Customers

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Deposit guarantee company Deposit Power is now under external administration following the placement of Auckland-based CBL Insurance into interim liquidation.
External administrators from Chifley Advisory were appointed to the company.
Deposit Power offered deposit guarantee bond products, assisting Australian borrowers and investors to buy residential and commercial properties without the need to provide a cash deposit.
In a report by the Australian Financial Review, an estimated 10,000 residential, commercial, and property investors could be affected by the company’s collapse.
The deposit bonds are a form of bridging finance for up to 48 months for off the plan buyers.
Investors calling the Sydney office are met with a recorded message that the company is facing "external issues."
Deposit Power's bonds were sold to first time buyers.
Self managed super funds purchasing commercial or residential property are also using the deposits bonds. 
After the interim liquidation, insureds and beneficiaries under policies and surety and financial risk bonds are being urged to obtain advice from their insurance brokers to determine whether they need to purchase new insurance cover or secure additional or replacement bonds. 
A notice from the external administrators says CBL Insurance is “liable to pay any valid claims payable to any beneficiary of any guarantee issue by them”, and that all claims should be directed to CBL Insurance.
New Zealand’s High Court ordered CBL Insurance last month to be placed into interim liquidation following the Reserve Bank of New Zealand’s application.
Auckland-based insurance broker and building warranty provider Stamford Insurance said in a statement yesterday that it has stepped in to protect CBL Insurance clients. Stamford said it has secured Lloyd's of London’s help to protect buyers and homeowners.
It is not clear from the company's statement if its scheme to protect CBL Insurance clients will cover those in Australia as well.
“The underwriters in London responded immediately to our request and are committed to providing New Zealand homebuyers with the finest building warranties," said Stamford director Duncan Colebrook in the statement.
Stamford said its scheme will do the following:
<ol>
<li>For buyers who have signed a contract and paid a deposit where work has yet to start, Stamford will cover the risk that they may lose their deposit if their builder becomes insolvent.</li>
<li>If construction has already started, Stamford will guard against builder insolvency and provide 10 years’ defects cover on completion.</li>
<li>For homeowners who have taken possession of their homes within the past 12 months and who may have lost their protection against major defects arising with their home, Stamford will offer them a new 10 year policy.</li>
</ol>
Deposit Power’s external administrators said in the notice that an interested party may buy the company’s business, but that “the sale has its complications as the company was only an agent/authorised manager of CBL Insurance”.
“Given the nature of the company’s operation, any sale transaction will need to happen quickly, or it will not happen at all.”
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j.ballantyne1990-6AQqhLzZaK

Deposit Power collapse to affect 10,000 home buyers

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GUEST OBSERVER
Customers are good at troubleshooting the small stuff and research shows when they come to customer service staff they expect complex problem solving, options or answers - not apologies.
My research used video recordings of interactions between airline staff and customers to analyse the behaviour of both the staff and the passengers. I examined the non-verbal cues of the airline staff in more than 100 interactions and found that when they made effusive apologies it actually diminished their ability to be effective problem solvers.
Businesses have been trying to be better at customer service since it was invented. But unfortunately it seems like they aren’t making much progress.
A 2017 study showed that 62 million families in the US are estimated to report at least one service problem a year. This left 56% customers in a “rage” or extremely upset.
According to the same study, only 25% of the customers were able to resolve the service problem in one contact with the company. In fact, 19% reported having to contact the company more than seven times to resolve the problem. Despite this, 80% of the customers remained unhappy even after the resolution.
Cost of ineffective problem solving is estimated at US$313 billion in sales for US businesses alone.
But below par customer service is not unique to US businesses. One Ernst-Young survey showed that Australian consumers fare no better. 56% experienced unacceptably poor service in a 12-month period and 57% of those who complained were very or fairly dissatisfied with the way the problem was resolved. Also, 47% upset customers posted their complaint on social media but in 75% of the cases, the company didn’t respond.
