KenCall CEO talks on Customer Service in Kenya

Nicholas Nesbitt is the Founder and CEO of KenCall, the first and most successful of Kenya’s business process outsourcing (BPO) and contact centre services providers.
We had a chat about customer service in Kenya, why it’s so lacking, the cost of providing customer service to corporates and the consequences for corporates who do not engage with their customers

excerpts

As someone who has lived and worked in the US and now taken on the reins of a service company in Kenya – you have unique insight into what can be done to make it better here. What is wrong with customer service, and why do we get it wrong?

In the tourism sector, Kenyans show very good customer service and are known the world over for this. However this is a practice of only cleaning up house when visitors are coming, and does not apply the rest of the time, or extend to fellow citizens, local customers etc.

Customers, who don’t have much of a choice, get used to a bad level of service, which they tolerate

Industry regulators set standards for companies to follow in terms of delivery in some sectors, but they rarely enforce this.

Some Companies in some sectors show monopolistic tendencies – and define their customer service by that i.e. . they set their market prices that customers will pay, and then set the level of customer service that they can offer based on that price.

Some (banks) may also (falsely) believe that since they have had some customers for so long, these customers are eternally loyal to the bank and will not take their business elsewhere

What can be done to educate the common man? E.g. Banks ask customers to form queues, but these are ignored and impatient customers often ignore these and jump ahead of others being served. Can civic education help her? i.e. let citizens know how they can get served better?
Civic education would help e.g. radio messages that will encourage road courtesy – give way to someone entering traffic, and the next time someone will reciprocate for you

People rarely talk about good customer service (beyond their family & friends), but they will rant and even write online about a bad experience from a particular company
Some companies know this, others don’t know or seem to care what their customers say. This is unfortunate as we live in an age where customers in the US, UK and other countries (including Kenya now) will go online and rant about their bad experiences e.g. on twitter or facebook.

It does not take much for a company to watch or and monitor what’s being said about it online. A proactive company should respond to these negative signals , messages, communications being posted online e.g. notify customers of technical glitch that happened and the steps being taken to fix it.

Also, the youth of today interact online and companies (and politicians) should recognize this in terms of customer service and adjust their messages to reach the youth.

He demonstrated how he uses a program called Incoming, to track what’s being said about KenCall online, as well as other topics such as ‘Tiger Woods’ (golfer) and ‘Raila Odinga’ (Kenya’s Prime Minister) , with hundreds of instant results on screen instantly displayed

Safaricom and KCB (a leading commercial bank) set up call centers for their customers? Did they go wrong by not outsourcing these services? Did they give KenCall a chance to bid for that?

KCB set up a call centre that was about 1/10 the size of KenCall at a cost of 20X what KenCall would have charge them. They did not invite KenCall or other companies to bid. Some companies fear outsourcing for security reasons because of confidentiality of customers data, but this excuse if based on falsehoods – much bigger banks and companies entrust their data to service providers like KenCall the world over, and in any case leaks or security violations are likely to originate from the bank/company itself e.g. G4S, not KenCall. KenCall has the most secure communications links with the company that cannot be intercepted.. also many companies that sign with KenCall and services providers require that this not be disclosed to the public by KenCall

Safaricom talked to KenCall, south African and Indian companies and wanted KenCall to do what they were already doing for Orange/Telkom (Kenya) and Tigo (Tanzania). In the end they decided to do it in house, but at an estimated cost of 200X what KenCall would have cost and about 50X what KenCall would have charged them to run it

What is the take-on cycle at KenCall? If KCB had contracted KenCall how long would it take for KenCall to be ready to handle business?
Perhaps 3 to 6 weeks depending on what KCB wanted. A bank like KCB has many different types of callers with queries ,and they could still use KenCall to share the load e.g. credit cards, or card dealers with technical queries

Kenya government is the largest procurer; we’ve seen large embassies have outsourced their visa duties – do you think Kenya government should do the same? E.g. Manual processes in land office, judiciary?, there's all this talk of digitizing records..
Absolutely this should happen, the digitizing of public records, outsourcing of services. This can be don even at community level, where young business people can set up BPO centers, now that there is fibre cable, and work with public records e.g. health, digitizing them. The go ahead for this has to come from Nairobi though

Service delivery in government would improve through outsourcing; there’s no need for people to get in buses and travel hundreds of kilometers to obtain simple documents like birth certificates, if this was outsourced and online, it would make government more efficient.

