Welcome to Royal Mail

1. Welcome to Royal Mail Delivering Excellence in Consumer Customer Services Paul Roberts Head of Consumer Modernisation

2. What We’ll Cover • Royal Mail in brief • UK Postal Market • What this means for Consumers • Consumers driving the way Royal Mail Customer Services works • Customer Services input to wider RM service improvements

3. Quick Quiz to start How many mail items delivered in UK each day? To how many addresses? What does this sign mean? How long has competition been in place in the UK postal market? What proportion of the mail handled by Royal Mail is consumer to consumer? How many places can consumers collect undelivered mail from?

4. Royal Mail Group Ltd • Been going over 360 years! • Three main brands – Royal Mail Letters, Parcelforce and Post Office Ltd • Profit & Loss businesses • 14000 Post Offices • 1400 Royal Mail Delivery Offices • Deliver 68 million letters a day average • To over 28 million households • Now in a competitive letters market • In a challenging environment – modernising fast, but need ever more pace to …..

5. The UK Postal Market • Letter Mail volume contracting by close to 10% year on year (e-substitution is a major factor) – major shift from letters to packets and parcels • Royal Mail still manages consumer-consumer mail, unless consumers choose to post items with other carriers (non-existent in standard mail, small scale in valued/ larger items) • Business to consumer competition growing rapidly • Business customers hugely price sensitive • Royal Mail still delivers last mile except for certain items (mostly courier or bulk items) – maintains the ‘universal service obligation’ • Becoming confusing for consumers…….. service a key differentiator – especially where something has not gone as planned • Key is to manage and exceed expectations.

6. Facts & Figures • c.1800 employees operating from 12 main sites • Significant consolidation and efficiency over last 8 years – was 3500 employees with 70 sites • Most RM Group customer service provision now done by one ‘Unit’ • Handling c.50m contacts pa, mixture of telephone, letters and email (71m including all related website hits). Inbound and outbound. • Total contacts increased by 73% over last 4 years • RMCS receives on average 30k+ calls, 300 letters, 1000 e-mails, 1500 claim forms and 5-7k redirection applications/ renewal requests per day • RM complaints reduced from 1.8m in 04/05 to 1.3m in 09/10 • Contextually, we receive 1 complaint per household every 20yrs • Changing traffic mix and ‘wholesale vs. retail’ is altering our customer service landscape as well - high proportion of consumer contact is from consumers who don’t have ‘supplier & paying customer’ relationship (mail recipients).

7. Our core work Service for Consumers • Provides multi-media help, complaint and enquiry services • Campaigns include: RMCS, Parcelforce, Post Office Network Branches, PO External Helpline, Postcodes, Redirections, OFCOM, Inbound Sales plus many more…. Service for Business • Deals with our Business Customers – all levels of spend • Includes indoor and outdoor work, plus ancillary things like revenue capture, billing etc. Address Management • Responsible for development and maintenance of Postcode Address File (PAF) Also provide other services, such as customer service communications & web support for customers (across B2C and B2B)

8. Changing the RM Customer Services Approach • RMCS is traditionally a phone (and letter) based service operation. Mostly done with person-person contact, irrespective of simplicity/complexity of customer request • Previously based on the internal processes we operate • Consumers increasingly demanding mixture of channels and ways to access services, with flexible times, interaction types and responses • Now changing the way we provide telephony and web services for customers on an ongoing basis – transforming the business and keeping it up-to-date. Example - on telephony, IVR a good tool if used properly – needs to work in tandem with more sophisticated technology • Modernisation is a core programme of work right now, with a significant change of focus - ‘why do customers contact us’ - and aligning service channels/ emphasis to those demands

9. Demand Types • Service approach revolves around the main reasons consumers contact RM – demand types • 5 key themes : get information/ advice, buy/ get a service, monitor progress on the service, help when something needs fixing, serious issues • Identification of what we need to do for the customer, outcomes to be achieved for each demand type and identification of best ways of delivering outcomes, including mix of technology and live agents • This means that we are able to offer customers a variety of access channels that enables them, where appropriate, to use technology to access our services, where and when they want to • Our people are the most important element in demonstrating added consumer value so…. live agents now focused on delivering help for consumers where they need it most. • Much ‘mindset’ coaching and development work to ensure this works really well for our customers

10. Example demand type detail - I want some information What will happen: Customer receives a suite of options via self serve channels (web or telephony). These options are based on the top questions customers contact us with. For additional information, customers directed to Post Office outlets. Option of click/ press here to find your nearest Post Office and Delivery Office outlet. Outcome: Customer exits channel with information they need, or with a clear understanding of where they can go to get it.

