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10 September 2011

Cashier Number Three, Please!

Tag(s): Business

If you have ever queued in a British Post Office, and that must be everyone of you, then you will have heard the voice of Terry Green. His is the male voice of the call forward system that the cashier uses to speed up the queue. You hear the voice say “Cashier Number Three, Please” or “Four”, or “Five”, see the number flashing and go to the correct cashier. You have waited in a single queue for multiple cashier desks and so do not get stuck behind the one individual who is negotiating to send a parcel to Novosibirsk. His voice is heard over 30 million times every month in post offices, shops and banks throughout the UK. Terry is also the co-founder of the company that invented the system, Qm, short for Queue Management and has now written a book on the subject called “You’re Next!”[i]

A few years ago I worked with Terry and his colleagues to help them develop their strategy and spruce up the sales proposition. Terry and his co-founder had previously sold the business to the next tier of management in a “vendor initiated management buy-out” backed by a London venture capital fund. The following year they sold it on to a Nordic based equity firm who merged it with a Swedish company also in the queueing business called Qmatic thus creating a new global player with 50,000 installations in use by an estimated quarter of the world’s population in 110 countries. The second transaction generated a five-times investment multiple for the venture capital fund in just 30 months.

Terry describes three distinct phases that Qm went through before it became part of Qmatic Group. Each one was quite different in character and called for revised priorities and skill sets to be applied in order to create and sustain success.

Phase one was about harnessing available technology to solve a problem they perceived in everyday life- that of making linear queues better. They were able to bring their first customer, the Post Office, into the discussion early and so reduce the risk in their investment and speed the arrival of revenue. At this stage the business consisted of a small project team working up an idea, sustained by little more than enthusiasm, the goodwill of key stakeholders and a healthy dose of perspiration.

Phase two consisted of building a sustainable business model while creating a market for their new products. The small but loyal team had to take on the mantle of becoming managers as new people were hired to meet the needs of a growing customer base. The company invented, manufactured, installed and maintained proprietary electronic systems in clients’ premises and set high standards of customer service.

Creating the market for queue management in the UK required dedication and pain-staking research. They amassed a body of knowledge that they liked to call their “art and science” which in turn drove value creation in the business, set the path of their product development and the tone of their communications with customers and prospects. They competed for growth and succeeded apart from the distraction of an overstretching acquisition which forced a painful period of consolidation. They were then able to strengthen further the management team and push on for dramatic growth.

Phase three involved the sale of the company to the management team. The founders had to step aside and adopt a new role as mentors to the management assisted by the hire of a new CEO and CFO which made a significant difference to confidence levels and to the company’s performance. There was also the involvement of the investors who of course were heavily focused on their own exit multiples.

In other countries queue management is surprisingly unsophisticated, often involving little more than portable barriers. While working with Qm I visited the US and Germany and found few examples of any advanced queueing systems. By now Terry and his colleagues had compiled evidence that suggested that over £2 billion and 2,000 years of people’s time are still wasted every year through badly managed queues. And that’s just in the UK. The figures must be very much worse in countries where there is rudimentary queue management.

The British are known for their supposed love of queueing and acceptance of order so is this just a British phenomenon? Well, no, because the creation of Qmatic in Sweden, in which Qm is a key player, proves that a creative approach to queueing can be applied with excellent results in different parts of the world. Qmatic specialises in virtual queueing methods, the most pervasive of which is the ticketing system. You will have experienced this at delicatessen counters where you take a numbered ticket and can then stand where you like but will be served in the numerical order of the tickets. This allows a degree of freedom to the customer but remains a linear system in that you can still get stuck behind the awkward customer who takes an interminable time over her purchases. Such systems are used widely, not just in retail but also for example in the health sector.

Qm took the ticketing system to a much more advanced level when it invented Matchmaker, a system now used widely in the banking sector. Matchmaker involves issuing a ticket to a bank customer based on his particular need and the likely time of waiting for a member of staff to meet that need. By managing expectations in this way the stress of queueing is substantially reduced.

Qm and companies like it prove the essence of value creation. To create a sustainable business you must give customers a compelling reason to keep coming back for more. Their first customer for “Cashier Number Three, Please”, the Post Office is still a major customer over fifteen years later. Twenty years ago queue management was hardly mentioned despite the fact that it was a constant cause of complaint by customers. Today that’s changed dramatically. Many organisations in the UK and the USA now talk about service issues and put senior executives in charge of customer experience.

But there’s still a long way to go. There is a huge cost to society of wasted time and rising blood pressure. And it’s not just about shops and banks. Queues and queue management exist in all aspects of our lives, whether it’s aircraft coming into land, crowds at concerts, the way our phone calls are handled by call centres, or traffic jams on major roads, a subject close to my heart in my capacity as chairman of innovITS. We should change it for the better, to eliminate queueing waste, save money and give back to people their precious time.

[i]You’re Next! How one company changed the way we shop. Terry Green   Marshall Cavendish Business   2011

Copyright David C Pearson 2011 All rights reserved

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