Yorkshire and Humberside CIH event Customer Insight and Performance Improvement 26 March 2013 – De Vere Village Hotel, Morley

Post event briefing

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Yorkshire and Humberside regional board – post event briefing The Yorkshire and Humberside regional board have commissioned a series of briefings to complement the range of seminars and events offered to CIH members across the region. A briefing is published after every event to ensure that all members, whether they have attended the event or not, can access the key issues raised, practice approaches shared and find out more about the topics discussed. This briefing provides an overview of the key points from the presentations and discussions at the Customer Insight and Performance Improvement event held on the 26 March 2013. To download the event presentations visit www.cih.org/Presentations/Customer_insight

Previous post event briefings can be downloaded from www.cih.org/yorkshirehumbersideresources

Introduction to the event Attended by over 50 delegates from housing providers, local authorities and commercial organisations from across Yorkshire and Humberside, the Customer Insight and Performance Improvement event provided attendees with an understanding of why it vital that housing organisations ‘know’ their customers. Having an insight into the circumstances and service expectations of customers is central to developing and delivering services which are both cost effective and ensure customer satisfaction. The event considered methods of measuring performance and the importance of ensuring this is done through the perspective of the customer rather than the organisation. Benchmarking was also explored; in particular the need to ensure this activity is undertaken within a wider context than just social housing.

Regional events programme 2013 The regional board have set an outline programme of seminars for 2013 – future topics include empty homes, private sector housing and a welfare reform update – more details to follow. The regional board will also be holding the AGM and event on the 11 July. This will be held at the Yorkshire Sculpture Park near Wakefield. More details to follow.

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Introduction from Stephen Blundell Chair of the Yorkshire and Humberside CIH regional board

A more challenging and ever changing operating environment requires today’s housing practitioners to have a much greater understanding of their customers’ needs and wants. This is vital to ensure the development of effective service responses. The housing sector has always collected data on its customers, but perhaps we haven’t always used it as effectively as we could have? Providing support and advice to housing practitioners across the region to enable them to respond effectively to the challenges and opportunities faced is a key focus for the Yorkshire and Humberside CIH regional board. We hope that today’s event will provide attendees with some ideas around how they might approach customer insight and satisfaction. Traditionally the housing sector has judged service performance through KPIs – but these focus on the ‘internal workings’ of the organisation rather than from the perspective of our customers. The commercial sector has gathered customer insight data and used this to build brands and secure new and repeat business – we need to do the same. Further information For information on this event, this briefing or the work of the regional board please contact Stephen Blundell, Yorkshire and Humberside CIH regional board chair. Email: stephen.blundell@lfha.co.uk

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New approaches to performance improvement using UKCSI Chris Elliott, Client Manager, the Leadership Factor

Email: chriselliott@leadershipfactor.com Tel: 01484 467047 - 07867 511531 www.leadershipfactor.com

Chris provided an overview of the UK Customer Service Index measure and how this could be used by social landlords to improve performance. In addition, Chris noted the importance of why understanding your customers makes excellent business sense. The Leadership Factor is an independent agency who specialise in the measurement of customer satisfaction. Undertaking over 400 customer satisfaction studies each year, the company works with a number of housing associations across the UK including Leeds Federated, RHP, Affinity Sutton and Poplar Harca. ‘Excellent customer satisfaction and experience is achieved by doing your very best at what matters the most – to your customers and nobody else!’ Key points

Controversial / contradiction – criticism of traditional peer benchmarking but also recognises the value of this depending on how it is used

Why carry out satisfaction research? Illustrated by simple request from attendees – asked to think of a product they love / hate. The responses identified that people love / hate products and services for different reasons. You need to know what your customers love / hate

‘Customer satisfaction or dissatisfaction is the feeling a customer has about the extent to which their experiences with an organisation have met their needs’ – it’s a relative measure. The key areas are feelings / experiences / needs

Customer satisfaction – has changed in complexity over the past 4 decades o 1970s - customers wanted functionality and quality, products and services had to deliver

what they promised. The 80/90s saw the new differentiating factors of brand and price. Now – new layers of emotional attachment to products and services through customer experience and engagement.

Customer satisfaction and housing

Has never been higher on the agenda – the new freedoms/ regulatory framework allows for bespoke measurements

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It is critical to understand your customers’ needs – customer satisfaction seen as the ultimate judge of success

Cost of not engaging effectively with customer satisfaction – dissatisfied customers often complain more, this impacts on front-line staff, who may leave thus resulting in increased training/recruitment costs – a clear financial benefit to the organisation

Approach taken – needs to deliver more than just insight into customer needs – actions need to be incorporated into the organisational strategy.

