Bob Downie - Strive to keep customers on board

Published on Tuesday 4 November 2008 18:52

Royal Yacht Britannia chief executive says keeping business, rather than chasing it, is key to surviving recession, writes Ken Mann

SURVIVING the fallout of recession requires a sharper focus on captive customers than on conquests for new ones, according to a keynote speaker at yesterday's UK Customer Management Conference held at Edinburgh International Conference Centre (EICC).

That commonly used commercial statistic – that chasing new business requires five times as much investment as retaining a current portfolio – makes obvious economic sense at any time, but particularly in the challenging months ahead, argues Bob Downie, chief executive of the Royal Yacht Britannia, berthed at Leith and now one of the UK's top visitor attractions.

"If you have a competitive advantage and you market it properly, you'll be fine," he says. "But I think there is a whole raft of businesses that don't know what their competitive advantage is, if they actually have one."

Downie, a passionate proponent of dealing with the rudimentary but vital detail of managing customer relationships as a differentiator, founded the conference in 2003 in a bid to underline the importance of business retention, an area of commerce that he contends is too often forgotten, leading to serious disparities between customer expectation and the reality of service delivery in the 24/7 age. The bottom line can be loss of income.

"Customer management is the recognition that customer service is only the final action of a much more strategic focus on customers' needs and expectations. It is about tailoring your product delivery to suit them," he insists.

"Continually improving your products and services is the dividend you pay to your customers in return for their loyalty. If you don't have their loyalty then there are no dividends to pay to the shareholder.

"Look after the customers you already have. You obviously expand your business where you can, or explore new markets but you have to make trade-offs."

Downie makes the point that there is little about customer management that need be in the realm of rocket science or 'black art'. Instead, the vendor should go back to the basics of putting themselves in the shoes of the customer. And he rejected the proposition that customers in the 21st century are more unreasonable than counterparts two decades or more ago.

"Do a search on the internet, find out if anything appears," he advises. "If you already have a web presence, is it easy to navigate. Is it easy to find out what your contact details are – is you phone number clear on the website? If somebody phones or e-mails you, how quickly do you respond? What additional products or services are you offering? You are looking at needs and expectations, just the simple things."

There is little debate that communication is a crucial link in taking improvements planned by a business owner or the executive team to the front of house, and the customers actually being able to see them clearly enough in action for them to decide to stay with their chosen supplier of goods or services.

In both small and large enterprises, service-based and in industry, if information about process and procedure is not cascaded to those responsible for implementing it directly with the customer, then impact will be lost. Downie specifically rounds on a failure to connect.

"If you don't articulate (the planned experience) to your staff, then how on earth can you expect them to deliver it to your customers?" he asks.

"As you look for ways to improve your customers' experience, be aware that something like 50 per cent of their experience is emotional – hence why they might get disproportionately upset over things that are easily fixed, albeit afterwards and generally too late in the recovery process. This also gives you the opportunity to seek out easy wins that cost relatively little but which have high emotional value to the recipient."

Inspiring staff, encouraging and empowering them to fix problems at the earliest stage and employing people with the right attitude to represent the business in the first place continues to be a main theme at the conference.

"In very simple terms, everything that your business does 'front of house' should be aligned to the customer," Downie adds. "Whereas, in the past, many organisations were more determined to make customers comply with their rules and procedures, regardless of how customer-friendly they were. The customer, in return, was expected to be loyal in spite of the quality of the service experienced.

"Rather than making procedures more complicated to suit head office's internally focused systems, it is the process of simplifying and refining your customer experience which will drive success."

Author and business speaker Shaun Smith, mobile telecoms provider O2's customer service director Cheryl Black – also vice president of the Institute of Customer Service, and Conny Kalcher, vice president of consumer experiences at LEGO, were among the other speakers.