Banking

Don’t blame it on capitalism – FinTech Futures

My coffee machine broke. This is a crisis.

It isn’t totally dead which is why I can still manage to type and, you know, breathe. It limps along like a valiant soldier but it leaks hot water out of one side. The right side, if it matters to you

So I went on the manufacturer’s website to send out my SOS.

It was reassuring.

The manufacturer prides itself on its repair service: its collects, leaves you with a loaner machine so you don’t go without coffee and the manufacturer doesn’t have to go without you spending your hard-earned cash on three or four overpriced capsules per day and then it delivers your machine back to you. If you are under warrantee all this is completely free. Because the manufacturer still makes money on the capsules. If you are not under warranted there is a fee. Sure. Whatever. Fine. We get how capitalism works.

58 minutes into this process, I had a leaky coffee machine, a headache and an order for a new machine – from a competitor

Proceed.

Call us if you have a weekend emergency, they said, my people, understanding the gravity of the coffee situation. Otherwise email here and we will get the process going.

So. I email.

They email me back saying they have my email and they will arrange a time to call for a triage.

They call. I miss it and call back.

And just as I am beginning to get annoyed at the amount of faff, the real fun begins.

First I wait for 29 minutes. While a prerecorded voice tells me my call is important and have I tried emailing them?

Then the nice man answers. We go through the rigmarole of him identifying me and pulling up my email. He has it.

My name, the model of my machine and the description of the fault. Yes, it leaks water. Yes, out of the right hand side. No, not coffee. Water. Before it becomes coffee but after it’s been warmed.

Can we arrange a collection for repair, please?

Ah but I don’t have an account. Do I need one?

Well, I can’t speak to you unless you have an account, says the nice man, so let’s set you up.

So off we go, step by step, through the process of setting up an account (can you spell your name for me again? Was that PT or TT? And what’s your address again? That doesn’t come up, I’m afraid, can you spell it for me again? And where did you buy your machine? Doha? Was that nice?).

And you know what that achieved?

It confirmed that I was actually right and my machine was out of warranty. What do you know. I tried to pay them. And they tried to stop me but sadly I was right about when I had bought my machine and here we go. I would have to pay for this service myself. I knew that. Now they had satisfied themselves that I was right.

Ok.

29 minutes wait plus 14 minutes to set the account up, validate my email address, empty my coffee machine so I can turn it upside down and find the serial number.

We are now 43 minutes into the process and I am a little restless but ok, he is doing his job and he is super polite so I ask: can we organise the pick up.

No, madam. Why not?

We need to triage to see if we can fix it remotely.

Warm water is leaking out the right side of the machine when I make a cup of coffee. It leaks after it’s gone through the heat element and before it touches the pod. As I wrote in my email. What can we test exactly?

Well. You did write that, he conceded. Nonetheless, the young man on the phone was of an inquisitive, scientific bent and wouldn’t accept second-hand data. So we ran experiments. With a pod. Without a pod. Lungo and corto. He instructed and I executed and dutifully described my findings.

Which were: warm water is leaking out the right side of the machine when I make a cup of coffee. It leaks after it’s gone through the heat element and before it touches the pod.

None of this was done on video, you understand. So for all he knows, I was sitting in the bath pretending to go through the motions.

He trusted me.

And I took this seriously. I followed his instructions step by step.

He’s not to know that but, at least, after he had wasted a further 12 minutes of my time, he conceded.

Warm water was indeed leaking out the right side of the machine when I made a cup of coffee. It leaked after it had gone through the heat element and before it touched the pod.

55 minutes into the call, can I now arrange for a pick up?

Sure, he said cheerfully. But why would you? It’s £79 to repair and it takes eight weeks during which time you won’t get a loaner because you are a new customer (hint: buying a machine and my body weight in coffee every month doesn’t make me a customer. Having an account does, apparently) or, he continued, you can spend £69 to get a new model of your machine, postage included.

This is why we cannot have nice things.

58 minutes into this process, I had a leaky coffee machine, a headache and an order for a new machine – from a competitor. The nice man on the phone stayed with me though. He wanted to help. His triage wasn’t an empty gesture.

It’s a pity to throw out a piece of equipment that largely works, he said. It is wasteful. It is shameful. Let’s try and see if we can do something that saves you some money and gives this piece of kit a lease of life.

He tried for real. And I agree with his thinking and applaud his effort.

The problem is, you see – he explained – that we have outsourced repairs. So we make no money from that. That’s not our money any more.

He was sad as he said it. Because he’s a customer care representative with a lot of care in his heart and zero tools at his disposal.

He could see the unbroken chain of streamlining for efficiency and cost control, taking a part of the process and squeezing it so hard, it became a thing apart. Othering, we call that in sociology.

And when something is perceived as “other” there is no amount of neglect, abuse or violence that isn’t permitted from there on out. And although this is not a piece about genocide and civil war, that’s the process with which, one step at a time, a little opportunism leads to wholesale destruction in three rolls of the dice. Disassociation works fast with humans. And it goes deep. Sad but true.