Peer benchmarking – pitfalls

Can be limiting – can be useful, but depends on context

Does it look through the ‘right lens’ – from the perspective of the organisation or the customer?

Have questions been designed with input from your customers?

Geographical context – are the requirements in Leeds the same as London?

Does your approach deliver more than insight?

What measures are used – verbal scales can be too subjective o % satisfied / very satisfied – a weak measure – need to look at satisfaction and importance

to customer – this considers the greater complexity of the relationship with the customer o To improve customer satisfaction a more ‘tough and honest measure’ is required – a

numerical measure rather than subjective ‘verbal’ measure can give this. Alternative approach – compare against the best – UK Customer Satisfaction Index (UKCSI)

The UKCSI is a national measure of customer satisfaction for the UK, owned and published by the Institute of Customer Service

With 5 years' worth of trend data, it's a fantastic resource for benchmarking data and for establishing objective truths about the performance of organisations in the UK

Benchmarking becomes more interesting and useful when you don’t just compare against other housing providers – your customers won’t naturally compare you against other housing providers, they will compare your service against other commercial organisations they interact with.

Doing what matters most – the ‘right lens’

The ‘lens’ of the customer or organisation?

Often quality measures are developed in-house, for example, ‘we will answer the telephone in 3 rings’ – but have you met your customer’s expectations in doing this? what outcome do they want?

You must work with customers to identify the core issues important to them ‘everything hinges on giving customers what matters most to them, even if that proposition seems less exciting than focusing on novelty, uniqueness or that latest management or technology fad’ (Barwise & Meehan).

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Customer satisfaction model – suggested approach

Explore the research

Roll out measures - what’s important? – carry out a sample

Understand – what matters most?

Prioritise matters

Put into practice

Measure – importance and satisfaction (10 point numerical scale)

Data can be used for staff and contractor performance management – build your requirements into data gathering.

Maximising the effectiveness of your results

Often data is gathered and organisations do nothing with it – use your data and feedback

Housing providers can improve their customer satisfaction by doing more than just peer benchmarking - develop ‘ honest, reliable and robust measures’

Break the shackles of imitation as a result of a focus on peer benchmarking – don’t limit comparisons

Deliver small gains to generate a cumulative effect to raise overall levels of satisfaction. Q&A Net Promoter Score v UK Customer Satisfaction Index score – is the recommendation / net promoter approach better? With a recommendation focus (net promoter) it is often difficult to extrapolate data for use to drive improvements. Customers may be happy with your service but may not recommend for a variety of reasons for example, a fan of a steak restaurant wouldn’t recommend to a vegan friend. Complement the use of net promoter data with the UKCSI. Numerical scales allow for greater analysis and correlation than subjective / verbal measures. Measure against service standards / levels of expected performance and deliver what is ‘expected’. To ‘wow’ look at making cost effective changes to improve satisfaction. Satisfaction drivers and building customer confidence – is it better to do less important / easy wins and ensure effective feedback rather than taking time to tackle more important / longer term issues?

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It’s a journey of understanding in terms of your data and results. You may identify some quick wins but a greater depth of analysis will help you to make recommendations around the ultimate benefits of a decision/ whether something is achievable. Is it better to focus on what customers like and do more of it? Low satisfaction - results in low retention and more complaints. These cost an organisation in terms of reputation and resources. Higher satisfaction rates are associated with fewer contacts and higher customer retention – this operation costs less to service. Example given – 13 % of dissatisfied customers take up 43% of budget to deal with. Remember to focus on effective feedback and sharing good new stories. Digital access and customer satisfaction Often the ability to view data is restricted on smaller viewing screens – could this affect customer satisfaction? It is important to have multiple channels of communication open to customers. Further reading and information on these topics can be accessed through the following links: Customer Insight Magazine – A new approach to customer satisfaction in social housing - article by Chris Elliott / Leeds Federated Housing Association The Leadership Factor Website includes a range of resources

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Changing to a customer focus Simon Williams, Research Manager, Leeds Federated Housing Association

Email: simon.williams@lfha.co.uk Tel: 0113 3861127 www.lfha.co.uk

Feedback from customers and an increased awareness of their needs has enabled Leeds Federated Housing Association (LFHA) to make the transition from a process driven organisation to one focused on positive customer outcomes and practical improvements in service delivery. LFHA measure and compare their customer satisfaction through the UK Customer Satisfaction Index (UKCSI). This is the main measurement of customer satisfaction in the UK and includes some of the biggest well-known brands and companies along with a range of housing associations. Since commencing with UKCSI in February 2012, LFHA customer satisfaction levels have steadily increased.

