The UK Experience by Malcolm Morley *
Today Tesco is a phenomenally successful company. With a turnover in the year to 2003 at £28.6 billion, up 11.5 per cent and profit before tax up 14.7 per cent, it has expanded abroad into the rest of Europe and into Asia. It has diversified from its food retailing core into financial services and even mobile phone services. Its management is one of the most admired in any sector in the United Kingdom.
In the 1970s Tesco was considered to be a basket case. Its strategy had lost direction and it was losing sales to its competitors. Only with new leadership, coming for the first time from outside of the founding family, did the company start to change. The turning point came with the realisation that the company needed to change from concentrating upon the products that it sold to the needs of customers.
This realisation created a revolution in Tesco’s strategy, investment and product/service offering. Today Tesco is totally focused on its customers with each store having its own customer feedback group. Customer loyalty cards provide information about purchasing trends and point of sale information is linked directly to customer information systems.
This mass of information is collated at headquarters, situated on an industrial estate and not in a plush part of London, and shared throughout the organisation up to and including directors. The focus is absolutely clear – what do we have to do to meet the needs of the customer?
What has this got to do with Councils? In the UK, Councils have realised that they too have got to focus on the needs of customers rather than just their service provision. Increasingly they’re becoming passionate about customers, finding out what customers want and how they can organise themselves to add more value for customers.
My Council recently carried out a customer analysis which identified what its customers wanted from the ideal Council and then scored my Council against that ideal. This analysis identified some surprises. Some of the things that we thought were important weren’t important to the customer and some things we thought we were good at we weren’t perceived as being good at and vice versa. Consultation and user panels have become the norm.
All Councils have to undertake a standard nationally proscribed customer satisfaction survey every three years so that customer satisfaction with Councils can be compared nationally. Increasingly Central Government assessments of Council performance are giving more weight to customer satisfaction scores.
Many Councils in the UK are setting up Citizens Panels comprising 1,000 plus citizens reflecting the profile of the populations they serve. These panels are being used to get citizen’s views on policy proposals, to get views on priorities and to provide feedback on performance.
While Councils are in a different position to Tesco, they have discovered that they need to share Tesco’s passion about their customers, to find out what they want and how their performance is perceived. Councils are in the service business. They have had to recognise that reality is in the perception of the customer.
Councils in the UK are learning from the ‘Tesco Way’ and are getting passionate about customers and the services they provide for customers.
* Malcolm Morley is a Strategic Director of South Oxfordshire District Council. This is one of a series of articles he is writing covering trends in the United Kingdom. He may be contacted by email at Malcolm.Morley @southoxon.gov.uk
The views expressed in this article are not necessarily those of his employer.
