Whitbread chief exec: The secret to keeping customers happy

The Premier Inn faced a challenge when it built its first Hub hotel in central London. How do you build a budget hotel in one of the most expensive cities in the world, and still create a great customer experience?

Smaller rooms are the obvious answer, explained Andy Harrison, chief executive of FTSE 100 company Whitbread, Premier Inn’s parent company. The Premier Inn’s standard 21 square metre room was cut down to 12 square metres.

The secret to keeping customers happy is careful consideration and attention to detail, said Harrison, speaking at the National Association of Pension Funds’ annual conference. “The way the room has been designed, every centimetre of the 12 square metres has been carefully thought about. All the things that guests see, feel and touch. We’ve put a lot of technology into it.”

The pensions industry is faced with a similar challenge. As it grapples with the new defined contribution charges cap, how can it deliver more for less?

Here are consumer expert Harrison’s top three tips:

Acknowledge that the concept you are selling is complicated - and try to make it simpler. “Selling a pension is a really hard thing to do. You pay upfront for an uncertain benefit and it is incredibly complicated. The whole thing is made a lot more difficult by changing regulation and by the jargon that surrounds the industry,” said Harrison.

Indeed, Whitbread’s own scheme has simplified its communications in the light of auto-enrolment. “Communication has changed and we have simplified the messages. One of the reasons why we’ve done that is that people have a choice. Hey presto, we have to treat them like consumers. We have to persuade them to stay in. We have to cut out all of the jargon,” said Harrison.

Do not lose sight of the consumer. “I think that the pensions industry is one that tends to be dominated by the “experts” which means that it’s very easy to lose sight of the consumer,” said Harrison. “If we are going to have a really successful, vibrant pensions industry, we need to make sure that the voice of the consumer is heard loud and clear.”

Whether it’s selling coffee (another Whitbread business is coffee chain Costa) or persuading people to save into a pension, it’s easy to get distracted from the most important task at hand.

“The problem is that there are so many distractions, particularly in large organisations, that companies lose focus [on the] simple truths. I think one of the problems for the pensions industry is you have got more distractions than most,” observed Harrison.

He described walking around the NAPF’s exhibition hall and witnessing a dearth of simple, powerful and emotional customer propositions. “There is a difference between customers and consumers and you all have to decide, do I worry about my customers or about the end consumer? I think if we as an industry do not worry about the end consumer, the industry will not grow and prosper.”

“To really simplify things takes time,” said Harrison, describing the long process Whitbread went through to articulate its corporate vision.

Consider the details that could make all the difference. “What I worry about is that as tens and thousands of people move from company to company, their pension will be eroded by transfer costs and fees,” said Harrison. “I am a big fan of trying to find a way of aggregating those pots into big pots so that when people come to retirement in twenty years’ time, they have something to show for it.