Customer Service: It’s Not Rocket Science

My firm, ATLANTIC-ACM, recently released a white paper looking at wireless trends. The report brings up an obvious, but often overlooked, recommendation for wireless carrier management: Differentiate your company. U.S. wireless carriers, whether of the prepaid or postpaid variety, all rely on the same core selling points of lower prices, network quality/coverage and/or exclusive handsets in their marketing efforts. Perhaps carriers (particularly postpaid carriers) could benefit by shifting their focus toward something slightly less materialistic and more material to their bottom lines — customer service.

Once the poster child for customer dissatisfaction, the wireless industry has made gains in recent years, at least on the surface. A Government Accountability Office study released in November found that 84 percent of mobile phone users are at least somewhat satisfied with their mobile carriers. However, there is ample evidence that this is phantom satisfaction, based largely on improvements in network quality, with respondents translating satisfaction to the lowest common denominator: the reliability of connections. In fact, concern is rising in the other key areas of billing, contract termination fees and customer service.

The reality is that network issues (which are becoming relevant again in the wireless data/wireless broadband environment), ongoing billing frustration and customer service representatives whose attitude toward customers reflects the fact that they work for companies that levy heavy penalties for service termination, collectively and inevitably lead to customer dissatisfaction. As postpaid providers struggle to convince mid-level customers to sign long-term contracts at price points much higher than prepaid plans that are, at least on paper – and more importantly, mass marketed as – virtually identical, they must offer more than just the promise of fewer dropped calls and slightly better handsets.

This improved customer experience could take a number of forms, but the general objective should be to reduce customer pain points and to promote a sense of value in exchange for signing contracts. A few possible examples could include:

• Overage Warnings: While overage charges are becoming less relevant due to unlimited plans, they still exist, and most carriers bill exorbitant per-minute rates. Advising customers when they get close to their plan limits, thereby allowing them to mitigate their financial exposure to overages, would not only avoid outrageous situations like the now-famous $18,000 cell-phone bill, but would also go a long way toward generating some good will with postpaid customers. Wrap an instant-upgrade offer for a new plan into the process and a negative (overages) can be turned into a positive by carriers presenting themselves as customer advocates.
• Reward Loyalty: Offer existing customers better renewal incentives than new customers. Once a carrier has a customer, it should do everything in its power to keep that relationship. I personally have more than once been told by a carrier that I could not take advantage of a special offer because I was an existing customer. As the president of a research firm with a deep customer satisfaction practice, the shortsightedness of these types of situations eats at me. The carrier next door has similar incentives and to it I’m a new customer.
• Offer Peripheral Perks: If a carrier has a network of Wi-Fi hotspots, it would be crazy not to let its wireless customers with Wi-Fi handsets use those hotspots for free. Only a fraction of customers will use this offer to any significant degree, and every megabit that travels over Wi-Fi is one less over the increasingly stretched wireless network.
• Offer Shorter-Term Contracts: Most phones are either obsolete or physically destroyed well before the two-year contract is up. Offer a slightly smaller phone subsidy, take a one-year contract, and give an incentive if the customer extends it or renews it.
• Stand Behind Phones and Smart Devices: From the customer's perspective, the differentiation between the hardware manufacturer and the network operator is virtually nonexistent because the hardware is purchased from the network operator. In other words, like it or not, the customer holds the carrier accountable for the performance of the device he/she purchases from that carrier. Being a little more flexible with problems that occur after guarantee windows can help to hold on to customers that might otherwise jump ship over device frustration.
• Make Customer Service a Service: Offer a variety of customer service functions that encourage customers to come in to stores or register online.

A few carriers have taken some of these steps and, overall, the wireless customer service experience has become much better than it was just a few years ago. However, too many customers still see their wireless carriers as necessary evils as opposed to partners who exist to support them. A carrier that can deliver a different experience may help midmarket customers justify paying more for service — even if they rarely access the service benefits that brought them to that carrier in the first place.

Fedor Smith is president of ATLANTIC-ACM, a provider of strategy research, consulting and benchmarking services to telecommunications and information industry companies. An expert in niche- and channel-based marketing and operations management, Smith specializes in customer satisfaction and benchmarking projects for ATLANTIC-ACM, where he oversees proprietary projects as well as the firm's Carrier Report Card series, which serves as the telecommunications industry's principle source of benchmarking tools.