterfront.
I was an account man briefly in advertising before I became a
copywriter, and I think we see less and less of this in an age
of specialisation. But having done more than one
role within an organization I think helps in multiple ways.
It helps in terms of your own perspective.
It also helps in terms of your relationships with other people,
because you've been their side of the fence as well, I suppose.
Did you find the same thing? Absolutely.
I, I really enjoyed doing different things within, within
the group and connecting to different parts of customer
needs or kids needs, but also understanding the organization
on a broader scale. I often had roles, which was
kind of breaking new ground. So trying something we hadn't
done before. So the first computer game, as I
said, or doing Lego licensing or, or, or doing books and
things like that for kids. So it's all breaking new ground
and seeing how far we could stretch the brand, but then at
the same time you get a deeper and deeper knowledge about
children, a deeper and deeper knowledge about your colleagues
in these spaces and the industries that are catering for
your core customers. And interestingly, I suppose you
also took is, is Lego privately owned or is it a public company?
It's privately. Owned.
Privately owned, yeah. Which explains partly I suppose
the the focus on the customer because one of my one of my
complaints is that increasingly in companies which are
shareholder focused, the customer effectively takes a
back seat. And what I notice happening is
1A decline in innovation and and brand investment generally to
meet short term objectives. But the other thing I tend to
see is effectively where operational efficiencies are
introduced at the customer's own expense.
So it's, you know, it's a great story to the stock market that
you've managed to transition 40% of your customers from human
checkouts to the supermarket to self checkout.
It's a wonderful story to the stock market because it's a
plausible story with a cost saving narrative, but the long
term costs of that are that your customer is paying a price for
your own internal efficiencies, which may not be that great a
business move. So that's fascinating.
So it's still effectively family owned, I guess.
Is it? Yes, it is.
It's the fourth generation, I believe that's running it.
And it of course gives a lot of continuity.
It gives a lot of belief in the brand and what the brand stands
for. It gets a lot of shared
knowledge about what's right for the brand and what's not right
for the brand. And that, that is kind of, yes,
a fantastic asset to have. And I guess it still has an
underlying mission or purpose without getting into the whole
brand purpose question, which can get a bit tedious, but
ultimately the educational purpose still underpins
everything I guess. Yeah, it's a combination of
education and entertainment, I would say, because if you go
purely didactic, you can easily use the kids, lose the kids.
But it's it is about being relevant for the kids of today
and delivering something to them that they find exciting.
You know, some parents would like to say, yeah, when I grew
up, we only had red bricks and yellow bricks and we could only
build very simple things. But if if Lego had followed that
direction, it would have been gone out of business.
So it's really about understanding what is it the
kids of today? What do they want?
What do they need? What makes them excited about
something? And we we had a period where we
were very much seen as a toy company for six year olds.
And if you were nine, you wouldn't be seen near Lego.
And that has flipped. That has totally changed.
Yeah, because children are unbelievably ageist, aren't
they? If you if you buy a Peppa Pig
toy for someone who is one year over the the core target
audience for Peppa Pig, it's perceived as a massive insult.
And so children have this weird thing of if you're not careful,
of completely rejecting the things they enjoyed two years
before. And so you also then of course,
did something extraordinary, which I have to admit, if you'd
proposed it to me, I would have said you were mad, which was the
adult market as well, which was, I think, one of the bravest.
And you know, I'll have to confess if you'd gone to me as a
marketing person, I like to think of myself as fairly
adventurous and happy to entertain, you know, slightly
outlandish ideas. But the pursuit of the adult
market with very high-priced, fantastically sophisticated
versions of Lego, that was an extraordinary success in a way,
wasn't it? Yes, but it was also and now it
sounds like something we just switched on overnight or we made
a decision let's be for adults and then we should.
But it wasn't like that. There was a lot of resistance
within the company. We're for kids, we're really not
for adults and and how would they see us in the future if we
become two adults and not for the kids etcetera.
So it's really only when the community numbers became so
convincing and the share of the sales was growing and growing
and growing that we embraced that new business opportunity.
And now it's embraced to the full with also the the the line
of the flowers, which is maybe more aimed at a different target
group. You know that's.
Astounding. I saw that.
Is it Botanicals, it's called, is it?
Yes, I saw that. They're things of extraordinary
beauty. I mean, that again was a
brilliant, brilliant lateral move.
And again, it's who is the adult target audience because I have
to confess, it doesn't include me.
It might well include my brother, I suspect.
Or if if you're allowed to anyway, who, who, what happened
You you tentatively started producing, I suppose brand
partnerships was was a great foundation of it.
Yeah, a lot of the, the Star Wars fans, for example, that
bought Lego as kids, they weren't ready to give up Star
Wars when they became adults. So they kept on buying, for
example. And, and other developments were
that we we did something called Lego Ideas where we allowed the
community to come up with ideas of what they would like to buy
in a Lego box, which was a big revolution.
So they came up with, you know, that they wanted to see The
Simpsons in a Lego set. And so we didn't have to produce
a whole line. We could just produce 1 set.
And there were a lot of these fan communities that had
overlaps with the Lego community and some other kind of property,
IP property. And by doing that more and more,
it became visible that this target group had real buying
power and real interest in other types of models.
