Network operators and service providers are uniquely positioned amongst all industry sectors, in that they have the data that describes exactly how all their customers use their services, through call and data records. Every single time a customer uses the network, there is a record logging this.
All this data is painstakingly collected so that bills can be produced. And what else is done with it? Well, not enough in most cases. It will be used to ensure quality of service thresholds are being met, where appropriate, and it is aggregated to help with network planning and optimisation. No doubt various other reports are spewed out of data warehouses to tell directors if the number of call minutes has gone up or down this month, and other pertinent management information, but as to using the information to manage individual customer relationships – well, er....
One of the problems for telcos pretty much ever since number portability became mandatory has been that of churn. Estimates of churn rates vary wildly, and even those that the operators will admit to are difficult to compare, since what constitutes churn can be defined and measured in different ways. Nevertheless it is likely that a mobile operator in the UK will lose as much as 30% of its customers every year, and for ISPs it is even higher, perhaps as much as 50%.
Now these are pretty eye-watering numbers. Some churn is inevitable – people move away from the coverage area, or even die, companies may cease trading, and indeed some customers (such as bad payers) might even be encouraged to leave; however this would be a core churn rate down in the single figures. Something is not right!
Clearly it is much cheaper to retain a customer than to have to recruit a new one as a replacement, and add to the recruitment cost the loss of revenue stream from the existing customer and it all adds up to a significant cost of operation.
Now telcos do make efforts to identify potential churners through data mining and pattern analysis, but clearly these efforts are not bearing significant fruit as yet. The trouble is that the main actions of these operators is to find more attractive products and tariffs, such as double and triple plays which (in theory) are more difficult to churn from. But this simply fuels churn, as the ‘arms race’ between operators means that there is always a more attractive offer out there if you can find it. People are not entirely driven by slightly better deals elsewhere, however, especially as this requires effort on their part – there is usually some other reason why they are ready to move.
One survey by Pitney Bowes identified the three top reasons why people change supplier, and found that these are consistent across Europe and the US. They are:-
1. not being recognised as a valuable customer (all countries average – 55%)
2. unhelpful staff (all countries average – 47%)
3. ineffective call centres (all average – 42%)
Now although this research is almost 2 years old, I very much doubt the position is significantly different today. This should be giving COOs sleepless nights – this implies that better or cheaper deals may dictate the operator a customer switches to, but the trigger for leaving the existing supplier is poor customer care.
Take the first point: the worth of a customer should be apparent to an operator very easily – we are back to the fact of a complete data record of a customer’s activity. Of course a customer will have an inflated view of their own value, but take into account both revenue streams and cost of losing the customer, and most customers are valuable enough to merit effort to retain them. The second and third points above are simply variations on the theme of bad customer care.
And we all know from personal experience how frustrating these companies can be. Not just the call centres, which seem to specialise in getting you through to any department which can’t solve your problem, but also the web sites for self care, which are often impossible to navigate around and find what you want without resulting in dangerously elevated blood pressure.
The problem isn’t the people: they are usually trying to help you as best they can. The problem is partly in the technology that supports them (back to ways of analysing and understanding that customer data), partly the result of poorly designed processes and business flows, and partly the corporate structure, which stove-pipes customer care and treats it as a business cost to be handled as cheaply as possible.
Communications companies have to be better at treating customer care and customer value holistically, or these high churn rates and costs will never reduce - and as consumers we all pay the price.
Showing posts with label customer care. Show all posts
Showing posts with label customer care. Show all posts
Wednesday, 2 September 2009
Thursday, 6 August 2009
How to get CRM wrong
I've been involved with the delivery or enhancement of information systems that support customer services for many years, and I am eternally disappointed at how companies seem determined to miss the point of customer service. Customer service often seems from a consumer's point of view to be something they hate, and can result in really negative views of the organisation in question; and yet companies seem unable to address this.
Accordingly, since so many companies seem determined to deliver bad customer service, I'd like to help them by presenting my guide to making CRM unsuccessful!
Here are my top 5 decisions to ensure a reduced business benefit from CRM investment. (I could do many more, but in the interests of brevity...)
