BENCHMARK NEWSLETTER - QUARTER 2 - MAY 2009
Client Retention...what you need to know!
Your business would be lost without its customers – whether these are consumers or other businesses. Winning new customers is the route to business growth but, even in times of economic prosperity, it is unwise to take regular customers for granted by focusing too much on pursuing new ones.
Paul Cooper, strategy director at the Institute of Customer Service says: ‘It actually costs more to recruit new customers, up to ten times as much, than it does to retain to those you already have. In their efforts to win new customers, companies run the risk of becoming complacent about their existing ones. If they sense that standards of customer service have fallen they will go elsewhere, and at a time when businesses are finding it difficult, they cannot afford to lose customer loyalty.
Don’t let your customers down
For the same reason, companies must avoid knee jerk cost-cutting actions that could impact on service quality and damage relationships with customers. Instead, they should be taking steps to safeguard and strengthen their customer relationships; in the current climate it is more important than ever to listen to customers to try to understand and meet their expectations. Two of the biggest mistakes that businesses make when the economy is in turmoil is cutting staff and cutting training budgets. Reducing numbers of staff at key points of customer contact that drive satisfaction levels and repeat business can be particularly damaging.
‘Customers are loyal to people, and where possible they like to deal with the same individuals. If those familiar faces disappear because the company is downsizing, their customers may do the same,’ says Cooper. ‘Reducing headcount also results in a smaller workforce that is less able to deliver the standards of service that their customers have come to expect.’
A workforce that is properly trained in customer service can play a crucial role in helping businesses survive the difficult months ahead. This does not necessarily have to mean extensive formal classroom training, as customer service skills can be developed through in-house mentoring and coaching by experienced and senior staff members. This way, the ethos of customer retention can be extended to every member of staff, not just the customer service team, making customers feel more inclined to stay loyal to the organisation.
This is all well and good for those businesses that interact directly with their customers and can build strong personal relationships. For companies whose customer relationships are more indirect, selling large volumes of products to thousands of people customer loyalty is that much harder to secure. Here, factors such as price point, value for money, and brand perception become crucial to keeping fickle customers buying their goods.
High Impact, Low Cost
Where companies are compelled to explore new markets and attract new consumer spend, there are cost effective ways of marketing. A surprising number could be making better use of their websites, through content and ease of customer interaction, and also in terms of search engine listings. ‘Take a look at what the market leaders are doing with their websites to make them look good, easy to access and attractive to customers. Then apply the key features to your own,’ advises Cooper.
Whether customers are new, or those that have remained loyal for many years, the key to effective customer management lies in assessing their level of satisfaction with the service they receive , by using customer satisfaction surveys and mystery shoppers. Some of the large retail organisations, for example John Lewis, send members of staff out to visit other stores within the group where they can go unrecognised as a type of mystery shopper. But even owners of small businesses that may be operating from just a single site or outlet can benefit this type of feedback, by getting together with other small business owners in the area and making on-spec visits to each other’s companies and proving feedback.
Communicate, Communicate
By far the cheapest way of gathering customer feedback is by talking to them direct. Senior managers at successful food companies, like Prêt-A-Manger, make a point of spending time out on the shop floor chatting to their customers. Using these methods, companies can glean enormous amounts of information which can shed light on customer behaviours and trends that the business owners themselves may otherwise have missed, and provide opportunities to strengthen customer relationships.
However, the main reason for assessing customer satisfaction and inviting customer feedback to identify problem areas and rectify them. Renowned for their reluctance to complain – at least directly to the company in question – customers in the UK are far more likely to complain about poor service to friends and family before taking their custom elsewhere. Customer complaints should therefore be encouraged and welcomed by businesses as an opportunity to demonstrate a speedy response and the extent to which they value their customer’s loyalty.
Cooper adds: ‘Customers will forgive mistakes if they are properly dealt with, and they will stay loyal and help your business survive a recession. Ultimately, customer retention comes down to the training and development of your employees. Invest in them and engage them in the customer-focused culture of your business they will engage your customers, whose word of mouth recommendations can be one of the best sources of new customers.
Martyn Potter is a Human Resources Consultant at PKF accountants and business advisers, who have local offices in Sheffield, Leeds and Manchester. Should you wish to discuss this article or any other aspects of ‘people management’, please contact him on 07768937737 or martyn.potter@uk.pkf.com.
Employment Law...what's occuring? 
This April has brought numerous changes to Employment Law which will affect your business. In this article, Louise Conroy of Taylor & Emmet LLP Solicitors sets out a quick guide to the main changes which have taken place. If you require detailed advice, Louise’s contact details can be found at the end of this article.
1. Disciplinary and grievance procedures have changed
With effect from 6th April 2009 the 2004 compulsory dispute resolution procedures were repealed.
Going forward the new ACAS Code of Practice will be applicable to disciplinaries, dismissals and grievances. The main impact for employers is that there is an emphasis on informal dispute resolution where possible and this is underpinned by the fact that employees will no longer be able to claim ‘automatic’ unfair dismissal due to a failure to follow specified procedures.