11. Example demand type detail - I want to report fraud/theft/criminal activity What will happen: immediate live agent response supported by alert mechanism (report fraud button on web/ email/ text alert) - establish the customer issue • where urgent response not required – explanation of what this channel is for and customer quickly re-routed back through system • where need is established - capture data - explain next steps - take immediate action with relevant personnel Outcome: Customer leaves channel knowing immediate action being taken and what will happen next

12. What are the main modernisation activities? The programme consists of 4 key strands of work: • Telephony – better and wider use of IVR & full automation of key consumer demands • Increased Web Self-Serve • Process Revisions – making them lean and integrating activity • Resource & Site Optimisation

13. Automating our Telephony • Report a fault - Automating the 1st reporting of service faults – customer confirmation & data collection/ action. A big shift for RM consumers (and our people) – from complaint to fault • My Delivery Office - Automated option for customers that works exactly like the “your nearest post office”. • Redelivery - Collecting the redelivery information, interfacing with the our messaging system and generating a redelivery request within the relevant operational delivery office. Includes any customers who need to pay fees or surcharges • Redirection Renewals - Customers using an automated telephone transaction and payment service to renew their redirection. • Redirection Applications - Automating approx 80% of the customer call to set up a redirection. Customers then routed to advisors with computer screen ‘pop-ups’ to enable collection of the relevant customer names. Adherence to security requirements key. • Keepsafe - Automating the Keepsafe application process, enabling customers to give address details, dates and make payments over the phone.

14. Web Self-serve • Knowledge base (Ask Sarah) – putting effective ‘decision tree’ technology into the kbase to ensure customers questions are answered more effectively and are better routed (where necessary) to the ‘right answers’ on the RM Web. • Contact Us/ E-mail handling - Reviewing the “contact us” pages of our website to align to our customer demand types, and introduce decision tree technology to help inform customers (and subsequently reduce e-mail traffic) • Redirections - Revamp of our online redirections customer journey and functionality. • eP58 - Provision of a web-based claim process for customers, which integrates with CRM system to speed up customer reduce processing workload.

15. Using Customer Services to drive wider application of B2C service across RM • Most of the feedback on RM service standards (as well as product performance) is channelled through Customer Services • Customer Services gather fault data, web-based inputs and ‘voice for the customer’ feedback to drive service improvement. • Everyone who works for RM is also a consumer of the company, so can really input to improving things. We gather and use inputs from employees as well as customers. • Customer Services and RM Operational regions work together to focus on specific themes and topics. • Drives ‘standard operating procedures’ and also attitude-based training and development • Also informing some fundamental shifts in the way services are provided to consumers – now trialling evening deliveries to assess impact (potential benefit to receiving consumers and posting businesses) • Part of our engagement with business customers is based on consumer feedback we receive - we use this as part of our B2B service model to help manage key business customer demands.

16. Many thanks for Listening!

17. Questions (and hopefully answers!)

18. Pam Andrew, Customer Service Manager Empowering People to Deliver Service ExcellenceB2B

19. Agenda • Company background • Challenges facing our industry & our customers – B2B • The story so far • Lessons learnt • Staff reaction • Results • Next steps • Questions

20. Our History 1990 1998 2000-2003 2002 2008 1990 National Power Created Npower brand launched Market Competition For SME & Consumer De-merger Innogy Created Supply Companies Acquired Acquired By RWE Consolidation of RWE Group UK

21. Who are npower . . . • Part of the RWE Group- our group operates power plants from construction, commissioning, operations and maintenance • RWE npower– we supply more than 10% of the UK’s energy making us one of the UK’s largest gas and electricity suppliers’ (supplying over 6m residential and 350k business customers). • Our People – It takes over 11,500 people across 60 UK sites to carry out all our activities. • Community Work- we have been awarded with the prestigious CommunityMark award from Business in the Community. • Education- we have won awards for our education programmes, including free educational guided tours of our power stations. • Charities-we support many charities and match our staff’s fundraising £4£. Our corporate charity partner is Macmillan Cancer Support. • Sponsorship- we sponsor various sporting activities such as The npower Football League, Worcester Wolves Basketball, Worcester RFC and the npower Test and Ashes Series.

