Media-Insert Communications

Cost-cutting for the sake of it is out, and profit through long-term strategic marketing is back in the driving seat. That’s the view of Graham Ede, the refreshingly frank managing director of The Ion Group, which was established in 1995 after a visit in 1994 to an American company, the Unique Prospecting System; the inspiration behind his company’s ethics and philosophy, which reflect a more commonsense and positive approach to customer-centric marketing. The backbone of his strategic thinking lies in his statement that: “Nicheness is good, volume isn’t!”

The essence of his company’s philosophy and overall opinions, which parallel many of the views of the Chartered Institute of Marketing’s Technology group and to a certain extent the CIM’s own Marketing Effectiveness campaign, is outlined in the company’s mission statement: “Our aim is to become the UK’s leading independent, contact centre and fulfilment service provider. The success of the company will be gauged by our clients’ perception of the service they receive – and not our perception of the service we deliver.”

The Ion Group does not strive to be like Sitel, which focuses much on short-term and high volume campaigns. Ede believes that small is definitely more beautiful, more flexible and potentially more profitable. The type of clients he prefers are those like Proton Cars and Caribbean Cruises. The firm prefers administrative accounts to large transactional clients like the Abbey would be, although working with their sub-brands is not ruled out. The latter are more likely to be interested in a longer-term client, customer and strategic marketing approach than their larger brethren. This entails the development of a true partnership where all of the parties play a vital role.

In fact, he says, being a flea on the back of an elephant can sometimes be a good thing because you gain more business from the elephant’s clients and provide them with a longer-lasting partnership. While contact centres like Sitel may command and boast more turnover and capture the larger projects in comparison, they have one major flaw that is making them chase their tails. It’s almost like a syndrome, which Ede refers to as the “Churn and Burn cycle.” 

Part of the parcel is their perceived need to cut costs for themselves, rather than to provide a good customer experience.  He refers to them as being so unfriendly to the customer, whether they are working within the mobile phone sector or whatever, with an inflexible approach to Service Level Agreements, which often provides the customer with only about 2 minutes before he or she is cut off (whether or not his or her enquiry has been answered). Ede argues that this and the poor use of technology, particularly CRM and IVR systems, is giving the call centre industry a bad name. The outsourcing of call centres to India, although welcomed as competition, is seen as another blotch on the industry’s reputation.

The large volume call and contact centres may beg to differ with his opinions. Yet keeping existing customers and the correct implementation of information technology is a far cheaper bet than the alternatives. A sole focus on an existing customer-base is, however, not always a good idea. Ede rightly says that Churn is not necessary in most cases, because you can profit by developing rapport with both your clients and their customers. So since it started business in 1994 as Call Back UK Ltd and became the Ion Group in the year 2000, it has adopted a long-term strategy. This focuses predominantly on both customer acquisition and retention.  The firm also handles a small amount of customer service enquiries.

The benefits of this strategy, which takes care of the needs of both dealers and clients within the automotive sector (70% of the Ion Group’s clients fall within this sector, much due to the knowledge and experience of Graham Ede) which are shown by their partnerships with their clients. For example: Audi has been a client since 1995, Land Rover has been a client of the Ops Room (which was acquired by the Moonriver Group in November 2002) for 14 years. Moonriver recently acquired and merged with the Ion Group. The Ion Group has also had a 5-year relationship with Nissan. Harley Davidson is another major client for whom the Ion Group provides a multiplicity of services outside of the US, and in a number of languages (the Group handles 70,000 of its club members). Fiat has recently joined the stable of clients.

In total the Ion Group works with 30 international companies, many of whom are provided with dedicated campaign teams. For those smaller clients who can’t afford such a dedicated service, call centre staff are cross-trained to help to reduce the human resources’ costs.

So successful are the inherent strategies that they have led to a 15% increase in personnel numbers over the last two years. The firm has relocated to larger premises too, “with the addition of a fulfilment arm” its website says, “in Isleworth to complement the main business in Twickenham.” The company has also published some interesting research into the industry containing a sample of 1000 companies in the banking, insurance, automotive, retail, hotel & leisure and travel sectors to show the current demand for contact centre services.