Customer service is a cost of doing business - so we will just try to handle problems as cheaply and efficiently as possible
Most of the significant inadequacies in customer service arise from the view that the cost of it must be kept under strict budget constraints. However, the results of poor customer service are felt in increased customer churn, longer payment times, reduced ARPU, negative recommendations by customers to their social circle, and adverse brand image generally. Conveniently, none of these are reliably quantifiable, and none affect the budgets of the Customer Service operation.
As with so much else in life, customer service costs are about value for money - the service levels (both measurable and 'feelgood') should be carefully defined, and only then can strenuous efforts can be made to deliver that at a sustainable cost.
This is especially true with offshore call centres - there is a tendency for these to be staffed with agents who clearly don't know the company or products they represent, don't understand how these products are used in the context of British life, and don't understand UK geography. This can only work with very careful attention to training.
We will stream customer contacts by subject of call
Like everybody else, I have had some bad experiences with calling Customer Service lines. There are plenty of ways to annoy the customer before even speaking to an agent: the interminable "press 1 for x, press 2 for y" menus, the long wait whilst "none of our agents is available", and the meaningless platitude that "your call is important to us" when all the evidence is to the contrary. But worst of all, on getting through, finding that the person you speak to is not the right one after all, and you need to be handed on to another department (or even in some cases asked to call another number altogether). I have been on calls to companies who should remain unnamed where I've been passed from one department to another, only to be transferred back to where I started.
Every company has a good reason for streaming. Mostly it is about the complexity of the issues that can arise and the degree of staff training to cover the board; often about systems and the lack of ability to join together all the data that may be required; and sometimes it is because the company needs to be careful about what authorisations they permit which staff to have (a significant portion of fraud is regrettably internal). Too few companies design and manage the streaming in an externally focused way rather than to suit themselves.
We can solve a lot of problems through the IVR programming
This should actually read, "we can create a lot of problems through IVR programming". Besides the menu chains so often leading to dead ends when the choices don't exactly tally with what the customer is seeking, often with the use of standard messages instead of a person and with no way back but to start again, there is a tendency to request meaningless information along the way. I am particularly irritated by the recorded announcement asking me to key my account number using the telephone keypad, only for the agent on finally getting through beginning by asking me for my account number. It's no good arguing, this poor soul can't help it, the systems haven't passed the data on with the call.
Not only should IVR routings and messages be carefully set up, but should also be frequently reviewed and revised. I believe that companies should force their senior managers and directors to use their own products but not as corporate facilities, but as real external customers. If the CEO of say a mobile operator had to call customer service like everybody else when a problem occurred instead of getting their PA to call the CS Director, the situation would improve dramatically.
Once we've got self-care set up, all we need to do is monitor the daily reports and let it take care of itself
Self-care seems to be particularly widely abused by Customer Service operations. There is no doubt that some self care works really well: for example, those energy companies I've used have excellent and efficient web sites and IVR systems to take requested meter readings. For anything except a routine request, however, it seems to break down.
There are a few simple rules that need to be followed for self-care (whether web or IVR based) to work better. Firstly, design the flows from a customer viewpoint - think of minimising number of clicks or time taken, ease of use, escape routes. Secondly, design usage data reports such that you can tell what is working and what isn't. Thirdly, keep on and on reviewing how easy it still is to use after changes for new products, new processes, new journey flows etc.
We aim to deliver the same level of customer service to all of our customers
Unfortunately, this usually means dragging everyone down to the lowest common denominator. You should aim to treat every customer with the same level of respect and care, but not all customers are equal. This mantra is often an excuse for the failure to recognise customers who might have cause for complaint, or who are particularly valuable and should not be aggravated, or who are at risk of churn. These failures are usually for systems reasons - again, the inability to pull together the elements of customer data that can identify such conditions and warn the customer service operator.
Customer Service has such a bad reputation amongst the public at large - but we don't have to accept that 'industry standard' poor levels of service need to apply to our own organisations.
Accordingly, since so many companies seem determined to deliver bad customer service, I'd like to help them by presenting my guide to making CRM unsuccessful!