23. Our Service Challenge – The Media & Competitors

24. Changing Wholesale Cost Wholesale gas prices

25. Our Service Challenge – “Credit Crunch” • Increase in Insolvencies • Increasing Fuel prices • Internal debt pressures • Customer behaviour changes

26. Our Service Challenge – Government &Regulation • SMART Meters • Carbon Policies/Levys • Industry process changes • CCL/VAT rate changes

27. Our Service challenge – Third Parties • Increasing number of energy brokers • Many 3rd Parties involved in Meter Reading and other site visits • Industry partners/responsibilities are not always clear

28. A Service Transformation Journey

29. Our Starting Position • Fully blended workforce • 90% of calls answered in 20 seconds • < 1% abandonment rate • 93% of queries resolved within “Commit Time” • High baseline service levels • Inadequate “First Contact Resolution” • High “Referrals” & “Hand-offs” • Low Confidence in “Setting Expectations” • High degree of rework across departments • Customer Perception Poor

30. Our Starting Position • High baseline service levels • Inadequate “First Contact Resolution” • High “Referrals” & “Hand-offs” • Low Confidence in “Setting Expectations” • High degree of rework across departments • Customer Perception Poor • Only 20% of Correspondence dealt with at FCR • CSAT shows only 56% FCR for calls (internal measures show 80%+)

31. Our Starting Position • High baseline service levels • Inadequate “First Contact Resolution” • High “Referrals” & “Hand-offs” • Low Confidence in “Setting Expectations” • High degree of rework across departments • Customer Perception Poor • Significant number of hand-off points • 12% of calls transferred to other departments • 33% of customers on hold whilst referrals made to other departments

32. Our Starting Position • Front line not believing “Commit Times” • Multi-skilled fuels - 33% • Call Handling Guidelines “tick box” exercise • High baseline service levels • Inadequate “First Contact Resolution” • High “Referrals” & “Hand-offs” • Low Confidence in “Setting Expectations” • High degree of rework across departments • Customer Perception Poor

33. Our Starting Position • Many processes split over 2+ teams • Policies & processes out of date • Back office view of control in house rather than empower • High baseline service levels • Inadequate “First Contact Resolution” • High “Referrals” & “Hand-offs” • Low Confidence in “Setting Expectations” • High degree of rework across departments • Customer Perception Poor

34. Our Starting Position • High baseline service levels • Inadequate “First Contact Resolution” • High “Referrals” & “Hand-offs” • Low Confidence in “Setting Expectations” • High degree of rework across departments • Customer Perception Poor • Bottom of many CSat tables • Relied upon external irregular surveys for feedback

35. Operational Effectiveness - Building Blocks Empower as close to the front line as possible Operational Effectiveness Added Value Customer Experience Sales Through Service In-sourcing Energy Services Lead Generation Segmented Service Quality End-End Process Re-engineering Manage Inputs & Outputs Balanced Scorecards Business Tensions (Healthy!) SLAs with Suppliers Training Understand Re-work Volumes – Control Understanding Peaks & Troughs Working within Service Standards Accurate Forecasting Targets & Incentives Zero Backlogs Work Blending

36. Objectives to achieve Features of Future State • Optimal FCR resolution: • 80% • Minimal handoff points: • 5% transfer • 15% referral • Evolving feedback and training culture • Clear career paths • High levels of job enrichment • Optimal process/activity at front end: • Economies of scale • Increased CSAT • Increased staff morale /reduced churn • Meet business plan OpEx/efficiency targets • Elimination of re-work • Elimination of process steps • Increase CSAT & SSAT • Reduce staff churn • Raise general standards of performance • Understand Optimal FCR

37. The DRIVE Approach Sign off & Communicate Sign off & Communicate PHASE 1 PHASE 2 PHASE 3 Define Review Improve Verify Embed 1 Day Event 2 Day Event • Train, Implement & Support Changes • Tweak If Required • Track Against New Standard, Verify And Act Accordingly. • Agree Potential Post Phase Improvement • Evaluate Delivery & Benefits against Scope/Forecast • Document And Share Lessons Learned 3-4 Weeks Trial • Define And Sign • Off Detailed Scope “Problem Statement” • Conduct SIPOC • Gather Voc • Identify Critical Customer Requirements • Conduct As Is MAP and highlight Opportunities • Review Supporting Data • Prioritise Opportunities • Agree Improvement Objectives • Identify Future State Requirements • Develop Future State Process Map • Create Improvement Plans • Document Standards/ Local Working Practices Sign off & Communicate Handover to BAU Sign off & Communicate Usually 6-8 weeks

38. Model Office: Change Implementation Process Small Changes Continuous Improvement Model Office 6-10 individuals to pilot and test the changes Identified Process Review Weekly review to discuss progress and identify issues to be investigated Training & Development Full documented training plan to be rolled out in the area Process Go-Live Process change fully implemented within the business area Identify changes to be implemented into the business area CI “Event” Process Change Behaviour Change 4 Weeks Timescales agreed on each change with Training & Operational Managers Culture Change Amend Process 2010+ Q2 2009 Overall programme timescale (each phase to use the above process)

