Virgin Money Company Profile - Case Study Example

Virgin Money Introduction Arguably one of the most successful and well-known conglomerates still operating today is the Virgin Group. For instance, it is known to own an entertainment company, responsible for releasing video games such as the adaptation of Disney's Hercules, as well as a record label, Virgin Records, which has been known to have been home to many of the biggest names in today's music industry. In fact, the conglomerate has even been known to have a brand of soda named after them. Needless to say, the Virgin Group's success can be seen in its omnipresence in the market. One of their more recent forays happened to be one into the financial industry, specifically in the form of Virgin Money plc which, at 17 years old, is still relatively new to this industry. Regardless, it was able to achieve a respectable level of success, if its global expansion in the turn of the millennium is anything to go by. Whatever complaints people might have about the level of customer service, Virgin Money plc must have at least halfway decent services if it has managed to go on operating for the past 17 years. That being said, the complaints clients have of Virgin Money's customer service are not to be discounted, and indeed carry a lot of weight. To say the least, the firm's level of service seems to have been getting mixed reactions from clients. Indeed, there are firsthand accounts on various forums and review sites on the internet that tell of the quality of Virgin Money's services, not all of which are flattering. This being the case, it may be worth examining the customer service management approach taken by Virgin Money. The paper shall first provide a brief, 2-page history of Virgin Money, before introducing the concept of customer relations management - sometimes called customer services management - and how it applies to this firm. An explanation on the group's findings on the matter comes next, as well as on the methods used to obtain data. Rounding the study off is the conclusion, which includes recommendations as to how Virgin Money can improve on its customer service. Virgin Money - Company Profile Virgin Money was established as Virgin Direct by Richard Branson in 1995, and has always been owned by the Virgin Group. Based in the UK, this company deals primarily in banking and other financial services, and has been known as a pioneer of index tracking in its introduction of Personal Equity Plans at relatively affordable prices. Since it expanded its services worldwide early on in the past decade, the company went on to achieve even greater levels of success (BBC News, 2011). As with all companies, Virgin Money had tender beginnings of its own, having first been launched in partnership with Norwich Union in 1995 as Virgin Direct Personal Financial Services (Ringshaw, 2001). The year 1997 saw it begin to offer PEPs and launch Virgin One together with the Royal Bank of Scotland, with Australian company AMP buying Norwich Union's 50% stake in Virgin Direct later on in the year. RBS, too, would buy out Virgin's stake in Virgin Direct, before its merger with virginmoney.com in 2002 created Virgin Money as it is known today. The past decade also saw Virgin Money experience various victories and losses. For instance, it managed to expand its services around the world, with the Virgin Group reacquiring the entire company in 2004 (Birmingham Post, 2004). It also made a bid to acquire the Northern Rock bank a little later; while this bid would ultimately end in failure, they remained undeterred, as demonstrated by their application for a full banking license in 2009 (Aldrick, 2009). Things would get even better for Virgin when, just a year later, they were able to acquire their own private bank in Church House Trust. Various changes also occurred in terms of the company roster during this time. For instance, former advisor Brian Pitman became company chairman, only to be replaced by David Clementi upon his death (Dixon, 2010). And in addition, WL Ross & Co. LLC also threw its lot behind Virgin Money, which led to Vice Chairman James Lockhart joining the company board (Virgin Money, 2010). Things would then come full circle for the entire company as a whole the next year, where it finally succeeded in its acquisition of Northern Rock plc. As noted above, Virgin Money has already had its own share of high and low points despite being a relative newcomer to the industry. Even today, despite the aspersions cast by disgruntled clients on the quality of its customer service, it remains relatively profitable and prosperous. Despite its continued success in the face of mixed feedback regarding its customer service is no reason for Virgin Money to become complacent. On the contrary, this should serve as even greater motivation on the part of the company to assess itself and take a look at what needs to be improved. Customer Relationship Management, Call Centers and CSRs Virgin Money has been able to remain a contender in the market despite its own flaws and imperfections. Were it to make an objective assessment of itself, and then act accordingly, it would be able to attain even greater levels of success. And considering how one of their weaknesses as agreed upon by their clients is the quality of their customer service, it would definitely in the company's best interest to work on its problems in this area. Customer service is, after all, one of the most important aspects of customer relationship management, which lends great importance to the need for Virgin Money's executives and officials to exercise it well. The model of customer relationship management, or CRM for short, is aimed at facilitating better management of a company's interactions with its customers and clients. It achieves this goal through the optimization of the technology at the company's disposal, in order to achieve the organization, automation and synchronization of business processes. Thus, the focus lies primarily on sales activities, followed by marketing, technical support and customer service (Shaw, 1991). Of these, arguably the one