Category Archives: Digital Economy

Customer service revisited: Navigating The Last Mile

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From time to time, I like to comment on the current state of customer service, because this is still one of the key areas where companies can differentiate themselves. So, based on recent experiences with a bank, an insurer, a telco and an e-commerce site, I’m sharing my thoughts on the Last Mile – where even great products and great companies can fall down due to their inability to truly understand the customer experience they create.

Image sourced from LinkedIn

Image sourced from LinkedIn

1. The Bank

After waiting over 30 minutes in a call-centre queue, I eventually spoke to someone who said she could help me with a query regarding the disparity in the amount and rate of interest earned on one of my savings accounts. But first, I was given a choice: either accept an instant $50 “goodwill” payment now, or wait for the outcome of her investigation. Because the amount I was querying was several times that offer, I requested she look into the matter further.

Leaving aside the fact that she failed to get back to me within her stated timeframe (I only managed to re-engage the bank when I queried the lack of response via their social media account…), it transpires that she gave me incorrect product information. This underscores one of my main complaints about customer service – inadequate product and process training. Her supervisor who picked up the query then offered me a $10 “goodwill” payment for my trouble (overlooking I had already been offered $50!).

It was only when I insisted that the amount I was potentially out-of-pocket was closer to $300, and following a protracted and somewhat terse negotiation did the supervisor choose to exercise her (undefined) discretion and settle for an amount in between $50 and $300. While the outcome was closer to what I had expected, the customer service process and experience were far from satisfactory.

2. The Insurer

My home and contents policy recently came up for renewal. I noticed that, even with a customer loyalty discount, the premium increase was far higher than current CPI. It seemed to me that a previous “special discount” I had been offered when I last updated my policy at a bricks and mortar branch, rather than by phone or online, was now being clawed back (and then some) with the latest premium increase.

So, I shopped around online and found a better deal. When I rang the original insurer to advise them I was cancelling and taking my business elsewhere, they said: “Is there anything we can do to keep your business?”. My response was, “Too late.”

I accept that premiums may have to increase. But rather than simply sending out a renewal notice asking for more money, I think the better strategy would be to provide an explanation for the increase, and demonstrate the additional value I would be getting for renewing my policy. I resent being taken for granted, because the insurer clearly assumed I would simply pay the increase on demand, and only attempted to offer a better deal when I rang up to cancel.

3. The Telco

Late last year, I switched telcos, because the service was increasingly reliable, and I had experienced poor customer service from the start of my contract. In the process of transferring my mobile, fixed line and internet accounts, I notified the telco that I was dissatisfied with their service, and was taking my business elsewhere. I also initiated the return of my telco-supplied modem, to avoid incurring any additional fees or expenses. 

However, the telco continued charging me for certain services, long after I had discontinued using them, and 2-3 months after they had been ported over to my new service provider.* I requested the refund of the overpayments. The telco refused, because they claimed they had not actually been formally notified that I wished to cancel the services. So I lodged a complaint via the TIO, but the telco still denied any liability, and refused to refund my money.

Eventually, a TIO Investigation Officer was assigned to my case, and he agreed that on any reasonable reading of my complaint, the telco should have concluded that I was cancelling the service. The telco continued to resist my request for a refund:

E-mail received May 31: “[We have] reviewed the complaint and have decided that we will not be changing our position on the matter.”

I believe that the Case Officer then suggested that the telco listen again to the calls I had made, and place them in the context of the other contemporaneous events and the full history of my contract. He also advised the telco that he was prepared to initiate a full and formal investigation of the complaint.

Only then (and in a remarkably speedy U-turn, worthy of a politician) did the telco respond:

E-mail received June 7: “Thank you for your time and patience throughout this case, it is really appreciated (sic). We apologise for the poor level of service you’ve received that led you to escalate to this point. This is not the kind of service we want our customers to experience and it’s very unfortunate that you have to go through this, especially after you cancelled as a result of the poor service.
 
We will be crediting the account with $XX for the period from the XXth December 2015 to the XXth February 2016 when the service was active after it should have been terminated.”

I’m clearly grateful to the TIO for their assistance, but frankly, it shouldn’t have to get to that point. For an organisation that prides itself on superior customer service, the telco in question clearly does not understand customer experience.