The loss to Australian businesses from these problems: A$720 for every negative customer experience, and A$40 billion per year.
How customers are changing
Over time, the nature of customer’s problems have changed with the internet and social media.
Now customers prefer to solve simple and typical problems on their own using online resources provided by companies. My research shows they increasingly reach out to companies with complex, unexpected and urgent problems.
Customers are also now connected to a community of consumers who actively vocalise and report their service problems on social media. This community are increasingly aware and confident about the what (outcomes) and how (process) of problem solving.
A 2017 market research survey of consumers in North America, found that consumers actively and increasingly use a range of self-service channels including FAQs (60%), online community forums (38%), online virtual agents (37%), mobile apps (35%) and chatbots (32%). Many of these options did not exist just a few years ago.
According to this same report, intelligent assistants like Google Assistant, Apple’s Siri and Amazon’s Alexa will make it easier for customers to use self-service options.
Leading service organisations are developing and prototyping new artificial intelligence tools to respond to these trends. For instance, Vanguard, an investment advisor group, is piloting an artificial intelligence project to assist customer service staff answer questions and problems posed on inbound calls from customers.
Vanguard’s plan is to have customers engage directly with this bot and transition customer service staff to handle more complex activities.
What customer service providers should be doing
My research shows customer service staff should only empathise or apologise to customers in the first five to seven seconds before moving on to creative problem solving. We found customers view “small” talk in customer service interaction as a sign of ineffectiveness.
If customers are presented with options to solve their problem, my research shows, it gives them a sense of control over the difficult situation. In an experiment we conducted, customers were shown two scenarios, both of which were identical in nature. The problem involved a lost bag that contained materials and clothing for an important job interview.
The first scenario provided a single solution, while in the second scenario there were three reasonably comparable alternative solutions for the customer. At the end, the customer chose the same solution in both scenarios.
Our research found customers expressed greater satisfaction with the multiple choices of the second scenario. It’s the quality and quantity of the solutions given to customers that’s the crucial difference.
Yet in many companies, service agents are directed, trained and monitored only to connect with customers and make them feel comfortable. This training is intuitive, easier to script, amenable to supervisory monitoring and suitable for standardised training.
By contrast, creative and problem solving is not intuitive or easy to train. This is the challenge for service companies.
<img src="https://counter.theconversation.com/content/91646/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">Businesses must forgo the easy route to customer problem solving and take a more counter intuitive approach. By overcoming this challenge, business could see substantial payoffs and stem the financial losses that spring from bad customer experiences.
Jagdip Singh, Professor of Marketing, Case Western Reserve University
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/customer-service-staff-need-to-be-problem-solving-not-apologising-91646" target="_blank">original article</a>.
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Customer service staff need to be problem solving, not apologising: Jagdip Singh

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Employees have become an inevitable part of company image. But when employers make judgements and hire on the basis of attracting the “right” kind of people, they leave themselves open to charges of discrimination.
US clothing retailer Abercrombie &amp; Fitch found this out the hard way. It was recently ruled against in a long running court case brought by a young Muslim woman who was denied a job at the retailer because she wore a headscarf.
Abercrombie &amp; Fitch has since replaced its infamous “look policy” which banned caps and black clothing and sought people with a “preppy style”, with a new dress code it says allows customer service staff to be “more individualistic”. It has also changed its hiring practices to not consider attractiveness. Store staff, previously referred to as “models” by the company are now “brand representatives”.
Closer to home, fitness retailer Lorna Jane recently raised the ire of some Australians by advertising for a “Receptionist/Fit Model<a href="https://www.news.com.au/lifestyle/fashion/lorna-jane-receptionist-and-model-job-ad-includes-physical-measurements/story-fnjev30n-1227430876631">”</a>, outlining specific body size requirements. It later clarified that it had decided to combine a traditional back-office role with a front office one so that the successful applicant could “liaise directly with customers on a day-to-day basis, receive their feedback and allow Lorna Jane to deliver an even better product to benefit our customers and their active lifestyles”.
