Poor complaints processes and customer loyalty in the telecoms sector

Posted in blog posts on 6 September 2010 by Leon Paternoster
2 comments on this article

Institute knowledge and research officer Alan Tanner discusses how the telecoms sector needs to make its processes more customer friendly in order to retain customers who want to re–purchase its products.

The telecoms sector has never been a customer service star. Sure, it has some good performers, but the overall picture is unimpressive. In our recent UKCSI results, the sector managed an overall satisfaction score of just 72.2 against a services sector score of 80.2 and an all-sectors average of 75.6.

So, what’s the problem? A personal experience provides some clues. I recently transferred my telephone line rental from one company to another. Shortly after, the phone line went dead. A search of the new company's website proved confusing and fruitless. Finding a phone number to hand from a previous customer care call, I made two phone calls, resulting in three queuing transfers and one dead line at the head of a queue. Finally, after one and a half hours, I got the re-assurance I needed. Throughout, the staff were all polite and as helpful as they could be.

Customers may not bother to defect, but they may not re-purchase.

I’m not sure which organisation created my problem. Frankly, I don’t care. What I do care about is that interacting with these customer service processes made me feel anxious and powerless: And, that’s the point – it’s not that I had a problem, I just couldn’t find a way to get it solved quickly! The real issue here is that the customer service ‘processes’ I was exposed to don’t appear to be designed from a customer’s viewpoint: They were technical and impersonal.

Other customers may agree: Our UKCSI telecoms sector presentation shows that sector ‘Problem solving’ scored 70.3; the services sector scored 79.2, and all sectors averaged 74.2.

Poorer performing telecoms suppliers may be tempted think themselves secure behind large economies of scale and high technological entry barriers. They could be wrong — remember Virgin and British Airways? And they have another, more immediate, problem: Customers may not bother to defect, but they may not re-purchase. I was thinking about a TV package. Now? No chance – life’s too short for the hassle!

Comments

  • “

    The personal experience cited of calling the telecom provider is a typical example of using technology to the opposite effect from what it was designed for. Technology should be used to make life easier and reduce costs – but the cost to these companies could be high if processes are not used to simplify the customer journey.

    In this competitive sector, where there is little product differentiation and low, if any, brand loyalty, switching regularly between competitors is regular practice. Customer retention is low, customer defection is higher. So one of the few opportunities for these organisations to excel is in the area of customer service.

    The article discusses that processes are ‘not designed from customer viewpoint.’ Successful Voice of the Customer programmes incorporate customer touch point mapping, enabling an organisation to understand how their customer interacts with it, so that processes can be built with the customers’ needs in mind.
    http://blog.syngro.com

    ”
    Keith Schorah on 7 September 2010
  • “

    Hi Alan,
    I too have had similar experiences with companies that are technology led. I think the interesting point you make is that when you got through the staff were 'all polite and as helpful as they could be'.....exactly what you wanted, I imagine.

    I think the challenge is not one just of technology but a whole approach to their market. Their solution is still seems to be too technology led from a technology company and, however, much they profess to being customer centric their results and processes show that they are not.

    Given that the UK telco market is mature and saturated and that telcos seem to be competing to acquire new customers just to replace the ones they lose, perhaps there is an opportunity for one player to actually focus on retention in a way that works for their customers rather than purely acquisition. This could be started by turning customer service and problem solving into a profit centre rather than a cost centre.

    A big challenge and it would take a brave FTSE CEO to undertake this challenge. Who's up for it?

    Adrian
    Blog: http://www.adrianswinscoe.com/blog/

    ”
    Adrian Swinscoe on 9 September 2010

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