And there were other ways of servicing them, not having 10
SKUs, but, but having different skews that were priced higher,
more complicated. And in a, in an interesting
effect, we, we, we saw that these fans of Lego, which are
the really high spenders, they will spend thousands of pounds
on, on Lego. They were helping, pulling up
other people because they they were kind of the community
spreading everything on social media, in their networks, in
their communities and other people and kids will see their
amazing models of what they could do and that would inspire
them, which then took Lego away from being a play toy into into
a creative medium. So that also presumably helped
with the whole problem of children at the age of 7 or 8
rejecting it because they saw it as.
So it was almost the case of going a little bit too far in
order to achieve the middle. I always think it's very
interesting that the, the Indian restaurant Deshume, in order to
get people to come in at lunchtime open for breakfast,
which is it's, it's, it's rather like that very clever form of
overshoot. I also remember, by the way, I
had one of the, one of the most interesting conversations I had
a few years ago was with Lego discussing the question of
sustainability and recycling. And I remember saying to the
book to be absolutely candid, if there is one brand I've ever had
to talk to which doesn't have a problem with being reused, I
can't envisage ever throwing away Lego.
If I owned Lego, I might pass it on to somebody else, I might
keep it, I might put it in the cupboard.
But it is almost, almost infinitely reusable.
Obviously, I think the bricks lose a certain degree of,
they'll lose a certain degree of cohesion after, you know, 100
uses or something. But I remember saying that of
all the, of all the toys, of all the things you buy for children,
which cannot be accused of being environmentally unsustainable,
Lego came with the top. And I, I think I did the
slightly irresponsible thing. My colleagues would probably
have shot me for it, of saying you really don't have much to
worry about here. I mean, there are you you can
make it from recycled plastic, you can recycle it if people
want to, and so on and so forth. Yeah, an element, some of the
softer elements are today done by reusable materials.
So the problem is the clutch power, you know, in the bricks
that they, the clutch power is not as strong.
So by doing something that's recyclable, not 100%, but it
will move the knowledge of the company more and more in that
direction. And then eventually maybe it
will be a much higher percentage that's reusable and.
Then one day, so you're marketing director of Lego,
you're presumably in Denmark at that point, and you get a call
from Zurich. I think if I'm right, the
headhunter first calls you and asks you if you're interested in
working for Zurich, which is, you know, it does seem like
quite a flip and at first you basically rejected it.
Is that right? That that is true.
I actually had left Lego at that point in time and I was working
in a different company with my, with my husband and I had a very
cosy life working with him on, on the clients and his business
and travelling the world together.
So, so we had kind of, I had thought no more corporate for
me. I'm I'm done with corporate.
I want a different three-year life more as an entrepreneur.
And then I did get a call from a headhunter about this position
at Zurich. And I just thought in insurance
companies, they're not really customer focus.
So this is not for me. And I pointed to some other
people that might be interesting for this Headhartter to talk
too. Maybe it was my own lack of
understanding about insurance and what is insurance is all
about, but that was how I perceived it seen from the
outside. And, and I thought, you know,
I've done all my career has been about how to do good things for
customers and, and really move the needle on that with some of
the leading companies in the world that, that I, I learned
together with. And, and just seeing me in a
whole different group was, was difficult for me.
But then I, I, some few months later, I got a call from
somebody in my network who had been working for Progressive for
many years in the US and, and he had been in the same network as
me. And he said, there is this job
at Zurich and it really has your name written all over it.
You, you should go talk to them. So Mario would like to talk to
you and see if this is something for you.
So actually being invited to talk to the CEO, of course, made
me super curious and interested. And I thought that's different.
So I went and had a meeting with the CEO and I heard his vision
for insurance and how to make insurance more customer friendly
than than what it is or was at that point in time.
And that was very inspiring. And then I was back the week
after we had another conversation and then I was
done. I was hired.
You're hooked. And in particular, it was
because it allowed you to focus as much on customer experience
and retention as a simple acquisition.
Is that right? Exactly.
That was part of it, but it was what really made me interested
was the transformation. It was trying to do something in
a business that's not known for this.
And I, I should caveat with that, that we have two lines of
business. We have commercial insurance
where we're one of the leading in the world and we're top, top
tuned to be customer focus. But in our retail business,
which was much closer to my world where we serve individual
customers, we were less advanced and and compared to Lego really
not on in the same league. So for me it was really the
challenge. What do you do in a company like
that that has the intent they want to do it, but it's an old
super tanker. It's been around for 150 years.
What can we do to make that change?
And that I was super interested in.
And then with his his vision and bagging back backing, I found it
very attractive. The interesting thing is, of
course, it's seen traditionally as a distress purchase or as a
grudge purchase. Yeah, I think 50% of people or
more don't claim in any given year.
So they're always inclined to increasingly doubt the value of
what they're spending. Yes.
And so part of the aim of this was to take the existing
customers, the existing retail customers of Zurich and get them
effectively to sort of reframe how they thought about
insurance. Is that right?
Yes, by actually also delivering differently to them.
So one of the challenges is exactly what you're saying that
50% of the customers we don't talk to through the year.
And we know from our data, the customers we engage with more
often, they have a claim or they have more products, they're much
more happy. So, So what part of the things
we were doing is reframing who we are.
So we're not just about protection, we're about
prevention, protection and service.
And that gives you more space to deliver value.
You know, so you will kind of do more things for your customers
in order for them to feel the relevance in a different way.
That's the the whole industry is moving in that direction, but
it's a a different framing. Of course, is a is a brilliant
conversation because it benefits both parties, doesn't it?