But back to operational cost cutting.

If repair was seen as part of the lifecycle of the business, the wholistic approach would look at the manufacturing and repair cost, at membership and insurance packages as blended revenue opportunities – with surprise new flavour parcels and a free upgrades after years of loyalty giving the customer an incentive to keep spending with you. You know it works. You see it working around you every day.

Amazon prime is a brilliant example of making me think I am gaining something by spending more with a company. Because I am gaining something. They are also gaining a lot by investing a little in my long-term custom.

But back to coffee.

If your mindset says, “we build these things to last and them lasting is how we build a brand that monetises the client relationship with the device, the accessories, the coffee flavours, events, coffee based adventure travel. Whatever”, then you don’t undercut your own pricing by making a new machine cheaper than the repair. If the repair cost goes into someone else’s pocket though, you may be inclined to cut your nose to spite your face. And those of you who have worked under separate P&Ls inside a bank, know exactly what I mean.

This isn’t about coffee.

It’s about business and the common sense that is no longer common. It’s also about human nature.

If you see something as part of the whole, you see it as your responsibility to make the whole thing work. If you see that same something as “the bit that’s not important” you treat it as an overhead. You manage it, you contain it, you squeeze it: you make it small, because it’s an overhead. And if you see that very same something as not your problem then, before you know it, you are competing against it, whatever it is, undermining your own price point in the process, diluting customer loyalty and robbing yourself of an entirely untapped market of upcycled coffee machines for the hipsters whose carbon footprint matters to them in a way you could use to your advantage if you were paying attention.

The thing in question doesn’t change. Your perception does. And with it the treatment you subject this thing, whatever it is, to. And with that, the rest of the story changes irrevocably.

And yes, all this also applies to your banking services, the teams that become so myopically attached to their P&L that they will refuse to cooperate with the business down the hall and will treat the broker dealer team as more of a stranger than they do their suppliers, because the broker dealer team is now seen as competing for revenue, while the suppliers just want to get paid for the work they do, and isn’t it funny how the brain allows you to do that to yourself?

And no.

This isn’t a piece about how utility capitalism is bad. This is a piece about how lazy thinking is bad. True capitalism is brutal and voracious and has a lot wrong with it, but it knows how to monetise the whole value chain. And, if I may use a risqué analogy since epidemics are au fait right now: mature capitalism is a virus that never ever kills its host. The host thrives, you thrive.

Are you listening to me, bankers and entrepreneurs alike?

The nice man representing the coffee company on the phone deserves better than having to offer customer service despite his employers.

He deserves better. And so does the customer.

And there is a highly profitable version of the world where both the nice man and the customer get nice things. And the business thrives. Because the customer spends continuously and increasingly and the nice man deploys his talents towards ensuring the clients’ continued happiness translates to revenue. See how that works?

The trade off isn’t money here. We can afford nice things. We just can’t have them because we refuse to embrace complexity, to deploy creativity, to give ourselves a wider playground and bigger cycle of interests because we may drop a penny while chasing after the next pound.

We can afford them but can’t have them because we refuse to take the time and put in the effort in anything that is more challenging than the simple mechanics of exchange.

We eat the cake batter because we can’t wait for it to cook.

We pull out the sapling to put in a vase and consider trees someone else’s problem.

We focus on reducing cost because that needs no creativity, no thought, no iteration. Coming up with creative ideas to service and delight isn’t as easy as reducing cost. So we don’t do it. We take the road most travelled and that makes all the difference.

And then we look at the companies that create new value streams. That delight and engage and profit and say wait I want that. I want what that guy has.

So I will create an innovation department that looks like that guy’s team, four people swimming against the tide of suits in their company-issued hoodies.

Then I will give them next to no budget and next to no time and definitely no freedom because I am not going to change who I am to be like this other company i admire. I don’t want to be like them, I just want to have what they have.

So I will imitate a couple of things here and there and that should do it.

Meanwhile, however, while I am playing at creativity over here, in the rest of my business, I will carry on doing what I have now learned works: I will grab my partners across my business, whatever their size, and squeeze them for all they can yield right now. Burning bridges. Squandering good will. Going for immediate maximum reward as if the future is someone else’s problem. Someone else’s P&L, another country altogether.

While we playact at creating value in expansive ways over here, in the hope that some theatre can get us the good things we covet, across the rest of the business we will shorten the horizon, we will willingly blinker ourselves, limit the exam question and treat every interaction as a cash moment, every relationship as a one-off grab what you can end of season sale in a fintech version of the thieves dilemma; assuming a zero-sum game and, therefore, bringing one about.

#LedaWrites


Leda Glpytis

Leda Glyptis is FinTech Futures’ resident thought provocateur – she leads, writes on, lives and breathes transformation and digital disruption.

She is a recovering banker, lapsed academic and long-term resident of the banking ecosystem. She is chief client officer at 10x Future Technologies.

All opinions are her own. You can’t have them – but you are welcome to debate and comment!

Follow Leda on Twitter @LedaGlyptis and LinkedIn.


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