Saturday, November 21, 2009

Telcos, customer service and regulation

Thanks for asking, the paper I mentioned I was giving at the CPRF went well. While the paper will appear in a volume of papers there, it is already available under speeches on my website.

The paper didn't really reach very dramatic conclusions as my survey data wasn't large or random, resulting in limited ability to make conclusions about the significance of the findings. It does appear that service provider employees and consumers share the same views of what good customer service looks like, and that telcos don't provide it.

The new hypothesis I have is that there is a fundamental flaw in the model of a modern telco, both in the factory approach to customer service (or call) centres and the idea that telco products are too complicated for even the staff tpo understand them.

The latter was a theme in the paper following mine by Elaine Lally and David Rowe titled "Impossible choices: complexity and dissatisfaction" that builds on an earlier paper they titled "Preparing for a Broadband World". The paper was very good and concluded that confusion is an issue and the solution might be found in "choice architecture". This includes the stuff in the book Nudge that I was first alerted to by Lindsay Tanner.

The idea might be appropriate, but I return to the issue in my paper which is how do we get the appropriate behavioural change in providers to implement choice architectures. Legislation is a very blunt instrument for this.

It was strange to note therefore an article in this weekend's Australian Financial Review by Tony Boyd titled The Most Hated Companies: Meet the confusolpoly. In it Boyd recounts his own recent customer service experience and writes;

Optus says technology products are complex to administer and sometimes this results in confusion in matters such as billing or movement from one service to another. It admits it needs to lifet its game.

It is unclear whether this is a telco admitting that complexity is impeding its customer service agents or merely its customers.

The article continues to compare and contrast the responsess of the three biggest providers, and the "tough talk" of the ACMA Chair Chris Chapman at ACCAN CEO Allan Asher. It is Asher that uses the "confusoply" term invented by Scott Adams, but first applied to telcos in Australia by Joshua Gans (at an ACCC conference).

The ACCAN itself recently conducted a half-day seminar on Responsive Regulation. After a few set pieces by regulatory types, most of which focused on the general idea that their mission was to make markets work for consumers (the ACCAN plan) there were four commentators at the end. These provide the four "alternative" views to the thrust for competition in telecommunications.

The first is the group that simply believes regulation is a necessity and that, despite evidence to the contrary, it works.

The second is the simple rejection of "economic" goals instead of social goals.

The third is to focus on the 5% of vulnerable customers and argue that competition will ignore them.

The final one is that competition depends on marketers, and that their approach is actually anti-consumer as they prefer a confused customer.

The beauty is that there is a grain of truth in all of these, but that the real challenge does lie in the learnings of behavioural economics as noted by Lally. But it is not just a better underrstanding that consumers aren't the model of rational decision makers assumed in theory, but understanding that providers aren't either.

The one thing I know is that you can't regulate for improved customer service.

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