You don't want your customers to have an unfortunate accident you
know they don't want to have. Well, you know they don't want
to have an unfortunate accident. And as you said, it actually
reframes the whole conversation effectively away from what you
might call just being an emergency service towards some
sort of partnership. Yes, very, very interesting.
So we can play a different role. So for example, we in some
countries we send out hail alerts.
You know, in your area, there's predicted to be a hail alert.
Maybe you should park your car in the garage.
And it's not just to save money, but it actually is also for the
customer to be able to take action.
They don't want the hassle with their having to repair their
cars either. So in finding more of these
things or when you've had an accident, we have service desk,
we have concierge services, we book the car in for for service,
all all of these things around the situations that's normally
hassle situation for for a customer.
What, what can we do to make that easier?
How can we be playing a better role in that situation?
This is absolutely fascinating because in a sense it's also
gloriously meaningful precisely because it's so unexpected.
And you do have one advantage I think in insurance, which is
that generally customer expectations are quite low.
They assume. I mean, one of my assumptions
with insurance, which has pleasantly surprised me on a few
occasions, is you assume that the claim is going to be paid
with great reluctance. And when the people are actually
perfectly helpful and positive, it comes as a delightful
surprise. Which is I think, I think in a
sense you have an interesting relationship because people
until they claim at the very least start the relationship
from a position of just default mistrust.
They're not really, you know, they're always paranoid that
you're going to find a loophole or find some, you know,
objection or reason not to pay. And there is something with the
narrative that insurance industry hasn't been good at
telling. So like in every other industry,
there would be players that are the decent players that will do
the right thing. You pay maybe a bit more, but
you get better service, it's more reliable.
And I think we haven't been good at telling that story.
So for example, in the UK we have a claims ratio of paying
out 97% of claims, you know, but in the perception of a mind of a
customer, it's maybe 50%. So as an industry we also need
to get over ourselves and communicate these things more.
Yeah, maybe some some companies cannot put that number as high
as we can put it in our case, but we should do because we are
a premium provider. So we provide premium service
and people should know, which is something that becomes even more
important now that people are using.
AI search to find out which insurance they should use.
Those criteria suddenly become important.
And we can't be shy or or not wanting to brag about these
things. We need to state yes, but if you
take out an insurance with us, guess what?
In this case, we pay out this amount of of claims.
That should build trust. And I know trust is also an
important concept for you. You know, the more that we, if
we don't say anything, we are prone to be perceived as anybody
else. But if we say, but this is who
we are, this is what we do, and then, you know, be proud of when
we serve people well. So in a sense, the very act of
marketing is a form of differentiation because I my
guess is that half the people simply rely on, you know,
comparison websites for a large amount of their, you know, their
new customers. They compete purely on price.
And the problem when anything turns into a pure price
competition is in a sense, the company with the worst levels of
customer service or indeed the the lower level of claim
satisfaction is going to win. It's a race to the bottom.
Yes, exactly. And also, you know that it's
we're so technical that comparing one policy to the
other policy of what benefits and what payout rates is totally
difficult to do as an individual.
It takes hours. I did it myself when I moved to
Switzerland. Just trying to compare being in
the industry myself, I thought I should try to understand these
different providers. It's a nightmare, but it's not a
nightmare anymore because you just use chat TBT, which is much
more refined than a compared price comparison side.
And then you say these are my criteria, this is what I'm
looking for. For me, it's important that
there is a high claims payout or for me, it's important I get
service, I get access to personal advice.
And of course it's not the same for everyone, but it's our job
to understand what is important to what consumer group and how
do we then service them so they will be happy.
So one very interesting point about which I have to say this
is the first time I've heard it happen, but one of the great
advantages of AI based search is that it makes possible much more
nuanced decision making. Yes.
Because one of the things that's always concerned me, for
example, with the Cassie intermediary case, you know,
online travel agents, which is I've literally found myself so
fixated on price that in order to save £17.50, I book a flight
that leaves Gatwick at like 5:30 in the morning.
And then two days before I fly, I realize there's no way I'm
going to get my kids out of bed that early.
And we end up staying in a hotel overnight, which costs £200.
And you realize it's a completely false economy because
effectively what you've done is for ease of comparison, you've
fixated on the price, and all the other stuff that matters
gets effectively sidelined. Yeah.
And I think the future will be much more prompting on things
that are important to us. What are the factors in what
category, in what business that's important to you when you
travel or or when you you buy a new suitcase or whatever it is.
And then as brands, we have to be much more responsive to that
individual need and make sure that we can service that rather
than communicating blanket the same thing to every everyone and
and we will learn over time how people are prompting and what's
important to them. So intriguingly, one of the
things given your search criteria, one of your criteria
was you want to be able to talk to a human being, I think,
wasn't it? That, in other words, is the
customer service reasonably good because one of the cheapest ways
in which you can cut costs is effectively to force the entire
claims process online. The problem with that is that
every claim is subtly different in some shape or form, and
consequently the price the consumer has to pay for
navigating your own internal bureaucracy isn't really worth
paying. There are.
There are certain questions, I've always said where actually
this has to be, what it might be in three or four years time, a
very, very sophisticated automatic agent for some part of
the call. But there will always be an
element of complexity or the outlier that requires you to
talk to a human being and I. Think it should be choice,
though. I think the good brands will
give the choice to the customer because you will still find the
customer who wants to do it everything automatic at 1:00 in
the morning. Yeah, and they should be able to
do that. And then you find other people
with more complicated cases who, who would want to talk to a
human being or at this stage in the process, you want to talk to
somebody. And the, the winners in the
future will be the ones who understand that and give them
options. And if we go straight into this
efficiency run that you talked about before, it's just about
cutting cost out, cutting cost out, but it's also cutting
relationship out. It's also cutting any emotional
connection out with the brand. So, so that's not going to,
that's not going to win in the long run if you want to be at
least a meaningful brand to your customers.