Key points

Historically – some poor performance and satisfaction scores and little understanding of what was important to customers

Positive change on this agenda driven by –

2008/9 - made concerted effort to collect 90% of customer profile data

2009/11 - set up a customer research programme

2011/current - started using the UKCSI.

10 key lessons to help improve customer satisfaction 1. How customer focussed is your organisation’s customer focus?

Lens of the organisation or lens of the customer?

Are your strategies customer focussed?

Customer feedback – do you use this as a board and staff performance management score and formally report to tenants?

2. Do what matters most to your customers

Find out what’s most important to your customers and deliver it consistently well

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LFHA introduced 3 customer focus groups – these framed questions and set satisfaction and importance scores

3. Only ask your customers questions that matter

Previous examples of different staff asking lots of different questions, with different measurement scales and data

Now a single research programme and consistency to enable data to be analysed over time

4. Turn your customer feedback & insight into action

Use the data gathered to focus on improvements and make changes

If you don’t change your services or change them to a customer focus – you can’t improve

See actions through from the feedback stage - it’s often difficult to do in practice, but essential

You said..we did – feedback to customers – only 5% do this!

5. Keep promises and commitments made

For LFHA this has been a priority - whilst staff were trying to be helpful, they were often not clear in their commitments made to customers. This left customers with the impression that LFHA would deliver a service, but staff didn’t feel this is what they had committed to

Be careful about what you promise and commit to

6. Make services easy for customers

LFHA service standards – have shifted from 102 different service standards to 4 – easier for all to understand

Customers want:

Great Customer Experience: We’ll deliver a great customer experience, making it easy for you to do business with us

High Quality Services: We’ll offer services that you want and need, and deliver them to a consistently high standard

Listening and Learning: We’ll actively listen to your opinions and involve you in developing and improving our services

If We Get Things Wrong: We’ll do our best to put things right for you if we make a mistake

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7. Impress complainants – they can be a real asset

Turn complainants into advocates for the organisation

8. Be flexible in responding to customer needs

How flexible are your procedures to adapt to customer needs?

Look through the ‘lens of the customer’ – what is the request from the customer? What emotional impact will your action deliver?

There are no rules / policies for this – staff need to be flexible, this will build your positive reputation and is great for customers

9. Question - is the sector as good at service quality and customer satisfaction as it could be?

The average housing association score isn’t bad when compared to around 80 other housing associations who participate in the UKCSI

However, when comparing housing associations to other sectors – i.e. a real world comparison – satisfaction for housing associations can be seen to be much lower. This lays down a challenge to the housing sector – with satisfaction levels increasing every year in the UK, we clearly need to improve levels of service as a sector

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Remember, our customers benchmark our performance against other organisations they

interact with in everyday life – so it is vital to benchmark more widely than restrict comparison to only other housing providers

10. Keep learning from your customers

Using customer feedback and customer insight to improve services takes time and commitment

Negative perceptions will remain until the service is experienced again. Q&A Lesson 8, in the context of the current economic climate, the ability of staff to be flexible and go the extra mile can be difficult, especially in respect of vulnerable customers or those with chaotic lifestyles – do we need to be careful about offering too much flexibility? Can we compare with more commercially focused businesses? Acknowledge there is a different relationship between retail consumers with a greater level of choice than a social housing customer – however, in this situation it is more important to ensure that high quality services are delivered in a consistent way. How do you stop staff from ‘overpromising’? You must raise staff awareness of this – through training and increasing understanding of the impact on service delivery/ budgets of not being clear with customers. All staff at LFHA have been through Mary Gober customer service training. Staff are supported to take ownership of issues. Insight and customer satisfaction are very important – how do you put these together with community development? At LFHA we also have a broader neighbourhood focus – with feedback from communities being gathered and used to shape priorities and service delivery. Further reading and information on these topics can be accessed through the following link: CIH (2010) Understanding needs and delivering services

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CIH (2012) How to…deliver excellent customer service TSA (Archive) Tenant insight – a toolkit for landlords

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Using customer insight to tailor services and support Rachel Willoughby, Changing Places Manager, Wakefield and District Housing (WDH)

Email: rwilloughby@wdh.co.uk Tel: 0845 8507507 www.wdh.co.uk Gathering and using customer insight data will be an important factor in an effective response by housing organisations to the challenge of welfare reform. WDH’s involvement and experience from the national Direct Payment Demonstration Project illustrates how data can be used to focus on and respond to customers’ needs to help mitigate the impact on both the organisation and its customers. Key points

The Direct Payment Demonstration Projects are running from June 2012 until June 2013, testing how claimants can manage housing benefit monthly payments ahead of the introduction of Universal Credit from October 2013 and the appropriate level of safeguards needed to help secure landlord income streams if tenants fall behind on their rent. WDH is one of six projects

A range of data has been required to underpin the project work – questions WDH asked - what did they need to know, what data did they already hold and in what format, what would customers tell them, could they identify support needs, how accurate was the data held already?

