Telecom companies are doing everything they can to retain customers, still the churn remains high.
The findings of a recent customer satisfaction survey conducted by Accenture were startling: No less than 86 per cent of the respondents had left at least one major service provider in the past year. The global figure was 67 per cent. Clearly, dissatisfied customers switch banks, Internet service providers and wireless carriers in India very frequently.
“Customers want good service, and the ability of companies to deliver is not meeting expectations. It’s easier to switch, given the high degree of competition and better information. So, more people are switching and they’re switching more frequently,” says Accenture Managing Director (CRM service line) Woodruff Driggs.
At least the mobile services operators in the country are aware of this problem. “Customer retention is very difficult in a market that is highly competitive and it takes more than just advertisements and incentives,” explains Vodafone Director (marketing and new business) Harit Nagpal. According to him, there are four factors that make customers stick to a service provider: A good network, service recovery, technology and great value for money.
Thus, Vodafaone, which has 64 million subscribers in the country, has decided to bet big on human processes. “We want our executives to anticipate problems and issues and we expect 90 per cent of these to be resolved online,” says Nagpal.
“The service has to be delivered to a customer. And as an operator, we believe the key is to provide multiple accesses to users — on the Internet or stores within walking distance.”
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Vodafone executives at its call centres as well as the front-end are put through a mandatory training programme for a few weeks, which includes both classroom and on-the-job experiences. Furthermore, these employees have to often go through refresher courses.
Tata Teleservices too emphasises its customer relationship. In line with that, it has created a Customer Relationship Council, an industry-first forum of people of eminence from all walks of life which will evaluate its customer service. The council will also provide insights into competitive activity that may impact the company and provide honest and transparent feedback on key customer service initiatives.
To cater to its 33 million customers, Tata Teleservices imparts training to its dealers, distributors and employees. The day a new dealer or retailer comes on board, the company shares with him customer behaviour and its nuances.
Giving the movement more impetus are the various customer relationship programmes that the company has started. The first is the Anubhav initiative, which hopes to increase overall sensitivity towards the end-customer and work towards key customer pain areas. Pulse is another programme designed to get a first-hand feel of what the customer expresses and experiences during his/her interaction with the organisation. On top of that, there are other touch-point programmes at the circle level, wherein customers get to meet company executives and address the issues that they face with its services.
On the other hand, market leader Bharti Airtel is betting big on its bundle of integrated services that include telecommunication, direct-to-home and broadband services. “Across the mobile platform, we are finding that our customers want a unified experience,” says Bharti Enterprises Director (technology & customer service) Jai Menon.
Bharti Airtel wants to empower its 91 million customers with self-service. “For instance, if one presses star, 121 and hash, pretty much all their queries can be addressed,” says Menon. Still, he’s not taking any chances at the back-end. Menon and his team have equipped their BPO’s with tier 1 global strategic partners.
Is that good enough? Probably not. According to Driggs, Indian respondents were most frustrated with having to call customer care executives many times for the same reason. “Our advice to Indian companies is to differentiate your brand premise first and make sure you consistently deliver that,” he adds.
Tata thinks it has got it right. “Earlier, the focus was on targeting numbers and acquiring customers, with the aim of attaining a large market share. Now, the customer experience is the most critical driver for us,” says a company spokesperson.
Driggs believes that is the real challenge. “High-performing companies are doing detailed research. They are segmenting customers based on attitudes and behaviour and studying in detail what experience those segments expect. Then they provide the very best segments with the best experience.”
Nagpal agrees, “We look at the billing and longevity of a customer and accordingly provide service, which includes faster service and quicker turnaround time.” Tata Teleservices feels that can be done only by offering differentiated products and services that sets one operator apart from the others.
So, if companies claim to have all the mechanisms in place, how do they explain the dissatisfaction among telecom subscribers, where the churn hovers around 25-30 per cent?
“Companies have been designed to push products as opposed to thinking about the end-to-end experience and the sum of all the interactions customers have with the company. Customer experience used to end at the cash register, now it begins at the cash register,” says Driggs.
On the customer front, Driggs puts it down to changing demographics, which is about people who have more money and less time. Naturally, a feeling of restlessness and impatience sets in. Moreover, the Indian consumer is now a global traveller, either in reality or virtually.
Typically, it is the pre-paid segment that is the prime mover as far as new subscriber additions are concerned. That has been a predominant trend in the industry with over 90 per cent of the overall subscriber base in the Indian telecom space coming from the pre-paid segment. A typical reason is that the Indian mobile phone user, as a trend, likes to be able to control his spend — and the best answer to that is “pre-paid”. So customers will follow high value.
On the contrary, at times retaining a segment of customers is not viable for a company. “It’s a cat and dog game. Companies need people to use infrastructure and hence the lower-than-ever rates. What they really need to do is map acquisition costs: Cost to keep a customer running and finally the switching cost,” says an independent industry expert. “Make sure you keep a customer till you make a profit. If churn has to occur, let it happen after that. And try your best to retain those customers who yield high revenue,” says he.
Bharti’s Menon has a different take: “We follow a different model that is based on revenue per minute, cost per minute and margin per minute, we don’t segment out customers.” Clearly, the erstwhile two-pony contest is now an open marathon.