First-quarter results of the American Consumer Satisfaction Index (ACSI) came out this week, putting Sprint Nextel and Verizon Wireless on top of the pack. While tying scores of 71 are impressive, some wonder whether carriers could be doing an even better job.
Lara Albert, senior director of Global Marketing for Globys, a company that provides analytics for the telecom industry, suggests that carriers could be putting their own data and insights to better use in the interest of their customers' happiness.
"Sprint's perspective is driven by a top-down approach," Albert points out. "Dan Hesse puts a company-wide mandate out and ties everything from incentives to employee compensation to that mandate," she says, adding that while partially effective, it's not the ultimate fix for a very complex problem.
Albert says that carriers tend to see a lot of waste and "over-delight," as she calls it, which is unnecessary if these companies took stock of their customer data and put it to good use.
Conceding that customer service ultimately has to be seen in the light of profitability, Albert outlines three main pillars of the equation: ARPU, churn and retention. She argues that all three would be better served on a customer-by-customer basis.
As it stands, carriers tend to view customer service as a marketing play, addressing their subscribers with segmentation schemes and calendar-based offers. For instance, all customers might get an upgrade offer when they're within two months of their contract expiring. But what if 25 percent of your customers aren't interested in upgrading at all? And what if 20 percent of those approached with that upgrade offer are turned off by your aggressive solicitation?
It's a problem that Globys and other analytics companies have long been saying they can address through better use of a carrier's data.
Albert says everything comes down to providing customers targeted offers and information that suit their individual wants and needs, eliminating much of the waste associated with marketing strategies that are too broad to be of use to many customers.
"For a lot of carriers, it's jumping over the dime to get to the penny and in many cases the penny is gone by the time they get there," Albert says, referring to the way carriers currently approach the problem from a top-line revenue standpoint.
She says that in many cases, customers are oversold by customer service reps looking to meet quotas that serve a top-line revenue model. The end result is usually a customer who is unhappy with the price of their service because they're not using half of what they're paying for.
Albert says the technology and data is there for carriers to reduce churn, but adds that in the end, they have to be ready to drop the blind drive towards higher ARPU.
"Can you imagine the reaction to a customer who tweets that their carrier just proactively reduced their bill by $7 a month because they weren't using the services they were sold?... I mean that kind of thing is just unheard of, but if you're that carrier, wouldn't you rather retain that customer than have them go somewhere else because they were oversold?"