Telecom’s Forgotten Competitive Advantage: Customer Service

- June 7, 2010 by Julie Dorbandt 

While all the big carriers are fighting over the same claims of coverage, phones and price, becoming the industry leader in customer service represents a huge opportunity. 

In the telecommunications industry, rewarding good and loyal customers is usually an afterthought, a PR tactic or a one-off direct mail campaign. The industry is notorious for gobbling up new customers and abandoning them as soon as they sign up for service. With whole organizations designed and built around acquisition and sales, there are very few with retention strategies, processes or even teams in place.

It’s understandable why carriers have focused on gross adds instead of net adds or churn over the years, the most popular metric to tout is number of subscribers. But that model just doesn’t make sense anymore – strategically or financially.

According to the CTIA, wireless penetration in the US grew from 69% in December 2005 to 91% in December 2009. To respond, the carriers have shifted their efforts from a pure acquisition focus to stealing subscribers from other carriers touting coverage, phones and lower prices. This is the war we have watched being played out with unlimited everything plans, coverage map commercials and the constant barrage of new and exclusive phones.

Instead of focusing on who they don’t have, I believe the game changer lies in focusing on who they do have. Can you name one wireless or cable carrier that comes to mind consistently when you think “good customer service?” There is a huge opportunity for one of these carriers to become the epitome of customer service and loyalty.

• In a recent survey of cable subscribers, respondents stated that it takes only two occurrences of bad customer service before they become likely to change their opinion of the service provider to one that has poor customer service.
• Respondents aged 24 to 29 are more likely to alter their opinion of a service provider with just one occurrence of bad customer service. As this age group (and younger) gets older, the tolerance for mediocre or bad customer service will be even less than it is today.
• More than 10% of respondents said they would write about a good customer service interaction on a social media site. This statistic nearly doubled for a bad customer service experience (i.e., a service disruption).

In the past, a bad customer service experience was shared with friends and family by word of mouth – an important but very small sphere of influence. With the advent of social media, one bad experience can spread worldwide within minutes and cause a company to lose customers and reputation.

Most carriers have some sort of loyalty/reward program in place and a customer care team that answers the phone, but most likely these efforts were created as a last-ditch effort to save the frustrated and fed-up customers from voluntarily churning off. The change I am advocating is for a customer care and loyalty program that focuses on keeping the existing customers satisfied. A focus on customer service will lead to customer satisfaction and a reduction in churn.

Dig this article? Get similar content sent straight to your inbox by signing up for our monthly e-newsletter below.