Here are my top 5 decisions to ensure a reduced business benefit from CRM investment. (I could do many more, but in the interests of brevity...)
Customer service is a cost of doing business - so we will just try to handle problems as cheaply and efficiently as possible
Most of the significant inadequacies in customer service arise from the view that the cost of it must be kept under strict budget constraints. However, the results of poor customer service are felt in increased customer churn, longer payment times, reduced ARPU, negative recommendations by customers to their social circle, and adverse brand image generally. Conveniently, none of these are reliably quantifiable, and none affect the budgets of the Customer Service operation.
As with so much else in life, customer service costs are about value for money - the service levels (both measurable and 'feelgood') should be carefully defined, and only then can strenuous efforts can be made to deliver that at a sustainable cost.
This is especially true with offshore call centres - there is a tendency for these to be staffed with agents who clearly don't know the company or products they represent, don't understand how these products are used in the context of British life, and don't understand UK geography. This can only work with very careful attention to training.
We will stream customer contacts by subject of call
Like everybody else, I have had some bad experiences with calling Customer Service lines. There are plenty of ways to annoy the customer before even speaking to an agent: the interminable "press 1 for x, press 2 for y" menus, the long wait whilst "none of our agents is available", and the meaningless platitude that "your call is important to us" when all the evidence is to the contrary. But worst of all, on getting through, finding that the person you speak to is not the right one after all, and you need to be handed on to another department (or even in some cases asked to call another number altogether). I have been on calls to companies who should remain unnamed where I've been passed from one department to another, only to be transferred back to where I started.
Every company has a good reason for streaming. Mostly it is about the complexity of the issues that can arise and the degree of staff training to cover the board; often about systems and the lack of ability to join together all the data that may be required; and sometimes it is because the company needs to be careful about what authorisations they permit which staff to have (a significant portion of fraud is regrettably internal). Too few companies design and manage the streaming in an externally focused way rather than to suit themselves.
We can solve a lot of problems through the IVR programming
This should actually read, "we can create a lot of problems through IVR programming". Besides the menu chains so often leading to dead ends when the choices don't exactly tally with what the customer is seeking, often with the use of standard messages instead of a person and with no way back but to start again, there is a tendency to request meaningless information along the way. I am particularly irritated by the recorded announcement asking me to key my account number using the telephone keypad, only for the agent on finally getting through beginning by asking me for my account number. It's no good arguing, this poor soul can't help it, the systems haven't passed the data on with the call.
Not only should IVR routings and messages be carefully set up, but should also be frequently reviewed and revised. I believe that companies should force their senior managers and directors to use their own products but not as corporate facilities, but as real external customers. If the CEO of say a mobile operator had to call customer service like everybody else when a problem occurred instead of getting their PA to call the CS Director, the situation would improve dramatically.
Once we've got self-care set up, all we need to do is monitor the daily reports and let it take care of itself
Self-care seems to be particularly widely abused by Customer Service operations. There is no doubt that some self care works really well: for example, those energy companies I've used have excellent and efficient web sites and IVR systems to take requested meter readings. For anything except a routine request, however, it seems to break down.
There are a few simple rules that need to be followed for self-care (whether web or IVR based) to work better. Firstly, design the flows from a customer viewpoint - think of minimising number of clicks or time taken, ease of use, escape routes. Secondly, design usage data reports such that you can tell what is working and what isn't. Thirdly, keep on and on reviewing how easy it still is to use after changes for new products, new processes, new journey flows etc.
We aim to deliver the same level of customer service to all of our customers
Unfortunately, this usually means dragging everyone down to the lowest common denominator. You should aim to treat every customer with the same level of respect and care, but not all customers are equal. This mantra is often an excuse for the failure to recognise customers who might have cause for complaint, or who are particularly valuable and should not be aggravated, or who are at risk of churn. These failures are usually for systems reasons - again, the inability to pull together the elements of customer data that can identify such conditions and warn the customer service operator.
Customer Service has such a bad reputation amongst the public at large - but we don't have to accept that 'industry standard' poor levels of service need to apply to our own organisations.
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