The key findings include:

• Outbound customer service calls ranked third most important contact centre service (6.62 out of a possible score of 10);
• Outbound sales/lead generation was ranked only as the sixth most important service (6.16);
• Email/web response handling was cited as the fourth most important service (6.55);
• Live call handling is the top priority (8.1);
• Automated call handling ranked seventh (4.96);
• Despite the recent publicity surrounding offshore services, respondents showed comparatively little interest with the total score of 2.71 out of 10.
  For further details please read: ‘Call centres focus on improving customer profitability, by the European Centre for Customer Strategies’

The company’s research, whether or not involving the above findings, has led to a new approach. One of the problems of being a niche player is that your customer or client-base can be very narrow and therefore more risky. The Ion Group nearly found itself at saturation point, so it looked at 5 vertical markets ranging from the I.T to the automotive sectors. This, he says, protects the group by providing a broader range of clients and allows the firm to escape from being pigeon-holed as only able to service outbound campaigns. Although the company aims to grow and prosper, it does not wish to become a giant. It currently seats about 200 plus agents, not reaching the scales of its larger competitors.

Ede stresses the need to keep an eye on the competition. His research revealed that customers are being poorly treated by many a call or contact centre. Subsequently, he allows his agents to chat with customers to provide a warmer experience of the service. This he hopes will overcome many of the usual objections that arise in call centres across the land, and the end result should be more sales by adding value to the customers’ experiences. Warm-calling is also preferred to its chillier counterpart. This all shows a clear difference in approach to the other contact centres who watch every second or minute that an agent talks to a customer, often leaving thoughts of good customers service out of the picture. SLAs are one thing, but happy customers are far more profitable in the long run.

Ede’s ultimate message and one that should become an industry motto is: “If it is not relevant to the customer, then don’t do it!” There is, for example, no point in encouraging a poor old lady to call unwittingly in for her Aries horoscope, and then sending her an £80 phone bill for the 10-20 minute experience. This only does harm to the reputation of the industry as a whole, as Ede rightly points out. So he welcomes legislation against bad practice, and thinks that ICSTIS should do more to combat it. However, he is also worried by the emergence of the Telephone Preference Service for business, which could stop businesses from communicating. Without the ability to communicate with potential customers, particularly other businesses, it could become impossible to find new clients.  A balance has to be struck between good practice, and the needs of each party involved in the sales’ process.

Lastly, he also fears that, while we talk so much about creating customer loyalty to our brands, the ‘burn and churn’ scenario and other factors are in fact creating, “an environment out there that isn’t loyal.” Ede believes, while insisting that firms can still create loyal customers by getting away from this negative syndrome, that loyalty has become a by-word of the 1960s. Indeed it is becoming harder to retain customers because there are so many companies, and particularly the banks, encouraging us to be disloyal as a direct result of their own promotional strategies, which are supposed to attract new business. Instead they encourage churn. Customers are also more savvy, and with more choice available to them they could easily move aside to welcome your competitors if you get things wrong.

As a result of their larger competitors’ mistakes, the Ion Group hopes to pick up where they left off. By differentiating itself and interacting in a professional and warmer manner with both its clients and their customers, the Ion Group has found itself a positive and potentially profitable way forward. Like Graham Ede says, much of what his company is doing is commonsense and basic strategic marketing. There are too many out there who still think the client rather than the customer is king. Surely, it’s time for a change in focus, more action and less of those platitudes about customer-centricity?

By Graham Jarvis, 13th September 2004
Editor@cimtech.org

Tel: +44 (0)776 682 3644

Recommended Further Reading

1. MOONRIVER GROUP ACQUIRES THE ION GROUP http://www.iongroup.co.uk/news.htm
2. Callback UK
http://www.callback-uk.com/ion.swf

3. Ion Group to handle Fiat Auto UK sales lead management, posted by Helen Lacey of Lindsell Marketing.
http://www.pressbox.co.uk/Detailed/17037.html

4. Call centres focus on improving customer profitability, by the European Centre for Customer Strategies.
http://www.eccs.uk.com/VD25/default.asp?PSID=10

5. Ion to provide Harley-Davidson with multilingual call centre – M2 Communications Ltd and the Gale Group
http://www.findarticles.com/p/articles/mi_m0ECZ/is_2003_Jan_27/ai_96912064

6. Ion Group and Europcar launch telephone concierge service for travellers
http://www.europcar.co.uk/insideeuropcar/pressrelease_details/e8698d7dd12ecaa2e768bb6a2f45ec84.html

7. 2002 Telemarketing League Table – Marketing Direct
http://www.mxdirect.co.uk/league/telemarketing_table.cfm

Republished with the kind permission of http://www.insightexec.com.