Switch Hack

So BA’s annual results are in and all is looking rosy.  Profits for the year up to 31st  March stood at £883m up 45% on the previous 12 months. But look closely at the gleeful exec board, look behind the champagne and streamers and you’ll see a hint of something a little less joyful in the back-patting boardroom. That, my friends, is the deep-seated, rather uncomfortable awareness that there are good profits and bad profits.

We all know it. Bad profits are measures to create additional profit to the detriment of long term shareholder value. Bad profit means you get a customer on a plane, but you neglect to worry about that customer’s  impression of the brand. It is all about expectation management; if you charge a premium for service you have to deliver it. You can’t give a Ryanair service and charge a lot more. You have to remember that customers have a choice and in a recession, where we all have less money to spend, we expect more.
 
A national institution like BA should place far more stock in the mood of the public and bonuses should be dealt out in the context of customer service scores – not the FD’s. They should pick up bonuses if the net promoter score of the business has increased. The net promoter score of a business measures how much customers would recommend the business to other people on a scale of 1 to 10. A score of 9 or 10 makes them positive promoters. We did some recent research within the travel industry Emirates and P&O provide the most highly recommended experience to travellers, with a net promoter score of 32.  Virgin also ranks among the top three with a NPS of 27. Companies who have higher net promoter scores make more money

And BA? Well, last year, BA flew in for 9th position with a NPS of just 11. I wonder BA would sit after the T5 fiasco? Next year, BA would do well to focus on what its customers think and then the bottom line will do pretty well anyway.
 

by Nikki Sandison Brand Republic  - 20th May 2008

LONDON - Citigroup is closing down its mortgage operation Future Mortgages and its CitiFinancial unsecured loan business, affecting 400 people at a call centre near Sunderland.

The US bank said that it planned to close its Doxford call centre near Sunderland, where 400 people are employed, and 49 CitiFinancial branches, employing 300 people. The businesses will stop offering new loans from tomorrow.

Citigroup said that it was shutting the sub prime businesses to concentrate on its more upmarket Citi and Egg brands. The bank is consulting with the staff affected and it is understood that some may be offered jobs elsewhere in the group.Future Mortgages specialised in providing first and second mortgages to sub-prime borrowers applying through brokers and other intermediaries, while CitiFinancial provided unsecured loans again to borrowers introduced through intermediaries.

Bert Pijls, business manager for Citi’s UK consumer business, said: "Following a strategic review of the consumer business in the UK, Future Mortgages and CitiFinancial were not identified as areas for strategic growth."By proposing to focus resource on our Citi and Egg brands, we are reflecting Citi’s global strategy and creating a platform for expansion in the UK personal finance market."

Pijls took over in March after the departure of Ian Kerr, the previous head of the operations who left shortly after Egg wrote to 161,000 customers cancelling their cards because, it claimed, they had poor credit records. Citigroup’s move comes two weeks after Barclays revealed plans to close a 900-person call centre used by its recently acquired Goldfish credit card business.

SwitchHack Response:

It’s interesting news that Citigroup is the latest financial giant to pull its sub-prime operations; mortgage operation Future Mortgages and its CitiFinancial unsecured loan business. However, totally unsurprising as sub-prime operations are always the first to see the plug pulled in the face of an uncertain economic climate. What actually surprises me is the rush to cut jobs at the company’s Sunderland call centre. The official line being that resources will be refocused on its Egg and Citi brands.

Let’s just hope that this means redeploying some of the affected people back into providing excellent customer service for those brands.

It won’t be ‘too little, too late’ gestures from the government that will pull us out of the economic slump. It will be a return to personalised customer service, and proper standards where the customer truly is king.

For an organisation that has recently displayed such ill-advised and alienating customer communications (Exhibit A: the Egg card debacle), Citigroup must put its money where its mouth is and ensure Egg and Citi customers see the results.

The last ten years have seen technology loaded up like a barricade at the door between brand and consumer. (Press 1 for your account details. Press 2 to speak to another computer. Press 3 to feel even further removed from the business you are spending your hard earned cash with.) What the smart brands are realising is that technology should be used to enhance and advance human connection – not replace it. As purse strings are tightened, consumers will be even more choosy about how they spend – and it will be the brands that master customer communications that survive the downturn. It is understandable that Citigroup is streamlining its business, but it will be unforgivable if it misses the opportunity to refocus on consumers through flexible, human interactions.