I've always wondered, because I know you're absolutely and I
think quite rightly fixated on customer retention.
I've always wondered what very good call centre staff would
actually be paid if they could lay claim to the real value they
create in terms of retention. In that salespeople obviously
can lay claim, whether rightly or wrongly, to quite a lot of
value by claiming that this sale would not have happened in less
for me. Whether that's true or not, of
course, is a bit debatable. But they can nonetheless make
that claim that I brought in X million in revenue, which is
worth this if you're contributing to, to customer
retention, which I think can be just as decisive by the way,
with a good phone call as it can be an acquisition.
You, well, you could acquire that data, but it would take 3
or 4 years to actually prove your case.
And so we do. Have that we do.
Have that data. Not in all countries, but we do
have it in Spain, for example, where we where we have this
retention centre, which is part of the contact centre where
their job is, is to to be the voice and the dialogue, be
masters of that dialogue with the customers.
When, when we have renewals or when we haven't talked to
somebody for a long time, just reach out to them, hear how
they're doing, if there's anything we can help them with.
So we're, we're really exploring retention quite a lot.
And also it actually is meaningful to a customer service
centre to be both doing service calls, but also retention calls
or, or sales calls. So I, I think it's a very good
perspective of, of valuing that in the same way as you value the
sales people. Yes, I've always thought.
I've always thought also, of course the call centre is
incredibly valuable as a feedback mechanism because it's
there where you discover what people can't do online.
Yes. So, you know, in other In other
words, if you don't have some sort of human feedback mechanism
for people who've tried to self-serve and failed, you'll
never learn what you what it is you're doing wrong, because all
you'll have is a lot of people leaving you without knowing the
reason why. Yeah, exactly.
And I think we what, what we could be better at is really
using that data, which is also something that we, we are
working on. You know that it's, it's another
way of also valuing the people who work in service more by
making sure that they are the carrier of that voice of the
customer. And that voice is being fed back
into the business and makes changes in the business.
So we serve our customers better.
It doesn't happen everywhere though, but but it's it's the
the right way to go, I think, because the value is
unbelievably strong. Yes.
And of course relational value is slower to emerge than
transactional value. And so the temptation is always
to over invest in transactions and under invest in
relationships, which I think is interesting.
I'd like, I had a very mischievous phrase where I said
in many cases the customer wants the marriage and the chief
financial officer thinks they're running an escort agency, you
know, but you know, in other words, one person effectively
wants this long term relationship of ever deepening
trust and understanding and the person who's actually on the
other side of the relationship effectively wants it to be
transactional, where every transaction is a stand alone
event. Yeah, but that's where we need
the data so we can prove that this is this.
This is not just a costly exercise to be servicing
customers well and relating to them.
Is this actually a meaningful business strategy because it
makes the IT creates loyal customers in a different way?
And you've actually developed a model, haven't you, which shows
with the, I think with the Chief Operating Officer or the Chief
Financial Officer, you've developed a whole model which
effectively shows how a 1% increase in retention translates
into revenue and profit. Is that right?
Yeah. It was very important to us and
I think it's something we've struggled with in marketing for
years is to actually say how do we quantify the value we are
creating. And, and especially if you're in
financial industry, the more you can quantify the impact of what
you do, the the better. So we teamed up with, we teamed
up with our CFO after having actually cleaned our data and
made sure we had a global database of our customer data.
And then we kind of combined that with the financial data so
that we today have a view of our customers, how many we have,
what they spend on what, how long they stay with us, what's
the customer lifetime value, etcetera.
So we can, we can now measure what we call net revenue
retention and this is a measure, it's a metric that Fred Reichelt
kind of used and because he was unhappy with NPS not being so
quantifiable. So moving to NRR, where we can
see here, we can see on our customer base how much revenue
we got from our customer base in the previous year.
Then we look at how much revenue we lost by losing customers, how
much revenue we are losing by losing products from customers.
There's another bucket, how much income we have by renewals and
then how much income we have with upsell and cross sell, so
servicing more needs and then that comes then to a total
number. We look at that number over the
previous year. And then if we are, if we are
above 100, we have created loyalty.
We have more customer value with us from that customer base.
If we're below, we have lost loyalty.
So it gives us a number to have a discussion with our our
financial people on, but also with the markets and it moves
away from we just need to acquire some new customers.
It's it's we need to acquire new customers, but we also need to
loyalise the ones we have and make sure that they stay with us
because if they're, if they're fleeing us in drones is we're
not doing everything right. So.
So we need to learn from that on an ongoing basis.
And the model presumably accounts for the fact that to
acquire a new customer to replace one that you've lost is,
is now, I would argue, increasingly becoming more
expensive, isn't it? Yeah.
So once you actually put that comparison in, how much, Yes,
OK, we are spending some money on existing customers, but how
much would it cost to actually acquire a new customer to
replace any of these customers we lose?
You also know that, you know, any customer who's been with you
for two or three years is probably disproportionately
valuable because they're capable of being loyal, which some
people aren't. I mean there are there are
simple price chases in the market.
