Peter Martin The winter sun glints on the dome of the world’s only non-denominational cathedral. Across the way, Japanese cars glide past unidentifiable glass buildings. Inside the bland but pleasant offices, endlessly ringing telephones are answered in a babel of languages. It is a shrine to that misty business concept, the Death of Geography.
Few places embody the concept more clearly than the offices of the Merchants Group, a management consultancy based in Milton Keynes, just north of London. Merchants specialises in “customer management”, which usually means setting up computer-assisted call centres, where specially trained telephone staff handle customers’ queries, requests or orders.
There are hundreds of big call centres in Britain alone. And as large companies increasingly integrate their European operations, there is a steady growth in the number of pan-European multilingual call centres. Usually companies set up their own internal operations; sometimes they outsource the task to suppliers such as Merchants.
The next time the phone rings in Milton Keynes, it is a Danish customer of an American computer-printer maker, dialling a local number in Denmark. He is answered by a native Danish speaker, who calls up a Danish-language database of possible responses and likely diagnoses. If the answer is not in the local computer, the operator can turn to the parent company’s database in Oregon. And if the problem requires more expertise, it can be passed to a specialist technician.
This is the glamorous end of the business. There is also a more routine aspect; and a more revolutionary one. At the routine end is the process of treating the telephone as the primary means of contact with a customer, a task being tackled with varying degrees of enthusiasm by a wide range of businesses, especially Britain’s privatised utilities.
Doing this means setting up proper systems to handle telephone calls. It means disentangling the task of handling customer queries from a dozen different responsibilities with which it has traditionally been intertwined.
It means gathering enough data on customers - who they are and what they want - to give the operators a chance to respond competently. It means acquiring high-tech equipment: automated call directors to send the call to the right operator, and computers which pull up customer details on the screen as soon as a caller’s phone number is recognised. And it means writing computerised scripts, selecting staff mature enough to cope with difficult customers, motivating them, and assuring the quality and consistency of the service they offer.
At the revolutionary end, the call centre offers the potential of creating entirely new business models, cutting out large elements of the cost of traditional product delivery systems. Direct Line insurance and First Direct banking in the UK, Comdirect and Bank 24’s direct banking in Germany, AMP’s new PriorityOne home-loan business in Australia, and a host of other new businesses round the world illustrate the potential.
Financial services are a particularly attractive sector for this approach, but the growth of third-party logistics services - to handle warehousing and shipping - makes it feasible in more traditional manufacturing businesses as well.
Most businesses setting out to overhaul their customer management will fall somewhere in between the routine and the revolutionary. Although the tasks involved in setting up a call centre should not be underestimated, they are in some ways just the tip of the iceberg.
Once customers are encouraged to deal with their suppliers by phone, their expectations undergo a marked shift. Telephone contact implies immediacy and responsiveness. A traditional one-week or two-week cycle in dealing with orders, complaints or requests is no longer good enough.
“Once you can get a pizza in a guaranteed 30 minutes, a phone and a credit card become useful,” says Mr Paul Scott, head of Merchants’ consulting services. “But there is no point in offering people a next-day pizza delivery service.”
Traditionally, companies have seen a telephone contact as an inferior experience to a face-to-face contact with a local rep. But if the telephone contact is friendly and well-informed, and achieves speedier, more effective results than a visit from a rep, it may actually be something that the customers prefer. To achieve this, however, requires more than simply recruiting some friendly telephone operators: it may also mean a complete overhaul of all the company’s business processes, to deliver the service that a telephone contact implicitly promises.
There is another way in which shifting to a call centre approach may change the fundamental business. It requires companies to face up to the extent to which they have, and can expect to have, a relationship with their customers. Companies often over-estimate both the intensity and the warmth of their customer relationships. Yet they have no hesitation in planning elaborate expansion centred on exploiting an existing customer base - without establishing whether their customer relationships can really bear the weight of the extra products and services they hope to sell.
Utilities which hope to move from providing, say, water to selling also gas and electricity rely on the strength of the customer relationship to give them an edge in newly competitive markets. To do this, they need to be sure that customers regard the relationship as a benefit, not a burden to be escaped as soon as deregulation permits. And that, in turn, requires overhauling the whole of service delivery - not merely the tone of voice on the telephone.
What are the wider implications of this quiet trend? The most seductive is the concept of the Death of Geography : customers’ physical location becomes irrelevant to their ability to receive seamless service from their chosen suppliers. Paradoxically, that means a much greater degree of attention to what the customers’ location or nationality is likely to mean about their expectations, legal entitlements, tastes and requirements. In a geography-bound distribution system, such national issues are largely implicit, imbibed by the country staff with their mothers’ milk. Once service is to be supplied at a distance, these issues must be explicitly identified and addressed in the central database.
It also requires companies to achieve global integration of their processes and databases. Mobile consumers increasingly expect this, but it is seldom attained in practice.
Successful international companies have managed to build global brands for products and to some extent for services. They have rarely managed to impose the same degree of standardised quality on the customer experience, but may increasingly have to do so.
There is one other implication: many service jobs are likely to become exportable, just as those in manufacturing industry have been in recent decades. Already, countries like Ireland and cities such as Amsterdam have started aggressively bidding for business as pan-European call centre locations. You do not have to be a full-fledged believer in the Death of Geography to see the opportunities - and threats.
At a more mundane level, the lesson of Milton Keynes, and the hundreds of other call centres, is that the combination of telecommunications, computing power and ever more discriminating consumers - trends which are individually unremarkable - are producing a profound change in the relationship between companies and their customers. Call centres are merely one, particularly vivid, symptom of this wider change.
