Performance Management Solutions

In this final blog on ‘customerization’, we take a look at the third major industry that has opted for this approach – the airlines

On a recent trip to South Africa, I had a very ‘customerized’ travelling experience. Instead of going to a travel agent, I surfed the web and found a site that provided an overview of all the airlines, their routing, and the schedules. This is, of course, what a travel agent would have done for me. Having selected a specific airline, British Airways in this case for ease of connections and the directness of the routing (only three flights in each direction), I surfed to their website to compare prices – again, a service previously provided by the travel agent. I then booked my tickets on-line, paid on-line and was sent an email that contained my electronic ‘eTicket’.

I then rang the travel agent and asked for their best price for the same route and found that it was exactly the same – I had, therefore, done all the work and received no financial benefit whatsoever. The airline, on the other hand, had received a benefit in that they did not now have to pay a commission to the travel agent. Read the rest of this entry »

In this second blog on ‘customerization’ we take a look at the banks, another industry that is seeking to make their customers responsible for transactional activity that was previously done by the business.

The ubiquitous ‘hole-in-the-wall’ cash machine – or, more correctly, the automated teller machine or ATM – is a product of the 1960s with the first machines appearing on the high street in the mid to late 1960s. The raison d’être for their existence was the idea that customers could be given 24/7 access to their cash deposits through the use of networked computerised machines that would read a magnetic card and allow the user to withdrawn money. In theory, this is an excellent idea and a genuine benefit to the customer at a time when there was more money around and being spent and banking hours were, to put it mildly, restrictive.

Like most things in the ‘customerization’ field, the idea was not conceived as a benefit to the customer but as a benefit to the bank. Traditionally, banks had ‘tellers’ who sat behind glass screens or metal grills and manually checked customers’ balances and then cashed their cheques so that they could withdraw money. Given that this was the only way of withdrawing money at the time, banks had to employ growing numbers of tellers (or cashiers as they were known in the USA) to cope with the lengthening queues of customers wishing to make withdrawals. The efficiency experts watched and checked these queues and the estimated waiting time – they also checked the speed with which the teller could conduct the transaction (estimated at 90 seconds to 2.5 minutes) and thus how many they could process in an hour (usually around 30). With banking hours restricted to 09h30 – 16h00, a total of six and half hours, it soon became obvious that one teller could deal with a maximum of 195 customers in a day providing each only wanted to conduct one cash withdrawal transaction. Read the rest of this entry »

There are different interpretations of the term ‘customerization’ and in my next few blogs I will look at one aspect: the process in which the customer is encouraged or made to carry out the transactional activities of the business.

Close on 50 years ago, my father, then working for Mobil, was project manager for the development and subsequent opening of the very first 24-hour self-service petrol station in the UK somewhere near Southampton. Today, just about every petrol station/service station is self-service but back then this was a radical shift in the operating model for retailing petrol.

The logic behind the move was impeccable as far as the company was concerned. The margin on petrol sales was minute, often as low as pennies per gallon, and the government saw it as an easy target for taxation which meant that there was adequate cash-flow but very little operating margin with which to develop the services on offer and to pay the staff of attendants who, until then, had filled the cars (‘pumped gas’), cleaned windscreens, checked the oil and water and generally provided a useful service to the customer. Now that was about to change – the attendants were to be no more, the customer himself or herself would now have to get out of the car in all weathers and fill their own tanks, clean their own windscreens, check their own oil and so on whilst still paying exactly the same price for their fuel as they did in pre-self-service days. The retail margins were simply too small for price discounting. Read the rest of this entry »