On its part at KenCall prefer to work with outsourced packages that average at least 10,000 calls

Has the arrival of fibre cable changed things for the industry?
Speeds have not changed for many, because you have to pay more. It's like sipping soda through a straw, but even if your demand goes up, you have to invest in a bigger straw

What do KenCall Customer experience specialist teams do?
They step into a customer’s shoes and interact with KenCall staff the way a customer would and the performance is measured with a view to improving the service that KenCall customers receive

Comment on education gaps in the area of improving customer service
Nesbitt is a board member and deputy chair of the board of the Multimedia University of Kenya (formerly KCCT). They have a vision of becoming a world leading institution and producing talented Kenyans specialized in ICT to work in key economic sectors like tourism and ,agriculture – and curriculum development is key area that will be looked at.

Paying investor dividends by mobile phone - Part II

Paying investor dividends by mobile phone - Part II

On Saturday I got my dividend payment from small investment in shares of Safaricom which is Kenya’s’ leading mobile phone company.

As expected this dividend payment was by mobile phone transfer using safaricom's M-pesa (actualy Vodafone - UK). Notification was in two parts, first a few days ago that the registration was successful, and then on Saturday that my M-pesa account had been topped up by about 650 shillings (~$8.50) and I could draw down the funds.

This dividend payment transfer is the first of its kind in Kenya, and maybe a world first too from Safaricom. It can be emulated for other bulk payment remittances e.g. other companies that have over 20,000 shareholders to pay dividends, tea bonus to farmers, repayment of micro-loans.

NSE Portfolio November 2009

Equity market stalled since last quarterly review in August 2009 , as bond activity goes full steam

The stable

Diamond Trust
Kenya Airways
KCB Bank Group
Safaricom
Scangroup
Stanbic (Uganda)

Review:
Best performer: Stanbic (Uganda) is up 17% this quarter, then Safaricom up 7%
Worst performer Scangroup down 6% then Diamond Trust down 5%
In: none
Out: none
Increase: none
Decrease: none

Unexpected gains/losses:
- Kenya Airways paid a dividend despite a record loss
- Registered for Safaricom m-pesa dividends which will be paid today (November 12)

Performance: The Portfolio is down 1.4% while the Nairobi Stock Exchange NSE 20 index is down4.4%. Safaricom has more weight on NSE than here, but either way is poised to boost both portfolios

Events & Outlook:
- No trades or new investments made in the quarter, but took part in one unlisted agricultural investment
- Missed out on Family Bank capital raising /rights issues as it is locked out to new investors (since September 2009) Ð (its due to close within a week)- - Passing on another Uchumi rescue plan which also closes within a week

CBK Profits II

Reading the tea leaves at Central Bank

The Central Bank of Kenya (CBK) FY 2009 (PDF) results are out and, compared to last year, it’s a different story.

Banking on other Income: CBK is another institution that has had other income yield great returns. While net interest income was down from 10.3 to 8.4 billion, and commission income on treasury bills and bonds was flat at 3 billion (investors opting for corporate bonds), CBK booked a forex gain of 13 billion ($173 mullion) up from 54 million on revaluation (a 25,000% gain) and 4.8 billion from the controversial $45 million sale of the Grand Regency Hotel. So profit for the year was 23 billion ($306 million), up from 9 billion in the year before, and CBK paid a dividend of 7.2 billion ($96 million) to the Government of Kenya (GoK) (up from 4 billion). And while CBK is exempt from income tax, KRA (the tax man) is not letting go of a Kshs. 22 million employee tax dispute with the CBK.

Make it Rain: Kenya has Kshs. 108 billion (~1.4 billion) worth of currency in circulation (up from 100 billion in ‘08). Currency costs (sourced from De La Rue) were 1.1 billion (~15 million) to produce new notes (up from 330 m).