Beyond the ‘right attitude’
In a recent study we set out to find how customer perceptions were impacted by the appearance of customer service staff. We investigated the increasing importance of having employees with not only the “right” attitudes, but also “right look” and “right sound” in service encounters in the apparel retail sector.
The qualitative study included a sample of customers of leading Australian fashion retailers. Semi-structured interviews were conducted with 51 customers. Half of the sample were female and the average age of the customers was 29 (the youngest being 18 and the oldest 61).
‘Matching’ and ‘mirroring’ effects
We found customers tend to approach store staff that look similar to them. They also prefer to approach staff of their own age and same gender for help or ask questions associated with fashion. In some cases, customers whose English is not their first language also prefer staff who can speak their native language.
“I am an Asian, and it is quite clear that my friends and I do prefer to be served by someone from our country. Especially, for some of people, whom I know of, who are not comfortable with speaking English… Yes, this goes for both men and women.”
“As a Muslim woman, I would like to talk to a female staff rather than a male. I prefer to talk to someone who come from or look like they are from the same country as me. … Yet, I do not like to talk to a man.”
Customers are more inclined to “match” or “mirror” their age, gender, race and ethnicity with customer service staff in more involved buying situations than in simple and less risky occasions, such as trying to locate a product in store.
While not extensively investigated in the service encounter literature, the concept of “mirroring” has been established in many other domains such as psychology. As such, it is not a completely new idea. This “mirroring” impact has been explained in social identity theory as a person often puts greater value on “in-group” members who have shared characteristics.
Customers also use age and gender as a non-verbal cue in a “matching” process to decide if a staff member can offer trustworthy advice. In other words, customers attempt to “match” the age and/or gender of a frontline employee with their expectations of what a person with expertise should look like.
Many customers claim that the good appearance of the sales assistant and the managers helps them to hold back their anger in response to service failure at a certain level.
“I don’t know why, … . But I will try to hold my anger when I see a good looking sales assistant.”
“I will be more polite with an older person. … Yes, I will be less polite and straight forward to a younger person.”
They also admit that at some point in time they are willing to visit the store again because of the appearance of the customer service staff.
“My friend and I always come back to this section because of the sales person - he is very cute… Well, most of the time we just come to look for the guy… We sometimes buy clothes in that section too.”
“Yes, I used to go back to a shop just to see someone… But not anymore though, that when I was much younger.”
Gender in service encounters
Our study also found that many gay men would be happier to interact with another gay service employee. However, staff handsomeness did not impact on the gay customers’ decision to approach the staff for advice. Nevertheless, some gay men said they prefer to simply see rather than talk to good-looking staff.
“I only like looking at a cute guy… I guess I am just too shy to talk. But you know, this is part of window shopping… ha ha ha.”
“It does not matter if they are handsome or not. I find them the same.”
Some lesbian customers said the gender of the sales staff had minor to no impact on their decision to approach someone for advice.
“I am happy to get help from anyone … man, woman, lesbian or gay … I am happy with any of them. … At the same time, I am expecting them to treat everybody equally.”
“Personally, I would prefer to talk to women, but I also do not mind talking to men.”
In short, the visible diversity of staff influences customers in a service encounter and, depending on the purchase occasions, customers prefer to, for example, interact with older/younger or male/female staff. In general, having staff who share the same appearance as customers may deliver a competitive advantage to retailers.
Park Thaichon is assistant professor of marketing at S P Jain School of Global Management and can be contacted <a href="https://theconversation.com/profiles/park-thaichon-175182" target="_blank">here</a>.
Sara Quach is a PhD student at Swinburne University of Technology and can be contacted <a href="https://theconversation.com/profiles/sara-quach-175976" target="_blank">here</a>. Both are authors for The Conversation.
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