Better service – lower costs.Customer focus as the key to efficient and successful customer service in the telecommunications industry.
A joint study by Infosys Consulting and Kantar TNS October 2016
Better customer service is usually associated with higher costs. Reducing costs while improving customer service is often dismissed as just wishful thinking. However, this study by Infosys Consulting and Kantar TNS on the German telecommunication market shows that these seemingly contradictory goals can be achieved. The key is to align customer service processes to the wishes and needs of customers and optimize contact efficiency.
The results of the study show that approximately one in three telecommunication customers had to actively contact their provider more than once to receive a satisfactory response to their request. These multiple customer-initiated contacts may be necessary, or sometimes even desired by the customer, but they can also be annoying if the customer simply wants an immediate response. On average, mobile phone subscribers had to contact customer services twice, and landline customers more than three times, to deal with the problem. For the providers, this is an expensive process – these multiple customer-initiated contacts cost the German telecommunications industry approximately EUR 1 billion a year. It therefore represents enormous potential for optimization and cost reduction.
Why do customers need to contact customer service multiple times, which cases lead to positive trends in customer loyalty, which are particularly expensive and which can and should be avoided?
In order to find answers to these questions, this study examines the most common process of interactions between customers and providers (customer journeys) from the customer’s point of view. More than 3,800 private end-users were interviewed in the mobile and landline market in Germany.
The study also examines the relationship between multiple contacts and customer satisfaction. On the basis of the survey results, six proposals for changes are suggested in order to reduce unnecessary contacts.
These proposals lead to a renewed focus on the customer and an optimization of business processes. Together with supporting IT systems, this can help telecommunication companies create considerable potential for cost savings and give them decisive competitive advantages. Collecting regular customer feedback and optimizing processes quickly and efficiently are just two essential elements in creating competitive advantages across channels, including digital, and the continuous improvement of customer journeys.
KEY FINDINGS AS STATISTICS
Multiple contact rates cost German telecommunication providers EUR 1 billion annually¹.
These costs point to a considerable savings potential for telecommunication providers.
Too high rate of multiple contacts
Of a total of 210 million contacts a year, 127 million, or more than 60%, are multiple contacts.² There is a optimization potential for central customer journeys.
Offline before online
A total of 70% of landline users and 60% of mobile users prefer offline channels to online channels, The low use of online channels is an indication that current digital solutions don’t convince customers.
High risk of termination of contracts
Multiple contacts can become a serious risk factor in customer relationships. Up to 56% of affected customers indicate an intention to terminate their contract. Multiple contacts have a knock-on effect on customer loyalty.
¹ Costs for multiple customer-initiated contacts across the four customer journeys “order”, “change”, “technical issue” and “complaint”. Back-office expenditures not included.
² Customer needs to contact the provider more than once to get an issue solved.
Six proposals to
reduce the number
of multiple contacts
Improve scheduling and reliability; e.g. service technicians and deliveries
Simplification of product installation
Predictive analysis applications for technicians and improvement of instructions (e.g. digital assistance) for self-installation.
Improvement to customer journeys for technical problems/disruptions
Better use of existing information to find solutions.
Resolve complaints quickly and conclusively
Channel complaints correctly and forward them to expert teams.
Keep the callback promise
Use established tools particularly geared to outbound sales that also function reliably over shift changes.
Use of customer feedback
Encourage the flexible adjustment of processes; e.g. through transactional feedback systems.
About the study
A representative survey of more than 3,800 private end customers was carried out in Germany to identify and analyze the customer journey. This serves as an empirical basis for the current study. As usual, the number of households in Germany (40 million) was taken as a basis to calculate the results for the landline market. For the mobile business, the number of people in Germany over the age of 18 (60 million) was taken as a basis and the customers were asked to state their main provider as some had several contracts.
About the authors
Tom Lurtz is an Associate Partner and Head of the Communication, Media & Entertainment practice at Infosys Consulting.
He has many years’ experience in the telecommunications industry and the reorganization of customer services areas as part of mergers & acquisitions, as well as in the customer-driven implementation of new products and solutions. His main focuses are customer-oriented corporate leadership, organizational design, process optimization and product development.
Consultant for Digital Enterprise
Reik Reinhold is a consultant for Digital Enterprise at Infosys Consulting.
He has wide-ranging experience in the telecommunications and manufacturing industries, and specializes in customer-centric process design and service-oriented corporate culture. Reinhold’s consulting expertise is grounded in a degree in industrial services management and business administration with a focus on strategy, management and marketing.
Jan Gottstein is Principal Consultant in the field of Communication, Media & Entertainment at Infosys Consulting and specializes in customer strategies.
He has worked for many years in customer experience management with a focus on the telecommunications industry and new media. His primary expertise lies in customer loyalty measurement, customer journey mapping, process optimization, customer centricity, CRM and customer data analysis.
Strategies for Successful Change Management
Change coaching as a key for creating the organizational mind-set to drive long-term value.
Learning to be More Human – A Skills Mandate for 2020
Holly Benson, Vice President and Managing Partner, Infosys Consulting