Yes. But we also learn, for example,
when we look at the data that if a customer has a life insurance
with us and they also have a car insurance with us, they stay
longer. That's logic, but they stay
longer for both. Actually, a car insurance is a
commodity product. It's a price game.
You go with the cheapest. But if we have a deeper
relationship with our customers, price is no longer so important
for them. They know what we're delivering.
They know the value is worth something for them.
So it's like it came from Lego where we had many customers
would buy eight boxes a year or ten boxes a year to an industry
where the, where the, where we may be selling 1.3 products a
year to a customer. So it's a very different world.
And there's not really anyone in the insurance industry who has
who has solved that Riddle of how we get customers to
understand or how we demonstrate to customers what value we can
deliver to them. There's there's still something
in that we need to find out. What you've also done, I think
is you've done some really interesting sort of experimental
behaviour in creating a customer focus.
And you, you, you use the analogy of a super tanker, you
have 60,000 employees. How on earth do you effectively
move that super tanker around so that it's facing towards the
customer more and perhaps towards the spreadsheet a bit
less? Yeah.
And it's also, by the way, I think you also have an
interesting issue of differentiation in that I think
the default position of the customer is probably some degree
of mistrust. And it's also worth remembering,
I think that in a lot of categories which have been
obsessed with cost cutting and excessive automation, a lot of
your customers are probably going to be once bitten, twice
shy. So they've had one bad
experience and effectively as a result, they kind of mistrust
the category. So, so as you said, making
yourself significantly different in the category.
And that basically requires, I think a cultural change.
It's not just a, it's not just a small process or an investment
in the call centre, though it will undoubtedly entail that.
So you've actually brought in kind of you've actually brought
in empathy training, is that right?
Yeah, that's, that's true. Yeah.
And and that's because they, it was very obvious to me after
having worked in a, in an industry in toys, that's a lot
about empathy, it's a lot about emotions and connecting on an
emotional level with the children and, and excite them.
And then coming into an industry that's very factual, very
finance driven and very inward focused and not focused on the
customer that, that it often. And then from listening to calls
and, and being in customer meetings, etcetera, etcetera.
It's we are extremely professional.
We're very, very good at what we do technically, but but it,
that's not enough. You know, you need to go from
not just talking to the head of people, but also talking to the
heart and connecting with them. So we, we started to set out
with ACX vision. So a customer experience vision
that it's every interaction should be about building a
meaningful relationship. Because if you only talk to your
customers very few times, you need to make that connection.
So it's not when somebody call in and they've had an accident.
Your first question should not be what's your policy number?
It should be. I hope you're well, I hope
you're good. And what happened?
What can I help you with So and, and in in reality, people want
to do the right thing. If you're on the phone, you want
to do the right thing. But if you for years have
learned that it's more about the technical skills and being
technical correct, how do we then move that to still being
technically strong and technically correct, but then
actually bringing your whole self into that conversation and,
and building that relationship. So we we started looking at
training for that. Because Mark Evans, I remember
he had someone on secondment at Direct Line from, you know, some
actuarial part of the business and they said, I don't know why
on earth they've seconded me to marketing because I'm rubbish at
drawing. And you always have, you always
have that terrible problem in an organization which I suppose the
dominant cultures are both legal and mathematical, that
marketing, you know, is a slightly uneasy bedfellow.
And so carrying, I know that I'm pretty sure that Cheryl, who's
the marketing director of Aviva, holds for the whole board of the
organization a customer day every year.
And it's effectively getting the entire board to spend one day of
their year entirely focused on the idea of customer value and
psychological value. Yes, that's a brilliant thing to
do. And I, I think it is important
that it's on their agenda as well.
You know, we also have the same strategy day every year with
our, with our board, which is also about the customer, but it
didn't used to be like that. And, and it's, it's, it's not
only on that level, you need to do it on that level, but it
needs to be in all, across all levels in the organization.
And then it, it's, it's about bringing it a home to the
organization. So they want to do it.
It's not like, OK, headquarter has asked me to do empathy and I
will be a nice and feely, touchy feely from now on.
It's, it's really a, a, a different way of doing business,
but bringing, bringing your human side to work.
So we're training it in two ways.
We're training it with, with online training where you can do
it in your own time and get the basic understanding of not
customers are not all the same. And this is how you could
address them. And this is how you can do
things in a, in a nicer kind of more empathetic way.
The other thing we're doing is deeper and that's where we go
into a department, say a claims department and we do kind of a
diagnostic first. So what's happening in this
department? How do they answer the phones?
How do they talk in emails? What are the issues they are
having, What are they being measured on?
How how do they find their day-to-day stressful?
So we do that diagnostics and then takes four days.
We talk to the leadership team about that and then we bring the
whole team together for a couple of days where we bring in
actors, that professional actors who will act out some of these
most prevalent scenarios. And then they will show them
variations of how these situations could be tackled in a
more empathetic way. And then it's interactive with
the participants there. And then they try it out
themselves, but they're not criticizing their colleagues.
They're looking at situations that they can recognize from
their everyday life because it's based on the audit.
And then they get it under their skin and then and then it's like
a penny drops and they get this can be a better, different way
of working. And what we're seeing after this
training is that in some instances, the NPS score and the
friendliness of the advisor goes up 20 plus points and it
doesn't, it doesn't drop again, it stays up there.
So it makes a difference. So they get.
