Hundred years with patronizing treatment

Phillip Lews in VaasaEET said: ”Hundred years with patronizing treatment of customer, a belief that customers are just public regulated meters and that the retailers have a right for a 5% return on investment does not lead to a healthy relationship between retailer and customer”. Lews claims are sharp and to the point but could perhaps do with some nuancing.

ACT ON INFORMATION

More and more companies, both utilities and retailers, have understood that they have to start caring about these wretched creatures that pay the bill and live with the meter point. An understanding of the problem, unfortunately, does not lead to positive change. An example that is often used is Powershop.com from New Zealand. Powershop.com´s focus is uncompromised customer focus, beautiful design and generous customer service. Under the hood they use “best of breed” standard components and a lot of tailored code close to the customer. Powershop.com´s mission is to challenge the traditional energy retailer dinosaurs and their existing business models. What I find interesting is that Meridian Energy, the largest dinosaur of them all in New Zealand, owns Powershop.com. This shows that understanding changes and customers can lead to real and positive change, for the customers. In Norway, however, the mantra is often: “We want to, but we are not able to…” I am sure that most companies don't want to treat their customers poorly. In many cases the blame falls on problems with existing industry standard IT solutions. They are not forward-looking enough, simple enough or cheap enough. Many experience that the existing tech setup is a black box. This leads companies on a search for more generic non-industry standard products. In my opinion buying a new, stylish CRM systems will lead you down the same road once more. You are actually replacing one black box with another.

HOW YOU BUY STUFF MATTERS

Large tender processes are not the solution. The industry and technology is changing so quickly that before the ink is dry on your RFP, with 3500 requirements, you are already too late. A significant percentage of the requirements are probably out-dated or wrong. The idea of using one to two years on a tender and implementation project just doesn’t cut it anymore. Some are legally required to go through the tender process, but even then there are well-tested methods on how to start the process before starting on a list of a million requirements. Your future is about finding partners that actually want to share your success. So, instead of using a lot of money on writing an exhaustive lists of requirements, use a small portion of the money on a prototype. It might be useful to know if a supplier's sales pitch is full of bullshit or not before you sign an agreement. I will argue that attacking the problem in a more agile manner will lower your organization´s risk and cost considerably. Looking at it from a technical standpoint I believe that introducing small limited components that does a few things really well will also reduce your technical risk. It will also lead to lower operational cost as you go.

CHANGE IS NOT A TECHNICAL ISSUE

A good example is the product development velocity of telcos. We are talking days and hours. Just look at the roaming battle between Telia and Telenor. This kind of velocity would not be possible without an architecture and tech setup that supports it, and let’s not forget the organization. Change is mainly an organizational problem, and not a technological one. The velocity of change, product development and innovation is supported or stopped by people. We have moved past the time where technology was the problem. You need to use at least as much time on your organizational architecture as you do your technical architecture.

Your customers are changing continuously and so must you. By increasing the velocity and switching to “hardcore” customer focus I believe that a fundament for success is there. If you are to join the race you need to adjust your ambitions and do things smarter, faster.

(This op-ed originally appeared in the norwegian magazine "Energi", 15.09.2016)

Published 10/24/2017 by

Arild Soldal