39. Measurements Call Centre: • Quality • Handling time • FCR & Resolved within C/Centre • Top 10 Query areas (inc movement) • Call referrals • Call transfers • CSAT Correspondence: • Quality • FCR & Resolved within C/Centre • Contacts resulting in EoDs • Top 10 Query areas (inc movement) • Overall query duration • Outstanding correspondence (> 10 w/days) • Handling time General: • Tracked by volumes, percentages & FTE (OpEx) impact • Review trends and link to Root Cause projects • Track impact on Cash at Point of Contact , DD conversion & Sales Leads/Conversions

40. Road Map: Activity So Far Q2 2009 Q4 2010 Adhoc Tactical changes Model Office No1 set up Internal Training Options reviewed Roll out training Model Office No2 set up Module 3 CI Event Visit to Resi colleagues Model office for Module 3 Quality score revised Module 1 CI Event Module 2 CI Event Training option2 Reviewed Quality Buzz Sessions Feedback Received Training option1 Reviewed Review Problem & Opps o/s Manual CSAT Reviewed Call Handling Internal data analysis Revised new starter pack Engagement Training Created Engagement Training pilot CSAT analysis Roll out training Engagement Training roll out External call data analysis Adviser Scorecard revised Linked with CI teams Lesson Learnt! Stakeholder engagement / Communications

41. Learns learnt so far Measures/Planning: • Have key measures in place for ‘As Is’ activity before trialling new process • Agree measures of each module and have reporting in place prior start • Trackers across each dept have different timings (understand why) • Have high level project plan in place before start and as detail asap Support: • Clearly understand the role of each support activity before project start • Have Training Team and Reporting Team reps from the beginning Changes: • Implementation plan needs to be very detailed for step by step approach • Document all changes including procedures as early as possible • Ensure Policy Document changes and timelines are in line • Agree a sign off process between departments before changes implemented • Train Team Managers well before roll out to advisers

42. Results …. so far

43. It feels like we’re giving proper service now, it’s so much better Bring on the next change! I enjoy my job so much more now It (the job) is so much more exciting now I was very sceptical at first that we’d be listened to, but it’s been great I thought I was ready for a change (in role) but this has made me realise there’s so much more we can do It was great to be asked to try things rather than told ‘just do it’ I didn’t realise how complicated it was (about other teams activities) people

44. Contact Centre Model Office • Change to call opening (flow) • Provide customers with query references • Enabled customers to control start of the call Front Line Resolution • Timeline of refunds getting to customers improved by 48 hours • Credit transfer queries Credit transfers 25% to 83% on frontline • Copy bills 0% to 90% whilst customer on the phone Q2 2009 Q4 2009 Q4 2010 Q2 2010

45. Correspondence Module • Increased first contact resolution includes: • J Raise refund query 0% to 61% • Re-bill account following customer’s reading 27% to 82% • Set up payment arrangement 2% to 67% • Credit transfer query 0% to 95%

46. Status against Objectives

47. A customer called and wanted to praise us, she changes supplier every year as she has found that is the best way to get the best possible prices but Npower has been by far the best for customer service and if she had to choose a supplier on customer service alone Npower would be the clear winner. How nice to hear. Paula Gwynne After having sorted out several queries on both of Mr Bob Home's accounts he said Garry was a gentleman and a scholar and wished all people he dealt with on the phone where as nice as him. Julie A Mr Robinson called to speak to Danny Butler. He asked me to pass a Thank you over to Danny for sending him a letter out while they were speaking on the phone. He was very grateful. Amanda Cable. I have just received positive feedback from a customer who said that Kristina Hall's customer service was outstanding, she was very polite and friendly and thinks that she is doing a great job and to keep it up. Carlie A customer called and wanted to say thanks to Christine Doughty for rebilling his account immediately, he has had numerous problems with his bills and just wanted to show his appreciation & say thanks to Chris.

48. Next steps • Customer Engagement Training Roll out to ‘back office’ • Module 4 in progress relating to Sales & Retention activity • Repeat feedback loops with advisers • Review results of our FCR measure • Receive feedback on new advisers’ Scorecards • Benchmark measurements & best practice with other contact centres • Continually feed future CapEx requirements

49. Thank you for listeningAny questions?

50. news from the institute National Customer Service Week 2010 - 1600 registrations Customer Champion Competition - over 300 nominations from a whole range of different organisations.  North East regional winner Paula Rickwood from Sheffield Teaching Hospitals NHS Foundation Trust Research – ROI, social media UK Customer Satisfaction Awards – 11 categories, plus 4 people’s choice winners - judged by a panel of industry experts. Winners announced on March 22nd 2011 at the London Marriot Grosvenor Square Hotel.