Well, well, well, OK, because that would always be my fear
that you could bring in some improv actors and you would see
a short term change. But presumably because they
notice the change it has in the person they're talking to you on
the phone, they actually stick with the new behaviour.
Yes, they because they, you know, I think they genuinely
wants to do the right thing, but also they can see the impact on
happier customers. It makes their life easier and
they even see a strong impact on how they collaborate because
empathy also goes towards your colleagues.
So you bring these tools into play also with your colleagues.
So they, it becomes a more empathetic organization.
So I think that's the that's the real trick is to, to go to that
deeper level where people can see the difference and feel the
difference. It's not 20% percentage points
everywhere because if the level is already, yeah, it won't go up
that much. But it, it is significant and we
measured over time and it is a, it is a step change that
continues. So we have numbers now two years
back, it's the same level, yeah. And what's in terms of the
metrics you, or or rather you know, the bonus structure,
metrics you use to incentivize this behaviour?
Presumably you had to bring in a slightly new scoring system to
acknowledge this because one of, well, you know, one of my great
beefs is the extent to which call centres are in many ways
brilliant, brilliant entities, but they're often judged on
completely the wrong thing, right?
You know, how brief you can make a call seems to be a terrible,
terrible, terrible measure. How did you change the sort of
bonus structure? But we're, we're measuring them
on help, helpfulness and friendliness and, and the
satisfaction. So TNTNPS.
And then we also look at some of these more operational
standards. You know, that is so ideally in
my world, I, I wouldn't measure how many calls you have by, by
hour because that's a very negative.
But that takes a longer time to change some of these more
operational measures because again, it's, this is how contact
centres have been driven for years.
And, and it's, it's a bit of a journey also for the leadership
team to go to. OK, So once we changed how
friendly we are, how empathetic we are, we also need to change
how we're measuring this. So I, we, we haven't done a
total overhaul across all customer service, but that's
what we're standing in front of to look at as well.
Do you know Sapos? Yes, I, I knew, I knew a few
people who worked there that had an extreme.
I think they they at one stage they had a customer service call
that lasted 6 hours or something.
It was a, it was a point of absolute sort of principle with
them that you didn't get off the phone until the problem was
solved. Yes, and I think they had a lot
of influence on it, on everybody also on me.
I went there a couple of times and and visited them and, and
tried to understand their philosophy and I I thought that
was a a great break with tradition.
It's not about a factory that needs to churn out as much as
possible, is really about this connection.
They would also send out 10 pairs of views as if that's what
you wanted. If that's what you want, no, no.
And I also remember a story about Dyson which does this very
well, where someone was presenting the call centre
operational statistics, James Dyson, and he kind of
interrupted them halfway through and said, as far as I'm
concerned, if one of our customers chooses to get in
touch with us, we should treat it as an honour and respond
accordingly. Yes.
And that's what we do as well because we, we kind of as part
of this whole transformation, we also defined 33 standards,
customer experience standards where we looked at all our data,
what customers were not happy with and what we should be doing
better across the world. And then out of that we created
33 standards of what good looks like, what is it the customer
experience they are expecting and how should we be developing
that. So what we we define the
standards in, in the global organization and then each
markets are being tracked on how they improve these standards and
then they are finding their own way to deliver on them.
So so a standard could be the the conversation needs to take
place. Any conversation with a customer
needs to start where the last 1 ended.
That's a brilliant yes. So, in other words, you don't
have to effectively go through the long litany of explanation
more than once. Yeah, it's what you said before.
You shouldn't push your inefficiency over to the
customer. You need to make sure that if
you've asked this question before, that's captured and you
know it when you have a new conversation and that's it.
It's a stretch goal. It takes a while to get there,
but but it's a this is the ambition.
So we did 33 of them. Another one was it should always
be easy to find the contact details.
So if you want to talk to a human being, it should be easy
for you to find out how to do that.
We're not hiding that on on the back of a a brochure or
somewhere or. The the number of websites which
make it impossible to find a telephone number or any other
form of contact other than the website itself.
I mean, I think that's partly the fault of the people who
designed websites, who of course are probably disproportionately
telephobic and webophilic. So they are they are the kind of
person who designs a website is the kind of person who thinks
that all interaction should take place via a screen.
That could be, that could be, but there are also people who
are hiding behind. Also people who are deliberately
hiding behind it. There was a very brilliant
management consultant, I spoke to you once in the field of
customer retention, who said there was a single heuristic
rule which divided customer focused companies from customer
avoiding companies, which he said was whether the call centre
was allowed to call out. Yeah, he said that was a
complete, it was almost a complete sort of watershed
between the two, you know, between the two philosophies if
you like. And one of the strangest things,
which was I've always ranted about, which is almost certainly
one of your 30 or so measures, is that if the company never
willingly contacts you to help, your natural assumption is that
they're trying to hide. Yeah, probably.
Or that they're trying to avoid you.
And so when someone does call you and say, did that experience
go well or are you happy or whatever it may be, it's
extraordinary in terms of the potency it has because it's
suddenly creates enormous trust that this is an organization
which wants to solve my problem rather than avoid it.
Yes, yeah, exactly. And that's a clear demonstration
that that's you didn't consider the cost of making that call the
the contact was more important to you.
But if we go back to empathy, I, I think there's, we also did a,
a, a study on empathy and there's a clear gap between what
customers are expecting from companies on empathy and what
companies are delivering. And I think that was a big eye
opener for us that it's the customers wanted more.