A tribunal will now look at whether the employer acted unreasonably in treating misconduct or poor performance as reason for dismissal, and will take account of the Code.
If any employer or employee fails to comply with the Code and this is deemed unreasonable the tribunal will have the power to increase or decrease the award by as much as 25%.
Most important effects to note:
a) a dismissal will no longer be automatically unfair because the employer failed to follow specified procedures; and
b) employees will not be required to have raised a formal grievance with their employer as a precondition for an employment tribunal to have jurisdiction to consider certain claims.
c) Tribunals will have a discretionary power to reduce or increase awards by up to 25% if the new ACAS Code of Practice is not observed.
Beware that disputes which are regarded as ‘triggered’ before the 6th April 2009 will be subject to the compulsory 2004 statutory regulations rather than the new Code. If you are in any doubt as to whether the statutory procedures apply to a particular disciplinary procedure or grievance procedure, you should take advice.
The new Code will not apply to redundancy dismissals or the non renewal of fixed term contracts on their expiry. However, unlike the compulsory dispute resolution procedures, it does apply to oral and written warnings.
2. Holiday Leave increases
The change to holiday leave entitlement has been phased in from October 2007 through to April 2009. Employees are now entitled to a total of 28 days paid leave per annum (pro rata for part time) – this can include bank holidays.
3. Flexible Working eligibility criteria widens
Eligibility for making a statutory flexible working application has been widened to include employees with children under seventeen (previously six) years of age. The changes have been effective from April 2009.
4. Statutory Pay Rate Increases
Statutory Maternity, Paternity and Adoption Pay (SMP, SPP, SAP)
For payment weeks starting on or after, 5 April 2009 the weekly rate of SPP, SPP and SAP is the lesser of £123.06 or 90 % of the employee's average weekly earnings.
Recovering SMP/SPP/SAP payments:
From 5 April 2009 employers who do not qualify for Small Employer's Relief (SER) can recover 92 % of the SMP/SPP/SAP paid to their employees.
Employers who do qualify for SER can recover 100 % of the SMP/SPP/SAP paid to their employees plus 4.5 % compensation.
Statutory Sick Pay (SSP)
The weekly rate for days of sickness absence commencing on or after, 6 April 2009 is £79.15.
5. National Minimum Wage (NMW)
Powers
There will be an increase in the criminal investigative powers available to officers enforcing the NMW and the current limit of £5,000 on the maximum fine will be abolished as from April 2009 and a new system of "notices of underpayment" will be introduced which will include a civil penalty against employers who have not complied with NMW requirements
6. Tribunal award increase
Tribunal awards were increased in February 2009 as follows:
The maximum week's pay relevant for several tribunal awards and redundancy payments is increased from £330 to £350 per week and
The maximum unfair dismissal compensatory award is increased from £63,000 to £66,200. (Tribunal awards in cases of discrimination are still unlimited.)
7. Immigration Fees and ID cards
In February the Government announced its proposed fee levels for all visa, immigration and nationality applications and services in 2009/10 saying that ‘The revenue from these fees will enable the UK Border Agency to continue providing a world-class immigration service while reducing the burden on United Kingdom taxpayers.’
The Government says it is ‘currently delivering the biggest shake-up of the immigration system for 45 years, including:
- fingerprint checks before people come to the United Kingdom
- a strong new force at the border
- counting people in and out of the United Kingdom
- and introducing identity cards for foreign nationals
All new foreign nationals and those extending their stay in the UK will be required to have an ID card within three years and expected that, by 2015, 90% of all foreign nationals will have been issued with one.
8. Right To Time Off For Dependent Leave
The EAT has recently ruled that the right to Statutory Dependent Leave (time off to deal with unexpected disruption to care arrangements) is not limited to cases of sudden, last minute problems.
9. Temp agency salaries will attract VAT
Across Britain it is estimated that as many as 150,000 jobs will be at risk following the government’s decision to close the VAT loophole. As of 1st April all employers will have to pay 15 % VAT on the entire cost of hiring temps, including their pay. (Currently VAT is only liable on the temp agency fee). The impact will be felt in sectors that cannot reclaim the VAT, including the financial services industry, charities and the health service.
Louise is an Employment Law Specialist at Taylor & Emmet LLP Solicitors. She has extensive experience in advising individuals and companies in relation to a wide range of employment law issues. Louise can be contacted on 0114 218 4297 or louise.conroy@tayloremmet.co.uk.
Catch up with the latest from Benchmark's clients... 