4. E-commerce

There are several reasons why I prefer to order online, rather than buy from local shops: convenience, choice, availability, service and often price as well. Speed of delivery is usually not a factor, especially when ordering from overseas (although in many cases, ordering from overseas can be quicker than buying from a local online store).

However, I’ve recently experienced some delays in overseas deliveries, and upon investigating the matter, discovered that, quite apart from a lack of knowledge on the part of some customer service reps (that old chestnut), the multiple links in the supply chain can result in mis-communication and mis-alignment of their respective operating systems.

For example, if the online retailer does not actually fulfill the order, or if they or their nominated carrier outsources customs clearance and/or the final delivery, there may be as many as 6 or 7 hand-off stages in the process. Unless all the back-end platforms talk to each other (and in the same language), the risk of stuff falling between the cracks is very high.  (The notion of same-day delivery by drone is probably some way off…)

What is particularly frustrating is when one part of the vendor’s website has the (overdue) ETA as one date, but another part of the same website shows a much later ETA – even within a single platform! Perhaps if retailers got their upstream systems in order, the Last Mile would be more likely to take care of itself?

*Footnote: My original provider is merely a re-seller, and therefore is subject to wholesale access provisions. According to some information I received from my new provider, it is illegal for a telco to charge for services over which they no longer have any control or access.

Next week: Field report from Melbourne #Startup Week

ASIC’s new regulatory sandbox for #FinTech #startups

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Last week, ASIC published its eagerly awaited public consultation paper on the so-called FinTech regulatory sandbox. ASIC Commissioner, John Price and his colleague Mark Adams launched the paper at a special meeting of the FinTech Melbourne group, hosted by KPMG. There was also participation by FinTech Australia represented by its new CEO, Danielle Szetho, and by the Digital Finance Advisory Committee, represented by Deborah Ralston.

sandbox-295256The Commissioner was at pains to stress that, notwithstanding the developments within FinTech, and ASIC’s contribution via the Innovation Hub, the primary focus of the regulator is to “promote confident and informed consumers and investors, and to promote fair, transparent, orderly and efficient markets”.

To reiterate the point, Mr Price stressed that while the Innovation Hub is designed to help FinTech startups navigate the regulatory system, as well as reducing red tape, there should
be no compromise in ASIC’s fundamental regulatory and licensing regime.

ASIC will continue to adopt what it calls a modular approach to licensing and regulatory oversight, that includes: the ability to operate as a representative of an existing licensee; a focus on organisational competence; and the use of waivers and the “no-action” policy and decisions.

However, ASIC recognises the issues and barriers to entry that face some FinTech startups such as speed to market (a function of technology outpacing compliance?) and organisational competence (do firms need to hire in these skills and/or provide specific undertakings to that effect, or can they make use of third-party resources?). In ASIC’s view, by helping firms to reduce the time to market and to enhance their organisational competence, FinTech startups will be able to overcome the further barrier of access to capital. But there still needs to be acceptable consumer and investor outcomes, and efficient markets.

The proposals include additional guidance and discretion on organisational competence, and a limited license model that makes use of third parties as an alternative to establishing in-house organisational competence from day 1 (e.g., using an accounting firm as an external reviewer or sign-off), and limited exemptions during a defined test phase, yet still subject to some constraints to maintain a balance.

To clarify, ASIC currently exercises its discretion when assessing organisational competence based on the nature of the financial services and financial products to be offered, and the collective knowledge and skills of the people in the business. Under the proposals, the limited license will offer some additional flexibility to heavily automated business services and models, whereby the business can rely on professional third-party sign-off for compliance plans.

The sandbox exemptions will only be available to new Australian entities (to focus on startups) and only for a 6-month duration. It will be confined to certain financial services only – such as providing advice and arranging transactions. It will not include market making, and consumer protection will remain paramount. Once the limited license has expired, companies will either be instructed to cease operations, become an authorised representative of an existing licensee, or submit a full license application.

Other restrictions on the sandbox exemptions mean that applicants must be advising or dealing in liquid products (equities, managed funds and deposits), so not superannuation, insurance or derivatives. There will also be a cap on the number of investors (e.g., 100 retail clients), and on individual exposures (e.g., $10,000 per client), with an overall cap of $5m (but possibly unlimited in respect to wholesale clients?).