So for example, in, in financial services, 88% of customers say
they expect empathy when they have an interaction, but only
63% feel they get it. You know, so there is a, a gap
between what are people expecting from companies and how
are they delivering on it. And I I bet you it's only going
to get worse with more AI coming into the picture.
Interesting, because AI could be used to make things better.
It will almost certainly at first be used to make things
cheaper, which is my great terror.
It's not, I'm not actually, well, I am frightened of AI in
the sense of, you know, killer drones.
That does frighten me. But I'm, I'm at a purely kind of
marketing level. What frightens me isn't AI
itself, but the uses to which it will be put.
Now in fairness, you have made a very good use of AI in rewriting
documentation, haven't you? So you, you, so this, I'd, I'd
love to know more about that. So you had sort of 60,000
documents or whatever that effectively needed to be
rewritten. Yeah.
So we went through this transition where we kind of
redefined the brand. We, we defined our visual
identity to be more humanly, humanly engaging and warm and,
and, and realistic in how we communicate.
But then we, we send out these letters or policies that nobody
can understand. So then there was a disconnect
between how we were presenting the the brand in advertising and
how we were then interacting directly with our customers on
an e-mail or on WhatsApp or in a policy.
So in order to create a new way of communicating, we created a,
a new com strategy. We called it tone of voice and
that had 10 principles for, you know, a void jargon, you know,
get tell it as it is, highlight what's in it for the customer,
use bullet points, simple, simple, simple rules and
direction giving. And then we created this AI tool
where you could take your existing document letter or
whatever it was, put it into the AI tool and it will come up with
a new version based on these principles.
So if you think about you have to rewrite all the documents you
have that a customer facing, it'll take years, it'll take
10's and 10s of years. But by this document, by this AI
tool, because this was not work that we hired new people for.
This was just a, a big workload, people being put on top of
people's day-to-day work. And then in order to make that
easier, we created this tool so they could quick, quicker get to
bigger solutions and, and the transformation is extraordinary
from where we were. And you, you kind of needed a
PhD to understand the three first sentences in a letter
today where it's easy, it's engaging, it's and, and there's,
there's still a human in the picture because it, the, the
system would come up with a new version.
Then you could say make it shorter, make it more friendly,
use more bullet points or, or edit it yourself.
So it was not without human oversight, but it just helped
the process. Did did it still need legal
approval at the end? I was.
Just wondering some some docu not all not all but some of the
documents did. That's that's true.
Because you wouldn't. I suppose you couldn't quite
trust an AI if you told the AI to be helpful.
You you couldn't quite trust the AI not to promise something that
it wasn't actually legally entitled to promise.
So, but, but, but that, that actually, when I think about it,
isn't it Because nearly every company of that size,
particularly in financial services, has this 10 year old
accretion of communications which no one's really looked at,
Funnily enough. You know, this is before AI.
You know, one of the projects, a friend of mine wanted to start a
business, which was simply, I'm glad we didn't because AI would
have killed the business, which was simply, we get good retired
copywriters once a day. You know, you'd find retired
copywriters from the advertising industry and you'd say, OK,
we'll pay you a few, you know, a few £100 a day or, you know, in
your retirement just to rewrite a single piece.
Yeah. That's quite meaningful as well.
You know, before, before we had AI, that would have been a very
meaningful process as well. Because if you just put your
people to do that, they're not necessarily good writers or good
communicators, the people who are in a normal department, but
the copywriters would be understanding how to see it from
the reader's perspective and making it understandable,
engaging, etcetera. So.
And and lawyers of course, are terrible copywriters generally,
because the entire focus is covering every possible
eventuality with the natural consequence that you sound
massively evasive. You know, you sound massively
non committal. You know, it's rather like, you
know, when you get married, you know, you say, do you so and so
promise to now most people answer, I do a lawyer would
always want to answer. It depends or to add some
caveats or some, you know, qualifications.
I think, I think that's I think that's really, really this is a
fantastic project. I mean it sounds and by the way,
I mean you could, you could significant, I think you could
put 1% on GDP if every single business of this kind went
through that same exercise of just making communication the
seem non evasive, non terrifying, comprehensible,
helpful, friendly. Do you, do you think one of the
things I'd love to do and it's not, it's not for me to do, but
somebody could do it, whether it's the Consumers Association
or some other body is to have a kind of kite mark for customer
service. So that organisations just as
you had the Plain English campaign, which was a very good
thing in the UK where all your communications could be
certified by the Plain English campaign.
If you actually took your 30 principles of customer service
and effectively said if you match up to these criteria, you
can display a particular logo because my my terror with
something like insurance where of course you don't really
understand the proof of the pudding until 18 months after
you've bought it. If the natural assumption of the
consumer is that customer service is going to be terrible
if you, particularly if you interact online, then what we're
seeing is the enormous, effectively an invisible lost
opportunity in lots and lots of people being unwilling to buy
very worthwhile things like insurance simply for fear of the
customer service nightmare that would result.
Yeah, I think there is a a place for a standard of some.
Kind of what? What good looks like almost
like. Yes, exactly the which Best Buy
and actually having because as you said, there are there are
cases where you know, a 19 year old buying motor insurance isn't
really going to care about the customer service.
It's a legal requirement. They can barely afford it.
They take the cheapest insurance they can.
And to some extent, you know, bad customer service is probably
a trade off they're willing to make.
