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NewsGlobe: Commentary
Putting the Customer Back in Customer Service
by Keith Willetts, Chairman and CEO, TeleManagement Forum
The customer is always right. That mantra has served most industries well for many years. But the telecom industry has been slow to realize that in an age of competition and increased costs, the customer is king.
If you look at the U.S. market, for most of the past 100 years the telecom industry was in a monopoly situation where customers were almost an afterthought. AT&T was the only game in town—and indeed the entire country—so if customers were unhappy, where else could they go?
Since the 1984 divestiture of AT&T, that entire business model has been turned on its head. AT&T has seen much more long-distance competition from the likes of Sprint and MCI, and the RBOCs have seen customers look to mobile as an alternative to fixed lines.
When you add the cable companies’ voice initiatives and the strong presence being carved out by VoIP providers such as Vonage and Skype, the telecom operators have finally realized that they need to start building their businesses not around the network, but rather around the customers.
This also applies to mobile operators in areas such as Europe where you see market saturation starting to happen. Both mobile and fixed-line operators understand that at that point, the only way to grow their customer bases is by stealing market share.
But before going headlong into running after new customers, carriers of all stripes need to manage a delicate balancing act among three very crucial philosophies. First, they need to keep what they already have in terms of existing customers and services. Second, they need to grow new sources of revenue and new services. Third, they need to take cost out of the business to maintain profitability.
These three points are intimately linked, and what we’ve seen happen, especially in recent years, is the tendency for the cost pressure to damage levels of customer service and result in high churn and low customer loyalty.
Taking the First Steps
One of the real problems when you look at why customer service is so weak in the telecom industry is that it’s simply not in the DNA of the business. The RBOCs are coming from a monopolistic mindset, which is quite different from where other industries like retail, banking, and manufacturing came from.
Second, great customer service is quite simply very hard to do. Traditionally, for every telecom service offered, operators have built a whole new stack of network, customer care and billing processes and systems. So when you as a customer contact a call center, most often you’ll get transferred around until someone who can access that service account comes on the line.
Customer care agents at most telecom operators can see only their piece of the puzzle, making for a frustrating user experience. This is one reason why telephone and Web self-care for telecom customers is so low—4 percent to 5 percent—compared with financial firms or airlines, which boast 50 percent customer self-care rates.
It’s not that the phone industry can’t build a Web site; it’s what’s behind it that’s at the root of the problem. When you click to see your bill, there are literally hundreds or thousands of back-end systems you’d have to talk to. Those systems weren’t designed for customers to interact with anyway!
Providing a unified and integrated front end, either to a CSR or to the customers themselves, is pretty impossible today. And that will not change until carriers subscribe to the concept of becoming a “lean operator.”
This idea comes from lean manufacturing, which gave rise to how successful businesses such as Toyota, Dell and Wal-Mart run their operations. It’s not just about low cost but high quality and high levels of innovation.
The lean operator is about becoming an agile, innovative, low cost and high customer care operation. This is hard to do when you’re AT&T or BellSouth with on the order of dozens of billing systems, fault management systems, and the like.
The situation has actually gotten worse in the U.S. with recent mergers and acquisitions, such as SBC-AT&T and Verizon-MCI. The reality is there will be years of hard work to consolidate the back office before these operators can really focus on a unified customer-facing component.
So at long last the operators are waking up to the fact that customer service is very important, but they are now staring into the abyss of just how difficult it is to deliver without a fundamental change to their business and systems.
A handful of operators are finally making the big changes needed to consolidate their business and become more focused on the customer. BT’s 21st Century Network (21CN) program will transform completely the carrier’s networks through a $20 billion investment to reengineer its infrastructure to be a low cost, high quality operator. Telecom Italia and others have similar roadmaps on the board.
In the U.S., AT&T’s revolutionary Concept of One—which will consolidate disparate systems onto a single platform—and Concept of Zero—which will deliver services to customers in real time through a hands-free, self- operating network—will help the carrier transform its business to improve the overall customer experience.
To get to this point requires fundamental, rigorous change that involves back-end consolidation, high levels of OSS automation, and improved customer self-care. This won’t happen until the people at the top of these organizations make it clear that this is the corporate goal and line up investments around becoming a customer-centric environment.
The tools, technologies and roadmaps are all out there. We at the TMF have been working on this for several years through our eTOM and other initiatives designed to help operators improve their business processes.
It won’t happen overnight, but the good news is that the telecom industry has finally figured out that it’s all about the customer.
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