that has the greatest impact, for better or worse, is customer service. Because CRM is aimed primarily at attracting new customers while retaining current ones and winning back those from before, it stands to reason that the company needs to be perceived by its customers as genuinely interested in meeting their needs and addressing their concerns (Gartner, Inc, 2009). A company whose customer service representatives are seen as apathetic or callous is said to have bad customer service, which hurts its image and ultimately costs it its customers. Therefore, there is a real need for companies to ensure the consistent quality of their customer service. High quality of customer service speaks well of the company as a whole; on the other hand, poor customer service tends to drive away clients. Nowadays, the term 'customer service' has all but become synonymous with call centers. At its simplest, a call center is a centralized office is geared towards the reception or accommodation of a large number of requests at any given time. Inbound call centers are the ones normally associated with technical support or customer support. Agents working at these call centers are generally asked to take calls from clients seeking clarification, troubleshooting or other similar forms of assistance (Freeman and Whitfield, 1996). The staff working in the customer service divisions of these call centers, also known as customer service representatives (CSRs), are often arranged into different tiers. Those belonging to the first tier tend to serve as operators who dispense only the most general information, while those at the lower tiers provide more specific and/or specialized advice relating to the caller's query. Because of the nature of these call centers and the CSRs working there, call centers in general have been the subject of much criticism, from the point of view of the callers as well as the CSRs themselves. For instance, among the most frequent criticisms of callers is that CSRs seem to be speaking from a script, and at times seem to lack the knowledge or capability to effectively address their concerns. Automated queuing systems coupled with long waiting times are also another pet peeve, as is the fact that callers are often asked by CSRs to repeat the same piece of information more than once (PRLog, 2010). Meanwhile, CSRs allege that their physical and psychological health is being sacrificed excessively in favor of performance and efficiency, thanks in part to the verbal abuse and unrealistic expectations some of their clients seem to have of them (Wallace, Eagleson and Waldersee, 2000; Belt et al, 2000; Dollard et al, 2003). Methodology Given what has been said about call centers and customer service representatives in light of customer relationships management, the main question to be answered by this study pertains to the main flaws identified by customers with respect to the CSRs associated with Virgin Money. As such, it was necessary to require prospective respondents to have called Virgin Money's customer service hotline at least once in the past 5 years. Purposive sampling was used in the selection of respondents. This sampling method simply means that not everyone will have an equal chance of being selected for the study. Instead, they will be selected based on whether they fulfill certain requirements as befitting the study. For this particular interview, the respondents were selected based on two requirements. First was that they needed to give their explicit consent to participate in this study, in accordance with ethical standards the researchers were asked to follow. Secondly, and as already noted, these interviewees were required to have called Virgin Money's customer service hotline at least once in the past 5 years. Through the use of the purposive sampling method, a total of 15 interviewees was selected for the study. Data Analysis The first question asked of the interviewees concerned on how many times they utilized Virgin Money's customer service. The results showed that most of them - a total of 8 - relied on the customer service hotline five times or less. This was followed by three times or less, which was the answer of 5 of the respondents. Finally, there were 2 of them who answered that they have utilized Virgin Money's customer service hotline only once or twice before. Most of these respondents also said that they preferred to air out their concerns by emailing the contact address found on the official website, as they felt that they would be able to get more helpful answers more quickly from the persons handling Virgin Money's email account, as compared to those running the customer service hotlines. The respondents were then asked if they intended to call Virgin Money's customer service hotline in the future, and to explain their answer. For this question, their reactions were a little more interesting, if not quite as varied. Majority of them - 10 out of 15 - answered yes, as needed, while 3 more said that they would if and only if they absolutely had to. Finally, 2 of the respondents answered in no uncertain terms that no, they never wanted to deal with what they called Virgin Money's 'bloody awful' CSRs. One of the interviewees in particular stood out when he described the CSRs, not to mention the outsourcing industry as a whole, as being comprised of 'a bunch of incompetent nitwits'. Next was question #3, which asked the respondents what they felt was the biggest strength or asset possessed by Virgin Money CSRs as a whole. With regard to this question, an overwhelming 14 of the respondents were in agreement that, in spite of their flaws, the CSRs were very much inclined to assist them in their queries, albeit not always perfectly. These respondents attested that it helped a lot that the CSRs were at least ready and willing to assist however they could, even if the actual help they managed to provide turned out to be rather limited. The last one, however, refused to answer this question, and requested to skip to the next. When asked why, he said simply that 'I really can't think of anything they did right when addressing my query'. The