Outsourcing: transforms telecom customer service from cost to profit

Maintaining customer satisfaction while creating efficient savings is crucial for telecom service providers, especially during a period of economic uncertainty. As every provider knows, meeting the service expectations of customers is critical.

Even if a customer’s experience has been largely neutral or positive, it is the few negative experiences that will stick in his mind. Telecom service providers can’t afford to neglect the impact of negative customer experiences associated with services.


Maintaining customer satisfaction while creating efficient savings is crucial for telecom service providers, especially during a period of economic uncertainty. As every provider knows, meeting the service expectations of customers is critical.

Even if a customer’s experience has been largely neutral or positive, it is the few negative experiences that will stick in his mind. Telecom service providers can’t afford to neglect the impact of negative customer experiences associated with services.

Competition in fixed line and mobile markets is increasingly intense and customers are even more willing to shop around. According to a report commissioned by Pitney Bowes, a provider of mailstream services, customer churn in mobile telecoms hit 38% last year – up from 33% in 2005.

Additionally, Google, Youtube, Facebook and Hulu are emerging as top providers of person content. These companies are deflecting the key position of telecom service providers by offering end users personalized content. If this trend continues, telecom providers will have to deal with a greater amount of customer churn. Consulting firm Bain & Company determined that it is six times costlier to acquire a new customer than retain an existing one.

Telecom service providers are increasingly turning to outsourcing companies to import their expertise on improving the quality of customer service. Using well-established methodologies such as Six Sigma and LEAN, outsourcers can implement incremental changes in processes that can improve the customer experience while also cutting out waste.

For instance, one outsourcer created templates that advisors can fill in to make after call notes – rather than expecting them to type notes from scratch. This has helped reduced average handling time (AHT) by over two minutes in some cases – creating estimated efficiency savings for a telecom service provider client of over $1 million per year as well as reducing wait times for the customer.

The review of another telecom service client revealed communication issues between offshore customer service operation teams and technical teams onshore. A direct communication channel was established in order to reduce resolution times which helped in receiving updates on “escalated cases” and creating a speedy resolution of customer issues within 24 hours.

Process excellence initiatives carried out for one telecom company to increase the “right first time” experience led to cost savings of $1.6 million and an overall impact on the business.
Outsourcing companies can also help to steer customer behavior away from expensive-to-process calls and help to reduce call volumes. For instance, when customers call with routine matters like checking account balance or paying bills, they can be reminded that this can be done online. Outsourcers have discovered that significant costs were incurred simply by processing the one in five calls that came from customers calling for confirmation that a task that they had already requested had been completed – for instance the ordering of a new handset or the dispatch of a replacement SIM. ‘Reassurance calls’ can be cut down by proactively texting or leaving a message for customers when a task has been completed.

If outsourcing companies are able to reduce the number of simple calls, then contact center staffs are free to deal with more detailed calls that need expert support and advice. In recent years, the increase in device complexity has created a need for more technical support and contact center agents who are trained to answer a wide array of customer inquiries.

The level of technical support needed for users can be costly, and the expertise of an outsourcing company in dealing with these kinds of calls can be essential in keeping costs under control (e.g., by providing support when it is needed at peak call times rather than having advisors available at all times).

And it is not just a matter of understanding technical specifications. Contact center staffs require good interpersonal skills. Tasks like the collection of overdue bills require empathy. Customers must be encouraged to cooperate rather than to ignore the problem. And, even more important, call center staff need to be persuasive when a customer calls with the intention of canceling their contract.

Equally, telecom service providers have to strike a balance between encouraging self service to reduce call volumes and retaining an incoming flow of customer enquiries which provides a window of opportunity to cross-sell additional products including broadband and landline services.

Telecom companies are realizing that outsourcing companies can provide added value in the area of turning ‘cost centers’ like customer service into ‘profit centers’ by selling customers new products. This obviously has to be done with subtlety and care. No one wants to feel that they are on the receiving end of a hard sell from their mobile provider when they had simply called up to check their balance or add a data bolt-on before a trip abroad. Using their deep-rooted experience in what has succeeded and what has failed, outsourcing companies can advise companies and import customer service lessons from areas like banking and insurance.

Many telecom service providers are already doing this. Business Analysts Datamonitor predicts that the telecoms outsourcing industry will grow to more than $51 billion by 2013. With customers now wanting to communicate via online chat and give feedback on a telecom service provider’s performance via comments on Twitter or Facebook, the world of customer service is changing at a faster rate than ever. Balancing the need to keep customers happy and persuade them to buy more products while also making efficient savings is no easy task – and it is one that outsourcing companies can help telecom providers achieve.

Santanu Nandi is executive vice-president, telecom and media, at Firstsource – a business process outsourcing company that works for some of the world’s major telecom service providers.