But if you look at, I mean, one of the things I notice is if you
look at an ageing population where the old disproportionately
have the disposable wealth, generally the older you are for
a very, very simple reason, which is by the way, the older
you are, the more you value your time to an extent, OK, you know,
impending mortality, etcetera, etcetera.
Then actually those are people, those people who have more money
to begin with are willing to pay for the promise of very good
service. Yeah.
They also may be in some instances more dependent on it
or more or or kind of have lived longer.
So they understand what it means and when bad service is being
delivered what that means. So, so yeah, you have different
backgrounds and, and the and and we all, all companies have their
own focus customer group that they deliver to for sure.
I mean, if anybody ever wants to steal that idea and start a kind
of kite mark or verification mark for companies that meet
certain criteria in customer service, I'd be absolutely
ecstatic if someone stole that idea.
Because I think, you know, as I said, there is the danger that
at the time you make a decision, price is very salient.
Customer service isn't and consequently it will be in the
interest of many companies to reduce price of the expense of
customer service, which is probably what the consumer is
looking for at the moment of purchase.
But in the in the defining moment of experience, it's a
very false economy. Yeah, exactly.
And and that's also why we see that customers are very happy
even after a claim situation, because that's where they get
their pay back, you know, so that's, that's where we need to
be. There's a moment that matters,
and we need to live up to our our promises.
So you, this has been absolutely fantastic.
You forced me to go and actually investigate net revenue
retention. I did meet Fred Reichelt once.
For those of you who don't know, he was the originator when at
Bain. I think of the Net Promoter
score, which is the idea that recommendation, your willingness
to recommend is a pretty reliable metric to some extent
in terms of customer loyalty. And now the the net revenue
retention thing is his effectively metric to
financialize the value of an increase in that score.
Is that right? Yes, yes.
So his, his, his thinking is moving into that space and he
even takes it further where you deduct what you spend on
marketing as well. But we don't, we don't use that.
We, we stop at net revenue retention.
But we're very inspired by his thinking and and everything he
stands for is is very much the basis of what we think about
loyalisation as well and and how to deliver excellence to
customers. No, that's fascinating.
I mean, this is such a welcome finding for me because the
discovery that someone is actually trying to rebalance the
value of investment in retention and experience relative to
acquisition. And I think you then get rid of
that quantification bias where you're focused not on the things
that matter, but on the things that are easy to measure, which
I, I think is I think besets a lot of businesses nowadays.
Of course, some, some are really, it's easy for some if
you are digitally only to have these messages, you have it to
hand and it's easy for you to understand.
But more traditional businesses don't look at their business in
this way. So, so then it becomes a helpful
tool to change behaviour. And I think that's what we are,
we are all about in our journey is how can we help the
organization change the way they act.
Not by telling them you need to be customer focused by by giving
them tools and processes and structures and frameworks and
strategies that naturally takes them into a different space that
is more focused on the customer. And then we do the right thing
as a bigger organization collectively.
I mean, the most reliable metric of the health for the business
to some extent is customer retention in the sense that, you
know, there are businesses that, look, I mean, you know, the
classic example would be that thing that, who was it created,
which was a kind of Twitter competitor called Threads.
OK. You know, you can have a
business that grows immensely fast, which gets everyone all
club, clubhouse, OK. There are businesses which grow
immensely fast because they have some sort of novelty feature
about them, but they're not remotely sticky.
Yeah. And actually you equally have
businesses which grow very, very slowly but are very sticky.
So I've been spending a lot of time talking to the, you know,
the electric car, the car industry about electrification.
And the point I make is that my, my presentation was entitled.
Don't panic because I said that they'd solved the biggest, you
know, the biggest issue, which is, you know, ultimately in, if
you're looking at the next 5 to 10 years is simply that people
who buy electric cars very rarely go back.
It's, it's right. Europeans, for example, resisted
having automatic transmission for years and years and years.
And they came up with all, you know, I want the sense of
control you have with a manual gearbox and so on and so forth.
And it was a very slow migration.
But what ultimately happened was nobody who'd driven an automatic
ever went back to a manual. And so, you know, that question
of how effectively, you know, can you create the genuine
stickiness and lasting behaviours.
Now there is an issue, isn't there, Which is that I suppose,
do you have the fact in insurance that you can always
save a bit of money by being promiscuous or have you managed
to overcome that? Because it used to be that in
certain in certain forms of insurance, you bought a new
customer with a massive discount and then effectively then it
then the, you know, you charge them progressively more and more
as time went on. I think that that back that
practice has been kind of stamped out more.
It's kind of been stamped out, yeah.
Start it started very much in the via the regulation in the UK
kind of pushing back on that because it was a force economy
as well. So, so I, I think that's, that's
again a way of the past, but but still maybe sticks in some
people's. Yeah, I think, I think that
probably lingers in people's minds because I suppose it's the
expectation that matters, not the reality.
That's particularly true in insurance.
Well, all I can say is this has been absolutely fantastic.
I'm immensely heartened to discover there are people who
are taking this seriously and not only taking it seriously in
terms of, you know, investment, but actually in terms of
measurements and quantification. And I think I know who I'll be
renewing my insurance with. This sounds incredibly
happening. Well, that's the best compliment
you can get. Thank you very much.
Thank. You very much.
It's wonderful, Connie. Thank you ever so much.
That's a fantastic, by the way, very similar career journey to
my own in a way. OK, good to talk to you.
It's been a huge pleasure. Thanks ever so much.
Bye bye. Bye.