fourth question, meanwhile, asked the respondents what they felt was the greatest weakness possessed by the CSRs. For this question, the responses were much more varied, often even shared by 2 or more of the respondents. For instance, they complained of being asked to repeat their queries more than once. Another mentioned that it was as if the CSRs did not understand what they were saying. Yet another complained that it was rare for callers to be put through to a CSR who had the knowledge and expertise necessary to help them out. There was even one dissatisfied respondent noted that the quality of their English left much to be desired. At the same time, however, this respondent did concede that most of the CSRs he had encountered were from countries where English did not seem to be the primary language. There was also a respondent who mentioned the automated queuing system and how it made him stay on the line for 30 minutes, only for the line to get cut. One respondent pointed out, however, that it is not so much Virgin Money's fault as it is that of the call centers. 'Citibank,' he said, 'has never been noted for the quality of service of its call centers. The fifth and final question asked the respondents for suggestions as to how Virgin Money's CSRs could improve. Most agreed was that the automated queuing system needed to be done away with, as it was, as one so colorfully put it, 'a major, major inconvenience for all parties involved'. Others said that they did not appreciate being asked to repeat their queries over and over - another standard operating procedure among call centers they said needed to go. Yet another respondent stated that these CSRs would do well to work on the quality of their English, especially where grammar, pronunciation and accent were concerned. Finally, the last respondent noted that the online support was much better, saying that 'at least the ones handling that one actually know what they're talking about'. Recommendations, Conclusion From what has been said, it would appear that Virgin Money's customer service leaves much to be desired. At the same time, though, it should be noted that most of these complaints were not directed at Virgin Money's CSRs in particular, but at the outsourcing industry as a whole. Most of these call centers happen to be located in countries where English is a secondary language; as a result, CSRs and callers cannot always understand together. This being the case, the recommendations of the researchers are as follows. First and foremost, it would be prudent for Virgin Money to invest more in the training of its CSRs, especially with respect to the development of their skills in spoken English. Possibly one of the biggest complaints about the English spoken by CSRs is that most of them have accents. This tends to serve as a barrier to effective communication, especially in light of the fact that most people who contact these customer service hotlines come from countries such as Australia, England and the United States, all of which have English as their primary and sometimes only language. Thus, it would definitely be worthwhile for Virgin Money to train its CSRs better. Secondly, it may also help for Virgin Money to develop its online customer support system. As noted above, there were respondents who stated the advantage online support had when it came to effectiveness, pointing out that accent and pronunciation were of no issue there. Lastly, it was suggested that the company also establish instant messaging customer support, which would allow for the resolution of queries in real-time. Because both customer support hotlines and emails have variable waiting times associated with them, instant messaging would be a better choice for those who needed immediate assistance. Again, most of Virgin Money's problems with respect to customer service are not entirely its own fault, instead pertaining to the flaws inherent to the outsourcing industry where its CSRs operate. However, even this is not a perfect excuse, as these CSRs comprise only one of the many options for providing customer support. Thus, Virgin Money would do well to make multiple options available to their clients, who could then choose according to their preferences. References - Online: Aldrick, P., 2009. "Sir Richard Benson to launch 'Virgin Bank'" [online] available at < http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6418584/Sir-Richard-Branson-to-launch-Virgin-Bank.html> [Accessed 7 December 2012] BBC News, 2011. "Northern Rock sale announced by chancellor" [online] available at < http://www.bbc.co.uk/news/business-15769886> [Accessed 7 December 2012] Birmingham Post, 2004. "HHG back in black at half-way" [online] available at [Accessed 7 December 2012] Dixon, L., 2010. "Sir Brian courted to chair Virgin Money" [online] available at [Accessed 11 November 2012] Freeman, L. M. and Whitfield, H. C., 1996. "Setting up for integrated inbound/outbound telemarketing" [online] available at < http://findarticles.com/p/articles/mi_qa3700/is_199611/ai_n8743570> [Accessed 7 December 2012] Gartner, Inc, 2009. "What's Hot in CRM Applications in 2009" [online] available at < http://www.gartner.com/DisplayDocument?&id=1004212> [Accessed 7 December 2012] PRLog, 2010. "Call Center - Criticisms of a Call Center" [online] available at < http://www.prlog.org/10640701-call-center-criticisms-of-call-center.html> [Accessed 7 December 2012] Ringshaw, G., 2001. "Virgin and AMP clash over joint ventures" [online] available at < http://www.telegraph.co.uk/finance/4477378/Virgin-and-AMP-clash-over-joint-ventures.html> [Accessed 7 December 2012] Virgin Money, 2010. "WL Ross & Co makes strategic investment in Virgin Money" [online] available at [Accessed 7 December 2012] References - Printed: Belt, V., Richardson, R. and Webster, J., 2000. Women work in the new economy: The case of telephone call centers. Information, Communication and Society, 3(3), 367-385. Dollard, M. F., Dormann, C., Boyd, C. M., Winefield, H. R., & Winefield, A. H., 2003. Unique aspects of stress in human service work. 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