CRM case 2: British Gas case study

Introduction
In recent times, utilities such as British Gas have begun to spend significant amounts of money in order to better understand their customers through customer relationship management (顧客關係管理) tools. In the UK market of the future, customers are expected to start selecting or staying with suppliers on the basis of service rather than product and price. Customer relationship management (顧客關係管理) is providing the means to best understand the customer during this process in order to match expectations with experience. However, utilities thus far have generally failed to analyze their own workforces in relation to the proposition that they are promoting.
On the whole, this has been due to a lack of applicable data being driven by the HR departments. Market research has certainly uncovered the link between variables such as employee satisfaction and customer satisfaction, but has done little to define and then influence the chain of causation between them.
British Gas now readily accepts the link between employee morale, perceptions of the business, and the service that it delivers at the front line. It is also beginning to understand what types of employee behavior creates the greatest level of customer satisfaction among customers in particular situations. If this can be understood then efficiencies can be gained with a complementary increase in customer satisfaction. Already companies like Marks & Spencer, Royal Bank of Scotland and Vodafone are applying these kinds of workforce metrics to answer the needs of identified customer segments.
British Gas is to be the focus of this report because of its movements towards innovative new methods within its call centers, designed to improve the overall package it provides to consumers. The company has shunned examples set by other firms, setting up high tech centers in the UK rather than abroad and investing heavily in its operatives in order to facilitate a smoother, more efficient support system.

Case Study
Overview of workforce metrics in the marketplace
Recognizing that value generation is the future of electricity supply, British Gas is now investing in providing the systems to enable call center agents to deliver in the “moments of truth” customer contacts. This has meant a wholesale change to the back office to provide agents with the tools to be able to act in this manner, but also a reappraisal of HR practices for rewarding particular types of behavior. Indeed, old standards of performance measurement and rewards will inhibit nay change towards a new proposition based on targeted service.
From the technology side, British Gas’ systems enable it to identify “know callers” so that agent can view their transaction history and type of customer. This in turn helps the agent to tailor their response according to what and how many products the customer has bought, and whether they pay on time. This can even enable operational metrics such as time of call to be adjusted to better guide the agent for particular caller types.
From the customer’s perspective, the agent is then empowered to handle their particular query without the need to be handed off to other agents with the consequent repetition of their details and concerns.

Attracting mature applicants
The advantage to British Gas is the opportunity to deliver elite service to high-value customers, and a basic service to lower-value ones. The ability to recognize and then act upon this has called for a change in its resourcing model in order to attract more mature applicants with relevant product and service experience. To date, most of the company’s call center applicants tend to be between 20-24 years of age, and cannot necessarily relate to older customers’ generation expectations.
Certainly, as staff are expected to become proactive, involved in market research for products, cross-selling products, and profiling customers, a greater level of knowledge will be required. Unsurprisingly, British gas’ Scottish subsidiary, Scottish Gas, has therefore taken the decision to invest ￡21 million in a call center in Edinburgh instead of following the call factory/low cost option of Powergen in outsourcing certain service functions to India. Higher skill, high levels of commitment, and high morale will be one of the keys to success in delivering the multi-service proposition effectively and profitably.

Application of workforce metrics at British Gas
Call centers, operating on an independent basis, currently serve British Gas’s multi-service proposition, which includes energy, home services and insurance. Each center is organized around particular specialisms and product sets. However, in tangent with the development to computer systems, staff responsibilities are being reappraised. Each service member is being allocated one of three areas:
1) Customer Service
2) Customer Sales
3) Customer Support (Processing)
Within each of these areas, particular skills and competencies are stressed in training, taking a “job family” approach to support them. By aligning skill sets, knowledge and competencies with particular activities, staff can be more confident in their approach, and better empowered to handle customer service queries. By assigning individual role profiles to the three job families, employees understand what skills are required of them, and the performance measures related to their specific functions along with the associated reward framework.
Whilst this approach has been taken in the service centers initially, it is now being developed across British Gas. All employees from front to the back office are now being assigned to particular job families, with their reward packages being redeveloped as a result.

Implementation of job-family approach
The job-family approach has yet to be completed, but British Gas is considering introducing further layers to its front-line segmentation. Just as companies like Vodafone and Orange have gone about matching employee segments to customer segments, British Gas is now assessing these principles in accordance with its own customer relationship management (顧客關係管理) approach. In future this should allow the delivery of particular customer behavior aimed towards retaining and developing the relationship with exiting customers whilst also acquiring new ones.

Incentives and new billing techniques
British Gas now offers a paperless billing service, providing customers with a ￡5 annual discount per fuel for signing away from traditional billing. However, the company’s customers still expect excellent service, since these have been heir leading brand values in advertising.
Customers believe they are doing the utility a favor by providing their own meter readings, feel annoyed about waiting at the call center, and are reluctant to go online to have their queries handled. The difference is that these customers have been raised with high service expectations, potentially higher than those that can be profitably met. At a low cost utility like Atlantic, meter readings are only read once a year, with most customers understanding that this is the consequence of a low price.
With this in mind, British Gas has begun to manage its customer expectations appropriately, and one step at a time. The guarantees are being raised level by level in accordance with investments, but should eventually encompass factors such as call response time, email response time, and numbers of meter readings or visits. By such means, the company, with its service brand promise, can begin to deliver upon its word without necessarily incurring the high costs of meeting unrealistically high current expectations.

Conclusions
British Gas has recognized the crucial value that service staff must play if it is to succeed in offering a multi-service proposition. Its call centers simply cannot become call factories if its staff are to be sufficiently empowered and interested to deliver the “moment of truth” service that can lead to improved customer value.
The job family approach cannot be viewed as a simple HR procedure, but should be examined in relation to the proposition as a whole. Job families have been created as a result of improved customer relationship management (顧客關係管理) capabilities that can identify the “moment of truth”, and then tailor the service response accordingly. This inevitably involves higher training costs, but should enable British Gas to provide a service level that is differentiated by customer type, and therefore differentiated from the level of service provided by other suppliers. For British Gas, call centers are not a “necessary evil”, but are a lead generator and a sales tool.
As the market matures and price diminishes in importance, the role of service should increase in the customer’s decision-making process regarding switching, which could work to the benefit of British Gas. Its ability to influence this through the workforce analytical approach is in turn dependent upon whether appropriate rewards can be introduced to alter existing staff’s approach to service. This will require ongoing review, appraisal, and adjustment if truly customer-centric service behavior is to develop.