Written by Robert Keay, Dec 14, 2017
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What happens to the customer experience when a change in a government’s regulatory framework affects the price to customers of almost all goods and services?
It has been a well-communicated fact that the UAE will introduce Value Added Tax(VAT) at 5% on 1st January 2018. It is likely that all other GCC countries will also introduce a similar regime by 1st January 2019. There are many sources of advice for organisations and management around how VAT works and who is obliged to register but it seems that little thought is being given about how to deal with the group of people most affected by the change, the customers. Customers are the sole source of revenue for every organisation and when it comes to VAT the buck stops with the end customer. So what to do? A few general thoughts may help planning the introduction and to avoid unnecessary customer dissatisfaction.
Perhaps a place to start is to properly understand
A - Which customer groups will be affected?
B - To what degree they will be impacted?
C - Who will handle the key customer touch points?
D - Are they skilled to be able to help the customer understand the changes?
E - Can such skills be positioned as a value moment in the customer’s experience?
Which Customer Groups will be Affected?
Is your business required to register for VAT? Are your customers registered for VAT
If your business is predominantly with VAT registered B2B customers then they may be able to recover their input tax.
If your business is required to register for VAT and is predominantly B2C then your customers will pay the full uplift.
To What Degree Will They be Impacted?
Are the goods or services you supply liable for VAT or are some/ all exempt. How would you explain which are and which are not included?
Who Will Handle The Key Touch Points?
Such changes often generate a high level of additional traffic from customers who are confused or unclear about the change in price and process and may need to have the changes explained in a clear, polite and concise manner. So where are the key touch points? What are the key communication channels that customers are most likely to use? Can you proactively manage these channels to give the best possible service? Have you reviewed your customer journey maps to consider these factors?
Are They Skilled To Be Able To Help The Customer Understand The Changes?
What skills, information and processes do the staff involved need to have to be able to give the customers a satisfactory experience that potentially enhances the customer’s view of the value of your organisation as a supplier? Be sure not to overlook the use of digital communication to provide “self-help” to the increasing volume of customers who turn to smartphone and tablet as their first choice for information. Have designed a skills development plan?
Can the Use of Such Skills be Positioned as a Value Moment in The Customer’s Experience?
The impact of a change like VAT can have on the internal process and systems of an organisation may be considerable and create an internal workload that can temporarily distract the organisation away from its customers’ needs and/or generate errors that can cause customer confusion. VAT is not new but it is new to the GCC. It may be helpful to retain a focus on the customer experience and to develop a programme that foresees and addresses many issues before they arise and makes the VAT introduction to your customers a positive value-added experience that creates competitive advantage by enhancing your value to them as a supplier. While you may not be responsible for VAT being introduced it does create an ideal opportunity to differentiate your organisation from its competitors.
The final point is that as with any a new regulatory obligation and if any organisation is in doubt or unclear on any point it is sensible always to seek expert advice.