On the way up from London the other day, I was flicking through the in-flight magazine and there was a feature on a British based luxury phone maker. In the feature, the CEO was talking about his business being completely customer focused. He says his business is driven by his customer’s needs and desires. It’s not driven by products. And I believed him! He doesn’t sell on price, and if he tried, his business would fail. He talked about his products in the terms of ‘affordable luxury’. The customer gets to pick and choose the features he or she wants and pays a price, according to those choices.
Usually, whenever I hear the phrase ‘customer-centric’ or ‘We put the customer at the heart of our business’ being banded about by product providers; and, let’s face it, that sentiment if not the very words will probably be front and centre in every one of their core value handbooks; I can’t help but scoff.
It pains me to say this, but we’re just a little bit crap (to varying degrees to be fair) at the customer stuff in our industry. We like to think we’re good, but we’re not. And never have been. That’s why trust is low. That’s why we have a savings gap. And a protection gap. And a pensions crisis. That’s why we have such tight regulation. That’s why we see misselling fines being handed out all the time. It’s our own fault. And we don’t seem to learn.
The direct platform market is a case in point. Most providers are totally focussed on product, not customer. They are clambering over themselves in an attempt to sell the cheapest widget and drive market share. They’ve taken their eye off the customer completely; if indeed they ever had their eye on them in the first place.
Some are better than others. The ones who have an upfront account charge, with no ancillaries, like trading charges and unreasonable exit fees, are ‘in my opinion’ slightly further down the path to righteousness than those providers that have a headline charge and then a long list of extras. Making sense of all the extras ain’t easy.
Yes, the info’s there; I’m not accusing anyone of hiding charges; but boy, do some make it difficult for a customer to work out how much they’ll end up paying. If you deliberately make it tortuously hard for customers to arrive at a figure that might be close to the total cost of ownership, then you really have no right to claim you’re;Â putting the customer at the heart of your business. You’re quite clearly not.
Strangely enough, it’s actually the extra charges guys who would find it easiest to adopt a really transparent approach. They just need to be upfront with the myriad of charges and communicate them simply (oh, don’t look all aghast and say you do that already; you don’t). If the customers really are as happy to pay the extras as the providers say they are, then it shouldn’t be a problem. Or am I just being completely naive?
I long for one; just one; provider to say we’re not playing this game anymore. This is our price. We’re proud of the different services we offer. We think our customers value those services. And here, in complete transparency, is the breakdown of our price.
Better still, if a provider could say, Here’s our basic product price; the price of the technology that allows you to do stuff in a simple way. If you want bespoke investment reports on a regular basis, it costs this amount; do you want that? You want a risk profiling tool? OK it costs this. Here’s what it’ll cost to invest in xyz funds and this is what we make from the fund managers we’ve managed to secure favourable prices with; are you ok with that? If you want telephone support, it costs this do you want that too?.
Surely the technology exists to allow providers to properly tailor their services around customer needs?
The points in a proposition that cost the provider money should be set out clearly and the customer should be given the choice to opt-in to those services, or not. Only then can a provider say they are truly focused on the needs of the customer. If they can’t, or won’t do this, then they need to stop suggesting they give a toss about customers at all, and continue the price race to the bottom that, in the end, will destroy the industry and erode customer trust even more.
In short, all providers must do better in articulating that ‘ADDED VALUE’ thing they all keep twittering on about. But remember, you don’t get to choose what’s valuable. Only the customer can do that.