Participants must demonstrate they have adequate compensation arrangements, such as holding appropriate professional indemnity insurance and participating in an external dispute resolution process. They must also operate under core conduct and disclosure principles (e.g., disclosing trailing commissions).

There is some thought that sandbox participation could be “sponsored”, by third-party advisers, startup hubs or venture capital funds. This would operate on a “no liability” basis, and would primarily offer a preliminary health check of the FinTech applicant’s proposed business model. Above all, there will need to be adequate notification and reporting requirements, including a feedback process.

When comparing these proposals to what some international regulators are doing, ASIC believes they are more progressive than their counterparts. The UK is adopting a restricted licensing model, the US is using a “No action” process (more focused on credit providers?), and Singapore has recently announced a hybrid sandbox proposal.

During the Q&A session, the following issues were aired:

  • Is ASIC in favour of mandatory client recording? No, it will continue to rely on industry best practice
  • Is general insurance included in the sandbox? No, ASIC is not looking at risk-management products to be part of the exemptions.
  • If incubators and/or VC’s are able to be sandbox “sponsors”, how will ASIC deal with potential bias? ASIC says it is alert to practices such as unreasonable “fees”.
  • Would a new entity or product from an existing authorised representative be able to access the sandbox? It wasn’t clear whether this would be covered, but presumably not if it did not meet the “new business” requirement?
  • Would the sandbox be available to non-financial services co-creating products for existing AFSL holders? Again, it wasn’t clear – but if it was a new business applicant, presumably it would. (This also raised the issue of “mature” businesses using disruptive or outsourced services as a way to access the sandbox.)
  • ASIC will encourage companies to apply for a full license prior to end of the six month test, to ensure timely compliance
  • What will happen as a result of people playing in the sandbox? Clearly, ASIC has a vested self-interest in learning about and getting exposure to innovation, but it needs to demonstrate a pro-active and efficient approach.
  • What are the key criteria for the sandbox exemption? ASIC does not have a prescriptive approach (subject to the sandbox restrictions), so it will look at each application on its merits (e.g., short vs long-dated products, simple vs complex, retail clients vs wholesale), and focus on the financials, the organisational competence, and the business model. And obviously, experience counts.
  • Timing of the sandbox? ASIC hope to see it operating by the end of September (Responses to the CP260 are due in by July 22).

Subject to the consultation feedback, there seems to be general industry consensus that the sandbox proposals are to be welcomed. But there are still some grey areas, as evidenced by the Q&A, and nowhere did I here anything specifically relating to the new emerging class of programmable currencies and other digital assets, many of which are pushing the regulatory boundaries, as well as disrupting traditional markets. And with current equity crowdfunding proposals stuck in Parliament, nothing happening there either.

(For some other responses to Consultation Paper CP260, check the following articles:

http://m.smh.com.au/business/banking-and-finance/asic-to-build-fintech-startups-a-regulatory-sandbox-to-test-ideas-20160608-gpe4l7.html

http://www.financialobserver.com.au/articles/fintechs-welcome-regulatory-sandbox-proposal

http://www.fintechaustralia.org.au/#!Why-the-Fintech-Regulatory-Sandbox-is-a-Game-Changer/ll9ed/5757cd8f0cf245cf71a32089)

Next week: Customer service revisited

University Challenge – #Startup Victoria’s Student #Pitch Night

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There were around 500 people in the audience for last week’s #StartupVic University Startup Battle, which either says there was nothing better to do on a chilly Melbourne evening, or that this new Meetup format is working – or that the students of today are less interested in finding a job, and more interested in building their own career opportunities that connect with their purpose. (Our political leaders should take note….)

A sell out audience for the University Startup Battle (Image by Stefan Welack sourced from Twitter)

A sell out audience for the University Startup Battle (Image by Stefan Welack sourced from Twitter)

After a series of campus competitions, the finalists on the night were representing 6 of Victoria’s universities, and revealed a wealth of talent, ideas, innovation and inspiration. In order of appearance, the pitches were:

InternMe – (Victoria University)

With a tagline of “Experience the Experience”, this is a 2-sided market for graduate recruitment, that revealed some interesting stats about the student employment market.