Project – rolled out to 2 postcode areas – broadly representative of customer age / stock profile

Identified a range of issues from the pilot areas – the data will be used to inform future business approaches / services / support

o Banking – at the outset, WDH understood that 96% of their customers had a bank account however, when looking in more detail many of these accounts were not transaction accounts – so the data has flagged a new challenge, that of the need to transition customers to appropriate bank accounts

o Predictions based on payment histories – new data challenged previous preconceptions o The impact of life events – data and analysis flagged how and when payment problems

often occurred o Payment patterns and methods – customer insight data illustrated that many preferred to

deal in cash. This was underpinned by a mistrust around Direct Debits – this affected confidence around using a bank account effectively

o Undisclosed problems – data highlighted how customers got into rent arrears as they repaid other debts. Customers made decisions around how, when and on what to spend their benefit

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The future – it’s important to establish data sharing protocols / agreements with partners – to help flag potential problems and allow for timely action. For example, identifying those affected by the bedroom housing benefit cap or when a housing benefit claim has ended

Organisations need to consider what information they need to collect, what systems will facilitate this and how will this be stored / accessed

Using the data gathered – analyse and plan services. Does the data flag any new needs / emerging markets?

Major challenge of the welfare reform changes – supporting customers to go on-line. Data indicates low levels of IT access even in areas with a lower age profile. Response - supporting customers to get on line and opening a .com store

The process of participating in the welfare reform project has identified how little is known and how much is needed to be known about customers.

Q&A Direct payments – what approaches are available for tenants to pay their rent? Rachel noted that WDH had ended cash payments at offices in April 2012. They currently offer a range of options for payment including Direct Debit, Standing Order and Post Office payments. In the light of the forthcoming changes is a shift back to cash required? There are a number of considerations with this – can people access an ATM to withdraw cash? and there is also a risk of carrying cash. Direct Debit is encouraged, however WDH recognise this is not right for every customer. Rent payments - a priority debt? Is there a duty on or agreement with the banks to prioritise? There would appear to be some education issues around understanding the need to prioritise payments for rent from bank accounts. This does not generally happen despite attempts via letters of appropriation. Profiling of tenants via data gathered during gas servicing contact – did WDH use this data? This was a useful exercise, although time consuming and therefore might not be a possible approach in the future. Discussion around the ‘basic’ information to be gathered and collated to assist businesses going forward included – customer Universal Credit payment date, if the customer has a transactional bank account and does the customer need support to manage their finances?. It’s essential to gather data on the customer’s financial health. Supporting vulnerable customers and access to local funding – do WDH have any influence with local Supporting People service commissioning? Is there specialist support available? In terms of the Direct Payment project, the selected participants were drawn from general needs housing stock. Going forward there is an expectation that the local authority will provide support on Universal Credit claims. Debt management – accounts which are a ‘safe haven’ for benefit payments WDH have worked with the local Credit Union to ensure access to a ‘jam jar’ transactional account. Customers are also encouraged to look at other bank accounts which are generally available. A key driver underpinning Direct Payment is self-responsibility; however, there is an obvious need for education around bank account management.

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Direct Payment Project – worked with nearly 2,000 customers – what are the challenges of scale up? There are huge challenges to roll out wider. Some customers required significant prompting and contact to pay their rent – sustaining this level of interaction is a concern. Customers make choices with their money like anyone else – for example, if the washing machine breaks and it costs £10 for a load to be done at the launderette, most likely a decision to buy a new washing machine would be a priority for spend that week. How did Christmas affect the arrears levels within the Direct Payment Project? There are always blips in terms of non-payment irrespective of time of year. For example, August often sees customers needing to buy school uniforms. In terms of the Christmas impact, some payments were not made in both November and December. WDH encouraged payments quickly before Christmas as they realised the offices would be shut for a while and this would hinder prompting for payment. Payments over the period were incentivised by a prize draw. And the issue of heating costs is another pressure. Were there any evictions during the project? No, a decision was made at the outset to not evict during the project, however, other usual arrears chasing / management procedures remain in force, for example, Notice of Seeking Possession. There is also the option to revert payments to landlord at 8 weeks arrears / 15% underpayment. Ultimately, customers have had the funds and have made choices if they have not paid their rent and action needs to be taken. Another forthcoming challenge is the mismatch between benefit payments and rent cycles – for example, Universal Credit will be calendar monthly but rent is 48 weekly. Further reading and information on these topics can be accessed through the following link: WDH – Special briefing on Direct Payments and Welfare Reform