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Is It Time to Sign the Death Warrant of the Telco Call Center?

Tue, 03/05/2013 - 10:39am
Mike Betzer, Senior Vice President and General Manager, Lithium Technologies

Call centers are a huge drain on resource for telecommunications providers. Management can be a bureaucratic nightmare, costs can be extremely high and hard to plan for, and many are now outsourced to the developing world, often causing customer dissatisfaction. 

So what’s the answer? It’s time for telecoms to wake up to the power of social media. In all of its varied forms.

Social is interwoven into the DNA of modern smartphones but social media to date has not been ingrained into operators.  In fact, mobile operators are often dangerously illiterate when it comes to social media.

It is shocking that for the majority of telecoms their social strategy does not go beyond a Facebook page or Twitter handle. In fact, despite social CRM being one of the hottest topics in telecoms and a plethora of transformation of projects being undertaken by them, over 70% of spending is still focused on more traditional CRM (April 2012, Gartner).

Engaged in a constant arms race, telecoms are battling on price and struggling to generate new ideas and to attract and retain customers while trying to keep OPEX under control. By winding social media into their DNA they can not only cut customer support costs by 50% (Feb 2012, Gartner) but can also retain, engage and ultimately make their customer relationships more profitable.

Despite tying more people into contracts with smartphones, churn rate among telecoms is still high, so much so that Gartner predicts the marketing budget allocated to retaining customers and increasing loyalty through customer service will more than double by 2015.

Telecoms know this is a problem. A report we recently published here at Lithium in conjunction with Telesperience that surveyed 41 global operators, found the top goal for 83% of telecoms was to increase customer loyalty, with 54% citing customer service as their top goal. 

Worryingly, only 5% rated their customer service as excellent, unearthing a vast disparity between the importance telecoms place on customer service and how well they actually perform. It seems that the problem has been identified, but they have yet to solve it. 

It’s not all doom and gloom however.

On a positive note there has been improvement, with 95% of telecoms planning to maintain or increase social media budgets in the near future – a sign that they are coming around to the significant benefits of implementing a social customer experience.

Regarding benefits, robust customer service programs will actually impact the bottom line (according to the survey). Telecoms using social to transform their customers’ experience actually saw a huge reduction in support call volume over the course of 2012.

Another part of the issue is that R&D within the majority of telecoms is stifled by cost cutting and a general unwillingness to innovate and experiment. They are subsequently being outpaced by agile players and new market entrants.  

Let’s face facts. The way telecoms deal with customers is out of date. The typical strategy focuses on an expensive call center that puts, often erroneously, business efficiency ahead of customer satisfaction. 

It’s time for telecoms to refocus and place their trust in social communities. Social communities offer telecoms an opportunity to have real, meaningful engagement with their customers.

Social communities let telecoms develop peer-to-peer support and cultivate a new customer workforce. Instead of speaking to people thousands of miles away, customers interact with peers who share similar experiences and problems. This social strategy lowers costs – Gartner estimates by up to 50% -  improves customer relations and creates an army of superfans who support a the business. Intelligent operators realize social communities are the future of their business while call centers are the past. 

Indeed this has already begun in the US, with 64% of telecoms (according to the Lithium study) actually driving conversion through their owned social hubs and 73% of telcos using social to transform the overall customer experience. As a result of social, 18% of telcos were able to reduce call center costs in 2012.  

Case in point is Telstra, who has been able to reduce call center headcount while not only maintaining but actually improving customer service by leveraging its social communities. Or AT&T, who engages millions through its online social community, a move that has yielded a 16% improvement in call deflections.

Cut churn and up revenue by earning customer loyalty 

Operators can often be perceived as seen as corporate behemoths, which doesn’t exactly promote brand affinity. By truly opening up to their customers via social media they can change this negative perception. Due to operators’ utility status, customers are inherently not loyal. 

One of the best ways for telecoms to change course is by cultivating a base of loyal customers who will help answer customer service questions, advocate on behalf of the brand and help generate external love for the brand. For example, mobile operator Giffgaff uses its customer community to keep customers happy and turns them into superfans. Today, 100% of customer questions are answered by its community in an average time of 93 seconds, which has a whopping 84% customer satisfaction rate. 

Generate new revenue with R&D led by customers 

Telecoms can tap into the creative power of their customer base with social creating an entirely new revenue stream by crowdsourcing new ideas. In the US specifically, 82% of telecoms are actually already doing this, outreaching directly to their customers to see what their pain points are, what they’d like to see offered in terms of products and services. 

Verizon, for instance, collaborates with customers to design and build products that are community-suggested. In less than one year, 1,700 customer ideas were submitted, while 250 are in progress and 31 have been implemented. 

Let’s face it: Social media isn’t a fad… it’s the future. The time for testing the waters has passed. It’s the way your customers live their lives today. 

It’s time for telecoms to wake up social media, start taking it seriously and use it to reinvent their outdated, inefficient customer service processes. Social should be the standard start for all customer interactions.  Then leverage the channels that the customer wants, not the channels that the company has always used.  

Download the full Telecom Social CXP 2013 Benchmark Study at: http://pages.lithium.com/telecom-customer-experience-2013    

Mike Betzer is senior vice president and general manager for Lithium Technologies. 

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