Revenue is expected to come from fees for successful placements, and job advertisements. The business plans to cover work experience, internships, part-time and temporary work during study, as well as permanent and full-time roles.

Currently sourcing leads via LinkedIn and social media (notably Instagram), the founders say they may include psychometric profiling tools for better matching applicants with opportunities.

The pitch was to raise $100,000 for website development, but as the judges commented during the Q&A, the biggest challenge is engaging employers. As regular attendees to these pitch nights will recall, this mismatch or disconnect between students/graduates and employers continues to provide startup opportunities.

Printabox – (Swinburne University)

This website is designed to reduce the time, cost and complexity of ordering short-run branded boxes. Basically a self-serve model, the founders have spent $500,000 in development costs, primarily on a proprietary design tool. The resulting products come in 3 standard sizes – perhaps more customisation will become available?

The target clients are the 44,000 online stores in Australia who often need small numbers of branded boxes for sending out customer orders. But as the judges noted (based on a quick online search) there does appear to be a lot of competition. And although Printabox claims that their source code is protected, they have not applied (or are unable to apply) for a design patent.

Mech X Innovation – Project Ora – (Deakin University)

The founders have developed a hardware device that fits on standard tablet computers, and is designed to help children reduce and prevent eyesight damage caused by too much screen time, and by being too close to the device.

Essentially a Bluetooth-enabled accessory linked to an app, Ora monitors the amount of user screen time, proximity to the device and ambient lighting, and can be used in conjunction with “time outs”, scheduled messages and reminders to “go and do something else”. It can be semi-customised, so that parents can create a reward system, for example.

According to the designers, the competitor products (Appomate and samtime) are app-based only, and focus on time and distance – not lighting. Ora may also integrate with other devices, e.g. FitBit, but the target market is children and teenagers up to age 18, and their parents.

Asked about their path to market, they are planning a crowdfunding campaign. The key to adoption, though, will be via schools (who either provide or prescribe what devices pupils use) and schools suppliers (e.g., digital text books and e-learning tools).

ICallDibs – (Monash University)

This idea grew out of direct user experience, namely how can overseas students coming to Melbourne buy and sell furniture? The business is aiming to provide a market place for “Second Hand Furniture, First Class Deals”.

The biggest challenges faced by international students when buying/selling furniture are transportation, timing and finding buyers/sellers. The business will offer bundled services, including storage and removals/delivery, via partnerships.

The company aims to target international student agencies, and will ensure better matching between buyers and sellers (although they may want to consider changing the name unless they can trademark it….).

Rather than an “Ask”, the team offered a “Give” in the form of a customer discount for the evening’s attendees.

When asked about logistics and insurance, the founders clarified that the counterparts (buyer and seller) bear the direct risk. The business takes their commission upfront, then release the order details to the customers.

Assignment Hero – (Melbourne University)

It felt that this app, a collaboration tool for group work (sort of Slack for education?) was speaking to the converted, given the audience response. In short, having access to lots of different collaboration tools sounds great, but they each only do one or two things (albeit, really well). And if you use more than one app, you end up with too many tools and too many notifications.

While students may hate group assignments, they’re an important aspect of learning how to work with other people and acquiring other soft skills. They also seem to comprise a greater component of student assessments – possibly because they require less direct teacher-student face time?

Rather than build a whole new system, the founders have opted for native integration with Google Docs, plus some dashboard reporting tools (including the amount of individual input to a project).

The app is free to end users, but will generate revenue from education providers (enterprise sales) and on-demand services and commissions. When asked about existing tools like Moodle and Blackboard, the founders noted that these were designed for teaching, not collaboration.

It was also noted that existing productivity apps are not easily accessible by students (although no doubt, as with education content providers, enterprise app vendors will make student versions and pricing available). Plus, the “edtech” sector is of particular interest when linked to life-long learning, professional development and self-directed study.

Eat Up – (RMIT)

Finally, Eat Up is a social enterprise trying to address the number of school children who turn up at school without anything for lunch – estimated to be as many as 1 in 8 schoolchildren. Personally, I find this an indictment on our society – why should anyone in Australia need to go without basic food? – but the causes/reasons are far too complex to address here.

