Monday, September 27, 2010

Customer service in Telecoms

In a press release announcing the publication of submissions to the Reconnecting the Customer inquiry the ACMA chair Chris Chapman let industry have it with both barrels, saying;

There has been a healthy response from members of the public and consumer representatives. But frankly the response from industry falls short of what we had expected, given the early positive signals from industry chief executives.

Too many of the submissions were little more than reiterations of the current self-regulatory framework and cautioned against any regulatory intervention. I was surprised the telcos did not come up with more constructive solutions to issues they admit are major problems.

I look forward to the industry stepping up with positive proposals to remedy the problems.

I personally find this quite depressing because industry did seem to be initially grappling with the issues. (The submissions don't actually seem to be there to download right now).

However, it can in part be that this is a reaction by industry to the direction of everyone else. The only consumer submission I have seen thus far is that from ACCAN which seems to equally only parrot a decade's worth of comments and rests on a conclusion of the need for more direct regulation.

My own view is somewhat nuanced. I've previously written that, while everyone lumps co-regulation and self-regulation together, that in reality we've never actually tried self-regulation. I also have a view that to try self-regulation may involve some "reverse onus of proof" activities and some programs designed to actively facilitate comparison of offers, views I've shared with industry.

The report in the SMH said that Optus "rejects the hypothesis expressed in ACMA's paper that systemic and enduring customer experience issues do exist", while VHA and AAPT "criticised the ombudsman complaint process."

Meanwhile Telstra said "higher expectations from customers had pushed up complaint levels in recent years," and added it "does not believe the current challenges impacting customer service and complaint handling warrant regulatory intervention."

Which is all really interesting, except that telco customer service really does suck. I remember a great line from AAPT when we embarked on the journey that included the re-branding, the Tell It Like It Is campaign and ultimately Hyperbaric (see note below). CEO Jon Stretch crafted the line that "being the least bad in the industry does not mean you are good."

In the CommsAlliance submission they resort to quoting the ACMA derived stats on "customer satisfaction". However, inside the industry they don't use customer satisfaction scores as there is a case that they are not good predictors of commercial success (see second note below). Instead they use a thing called a Net Promoter Score. A study by Engaged Marketing in 2009 compares the NPS for a few service industries - the averages are detailed in the graphic below.

The poor performance of the mobile networks replicates the data from Mark Ritson in 2006. (see also).

The Australian telcos can perhaps take some comfort from a comparative study that suggests there is a "cultural bias" in Australia that means we expect better service (but don't tell that to the tourists who usually complain about abysmal service standards in Oz). It does not however absolve them from the comparative performance across industries.

It is disappointing that the only counter-data is a member survey conducted by ACCAN. This survey had a very small response rate (45 respondents) and the nature of the questions allowed the answers to revolve around things like "overseas call centres".

To this could be added my own research exercise. This had a slightly higher number of respondents and used a methodology on building on a description of a "quality service provider" already developed by the Consumer Council of ACIF. That research identified that the important areas to consumers in which performance was worst were;

* The service provider is proactive in managing quality, and prompt to repair faults.
* The service provider delivers when and what they say they will, with simple instructions on how to use the product.
* The service provider exhibits ‘best practice’ by being open and transparent in its operations, by taking accountability for its actions, its products and services and its commitments and by being credible; acting with integrity.

These may seem amorphous but really are just degrees of being responsive. These can be contrasted with the four high ranking issues in the ACCAN research;

* Multiple transfers to get to the right person to deal with your issue
* The cost of contacting customer service (e.g. when calling from a mobile)
* Poor access for people with disabilities
* Outsourcing of contact centres overseas

Ultimately the issues are slightly more complicated, they relate to the way products and services are marketed. The "confusopoly" is now confusing the IT department and the customer service staff.

Finally, I attempted another online survey recently that only had 37 respondents. This asked two questions, how good was the level of customer service in various industries and whether it had improved or declined in the last twelve months. Zero is acceptable/no change, negative is poor/got worse and positive is good/got better.

Industry                 Service
                             Level                 Improved
Airlines                 0.31                    -0.28
Banks                 -0.11                    -0.03
Health Insurance   0.24                    -0.21
PC & Elect Retail 0.11                    -0.24
Grocery Retail      0.32                      0.22
Telecc SPs          -0.68                    -0.31
Property insure     0.17                    -0.06

That is telco service providers have comparatively the worst standard of customer service and the perception is it is declining.

Ultimately the telco customer service conversation needs to be engaged in better by all.

1. Customer satisfaction as a single shot number is a poor measure because it really maps the gap between expectation and performance.  Consumer expectation is learnt, and hence declines as performance declines.  As a consequence customer satisfaction tends to trend around 70%.  The NPS asks people are more direct question of whether they would recommend their provider and measures the promoters (9 and 10) minus the detractors (1 to 6 (r is it 5)).  The other alternative to get meaning into customer service scores is to measure them across industries or to ask whether it has improved or not.

2. Unfortunately this was another case of AAPT changing strategies mid-stream.  Before hyperbaric had finished it morphed from being all about the brand promise and tried to be about cost saving.  This was despite the project having some serious project management around t.  Unsurprisingly when you change the objective mid-project you achieve neither the old or the new objective.

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