Generous Creditor: CBK lends to employees at 3% (perks of banking) and charge the government 3% on their overdraft. In a July 07 agreement GoK agreed to pay CBK 1.11 billion p.a. over 32 years at 3% to settle a GoK overdraft dating back to 1997. The CBK act limits the GoK overdraft to 5% of gross recurrent revenue (so currently this should not exceed 17 billion)

UK assets: CBK has 194 billion in assets held with united kingdom banks, that’s even more than Kenya (66 billion), or the rest of Europe (31), and USA (20) while all their 312 billion liabilities are in Kenya. This was even after they increased euro and dollar assets, and reduced sterling pounds, compared to '08.

Loans & Rates: CBK loans to commercial banks stood at 15 billion ($200 million), up from 8.5 billion. They lent money to commercial banks at 8% p.a and earned 6.64% on treasury bills/bonds.

No Gold Standard: CBK gold holdings are just 34 million (less than $500,000) up from 28m year before. In comparison, just this week, India pipped China in the gold race buying $6.7 billion worth of gold from the IMF in hard currency (but is still only 10th largest holder)

Nairobi Christmas Tourism Expo

The annual Christmas tourism expo (Getaway ’09 fair) fair was held at Sarit center last weekend. About 75 exhibitors were offering holiday packages for Christmas and the New Year in addition to 2010 rates. Christmas and Easter are the most expensive holiday months in Kenya with rates for 23rd December to 5th January and then in the first week of April 2010 sometimes more than double the low season rates that apply for other weeks over the year -

Some of the notable ones

Joint Marketing Initiatives: (i) The Laikipia Wildlife Forum had a booklet that promoted all the main tourist attractions and venues in the Laikipia area – including wildlife reserves, cottages, lodges, ranch houses, community properties and tented camps - in places such as Nanyuki, isiolo, maralal, lewa conservancy, ol-pejeta conservancy - and with destinations such as il-ngwesi community lodge (featured in Milking the Rhino - and costs 12,500 p.p or ~$165.), Sweetwater’s and Mt. Kenya safari club - brave considering the recent banditry in the area
(ii) Beautiful brochures by the Kenya wildlife services Kenya Wildlife Services promoting destinations like Kakamega national reserve, kisite mpunguti marine park, ol donyo sabuk park (about 85 km from Nairobi)

Island hideaways: Kenya is not known for its islands, but there are some exclusive destinations e.g. in Lake Victoria, Lamu and South Coast that hardly advertise locally. But present were Samatian Island Lodge and Roberts Camp both on lake Baringo, and Crater Lake in Naivasha from the Merica Group . For wildlife in Naivasha area, there is Malewa wildlife lodge and Kigio wildlife camp (both on private ranches managed by Kigio)

Chain Groups (i) Tourism giant Serena, which has made a lot of mileage thanks to Kofi Annan being their frequent guest, has 6,500 (~$87) p.p. full board, up to 22 December at either Mara, Sweetwater’s (mt. Kenya), Amboseli, Samburu, kilaguni (Tsavo) and mountain lodges which jump to 16,000 for last week of the year (Christmas week)

Voi Wildlife Lodge have three resorts located around Tsavo parks in Voi including the manyatta camp along voi river that has 24 en-suite luxury tents each with a private swimming pool. Special rate is 6,550 p.p (~$87) sharing.

Kenya Coast: All inclusive coastal resorts include Travellers Beach and Turtle Bay (which has numerous children activities, free water sports - windsurf, snorkeling, diving in Marine Park) , while Mombasa Continental has 8,500 half board all year round (no low or high season) and 2 night flying packages form Nairobi at a cost of 28,800 (~$385)

For the South Coast: it’s time to take an interest in south coast again because (i) several airlines now fly directly to ukunda airport) and (ii) there’s a new road being built from the Nairobi-Mombasa highway direct to kwale are – both of these mean that travelers to south coast can bypass Mombasa island traffic and the likoni ferry crossing, which can add considerable time to a journey

Church owned resorts churches now offer conference venues at destinations resorts; these include PCEA church who have Milele Beach at Mombasa and Jumuia Resorts (of the national council of churches of Kenya – with hotels in Kisumu, Nakuru, Limuru and Kikambala (north coast) that have low rates e.g. half board is 4,950 (~$67) per night at Kikambala, but no booze allowed.