Digital Exchange (Yorkshire) Ltd - Digital Exchange, the IT and communications specialist based in Sheffield, has added another award to its collection. Just 6 months after being awarded ‘Most Successful Newcomer of the year award’ by Swyx, a market leader in VoIP and unified communications, Digital Exchange has been awarded silver partner status. This is in recognition of Digitals technical understanding and ability to implement Swyx solutions that provide tangible returns on investment. Managing Director of Digital Exchange Nick Cotton said, “Swyx is the perfect communication tool for the current economic climate. People are looking for ways to work smarter. By bringing together a business’s communications needs and integrating them into the work flow of its IT systems, staff work more efficiently which in turn saves money”. Nick went on to say, “We are now one of only two silver partners in the UK and aim to reach gold status before the end of the year”. For more information on Swyx go to www.thedigitalgroup.co.uk
UNIFY BUSINESS SOLUTIONS - After 10 long years, Unify Business Solutions Director Eddie Bird has proposed to his long-term girlfriend! We wish them every congratulations! For further information on Unify and their products visit www.unifybusiness.co.uk
TAYLOR & EMMET - Leading Sheffield solicitors, Taylor&Emmet LLP, is welcoming a new partner to its business legal services team! Senior commercial litigator, Paul Clarke, joins Taylor&Emmet from DLA Piper where he has worked for the last 11 years. Paul is a specialist in commercial contract disputes, acting mainly for local manufacturing businesses. In his role at Taylor&Emmet, he aims to further develop the firm’s commercial presence, by demonstrating that it is a viable alternative to the larger practices. For further info please visit www.tayloremmet.co.uk
HIGHLANDER - Highlander IT and Telecoms are toasting success after gaining a hat-trick of awards in the first quarter of 2009. The company has achieved Microsoft Gold Status for the fourth year running. Highlander Business Development Manager Daniel Bumby comments: “This is core to our every day business functions and gives customers the seal of approval that we understand their business systems and can assist in helping them achieve greater return on investment and uptime”.For further info please visit www.highlanderuk.net
MODIS INTL - Modis, the Sheffield based IT recruitment specialist, has just been awarded the IT staffing suppliership by Yorkshire Water. Jess Chadwick of Modis said, “We are delighted with this opportunity to partner Yorkshire Water, and help them access the deep pools of IT talent within our region”. www.modisintl.com
AFS - After growth of 84 % last year, business growth and expansion continues at Assured Fire & Security, who are celebrating another hugely successful year! To accommodate growth and further improve service Assured are moving to a new 4000sq ft facility in Sheffield, the brand new purpose built hybrid property will provide the space and opportunity to both employ more people and provide facilities such as a show room and demonstration room for customers. The employment of 4 additional staff to assist in the administration departments has been secured ready for the move so they can hit the ground running and investment in new technology such as IT and phone systems is in place. In addition to further developing their London office, company target for turnover was achieved last year and many new prestigious clients and projects were added including more overseas work in Nigeria and Sudan and additional nationwide contracts to their increasing portfolio. www.assured-ltd.co.uk
GUIDE DOGS UK - Are keen to promote charity payroll within companies of 50 employees or more. Companies will need to be CAF registered and the scheme offers employees the chance to donate any amount from £2 upwards to the charitable organisation via payroll. For further info please visit www.guidedogs.org.uk
Dates for your Diary... 
16th May Football Tournament @ Sheffield FC
louisa@benchmarkrecruit.co.uk
20th May Inspiring Women @ Lyceum Theatre
http://www.inspiringwomen.org/shootingstars
26th May Business Link ' how to be an outstanding manager' @ Brooklands Hotel
www.businesslinkyorkshire.co.uk/events
28th May JCI Sheffield 'Pub of the Month' @ 360 BarSheffield
emma.gray@ashtonmortonslack.co.uk
3rd June Wednesday Lunch Club @ The Wig n Pen
malcolm@platillos.co.uk
4th June Business Link ' making sales and keeping customers' @ The Source
www.businesslinkyorkshire.co.uk/events
Final thoughts from Benchmark... 
Final Thoughts from Benchmark Director Louisa...
We meet everyone we represent at Benchmark, interviewing is a key skill that is often underrated. As the law increasingly protects individuals, what are the key no go areas when interviewing job applicants?
What could happen if you get it wrong?
Discrimination law is extensive and protects anyone who alleges discrimination on the grounds of sex, race, religious beliefs, sexual orientation, gender reassignment, disability and age.
As a result personal questions or those that are unrelated to determining whether the candidate has the necessary skills and experience to do the job are off limits. Do you remember Sir Alan Sugar asking Katie in the apprentice about her childcare arrangements? Not clever – unless it is something you would ask every applicant. Best way to be clear is to think of the following four areas
Background:
Avoid any questions that try to identify sexuality such as ‘would you like children?' or 'what is the name of your partner?’
Race:
Avoid any questions about the origin of a person's name however innocent, for example ‘where are you from?'
Disability:
You can only ask about a disclosed or obvious disability if the answer is relevant to them being able to do the job. Avoid intrusive questions about how it is managed.
Personal Background:
This includes questions about religious beliefs or age such as ‘how would you cope working in a young office?’
You risk a discrimination claim by asking personal questions that could be deemed to exclude an applicant. So what can you ask?
You can ask questions that are not directly related to the job, provided it’s in the right context and as long as you ask every applicant. Asking about hobbies and interests is fine and often gives you answers to some of the questions you can no longer directly ask!
Well structured interviews reduce the risk of problems arising from inappropriate questions. Focus on the key experience and skills necessary to do the job; this is easier if you have a well defined job description and person specification. We assist every client clarifying this information and hand holding with the interview process so any wobbles or uncertainly – just give us a buzz!
Your Key to Survival: when recession looms, the loyalty of existing customers becomes a matter of survival.