Essentially a partnership for sourcing, assembly and distribution, Eat Up has created a service model which they hope to roll out in more and more schools. They tap into the established Food Bank network for supplies, engage TAFEs to prepare the lunches, and use OzHarvest and SecondBite for logistics. There has also been support from Virgin Australia, ygap, Karma Canteen and Education Changemakers.

Eat Up aims to avoid passing on the costs to kids, parents or schools, and in part takes inspiration from another social enterprise, Thank You Water.

During a panel Q&A, the founders were asked about the apparent lack of technical skills or resources on their teams. In response, it was noted that there are many open source apps, available templates and market places for code and plugins. One founder commented that despite studying computer science, he used very little of what he learned to develop his app.

Revealing another apparent weakness in their pitches, the founders were quizzed on their respective sales models, costs of acquisition and pathway to revenue. The responses suggested that the startups risk being limited by their own inexperience, and that they each need to do more market analysis, assessment of customer willingness/ability to pay, and identify the best ways to scale their businesses.

There was also a lack of clarity around near-term goals and milestone planning.

In the end, the winner was Assignment Hero, no doubt reflecting the needs of the audience, plus the fact that the business has gained traction with some universities.

Next week: ASIC’s new regulatory sandbox for #FinTech #startups

More on #FinTech, #Bitcoin and #Blockchain in Melbourne

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The Melbourne FinTech community brought together a bunch of interested parties recently to find out what’s happening locally in Bitcoin and Blockchain. Organised by the Melbourne Bitcoin, FinTech and Silicon Beach Meetups, and hosted by the Melbourne Bitcoin Technology Centre (MBTC), the evening was part open house, part info sharing, and part pitch night.

BitcoinThe MBTC is now a recognised hub for Bitcoin and Blockchain activities, and currently hosts around a dozen startups within its co-working space. Offering a “full service” facility (it even has a Bitcoin miner on site), complete with staffed reception, meeting rooms, event space, a pod cast studio and an outdoor barbecue area, it’s something of a hidden gem in Melbourne’s Southbank. Regulars also get to attend Bitcoin “swap meets”…..

Last week’s event also featured a number of micro-pitches from Bitcoin and Blockchain startups, a few of the MBTC staff and tenants, and a couple of student projects from RMIT.

Given this was almost “speed pitching“, it’s probably not appropriate to go into too much detail:

  • Toodles – a dating app on a decentralized network, using a Blockchain solution for additional security and privacy
  • Blockfreight – the Blockchain for global freight, enabling cargo containers to be shipped around the world with minimal legacy documentation, based on smart contracts, RFID and Blockfreight tokens
  • blockTRAIN – a training provider and consultancy on Blockchain, smart contracts and digital currencies
  • Bitcoin Buskers v2 – sort of MySpace/Bandcamp/SoundCloud for Buskers, to promote their merchandise and to secure international festival bookings, all powered by Bitcoin
  • ACX – Australian Crypto Exchange, offering the largest single Bitcoin order book in Australia
  • Bitcoin Group – explaining that most Bitcoin mining is currently done in China due to cheaper electricity
  • Antstand – portable laptop stand (which you can buy with Bitcoin!)
  • Think Bitcoin – providing consulting and education services, particularly in schools
  • Lyra – an app to track and reduce your personal environmental impact, sort of Fitbit and Smart Meter combined
  • ImagineNation – innovation consultancy, backed by training and coaching, and featuring a 2-day startup game to help organisations transform cultural mindsets around agile, lean, design thinking, UX and incubator/accelerator concepts
  • Brave New Coin – the “Bloomberg for Bitcoin”, providing market data (prices, rates, indices, news) for Bitcoin and other digital currencies*

With the next Bitcoin halving due soon, and a significant uptick in FinTech, Blockchain and Digital Asset investments announced during Q2, this sector is going to look very interesting for some time to come, and it’s good to know that Melbourne, whose fortunes were founded on gold, is staking a claim in these new asset classes.

* Declaration of Interest: I have recently joined the team at Brave New Coin as Head of Business Development – more news to follow….

Next week: University Challenge – Startup Victoria’s Student Pitch Night