My local newspaper, the Kölner Stadt Anzeiger has a couple of interesting articles and an editorial – Streit um Telekom eskaliert, Service-Offensive im Millimeterschritt and Verfahrene Situation (German language) – about T-Mobile’s disagreement with the customer service workers’ union Verdi.
T-Mobile is in deep trouble. It needs to cut $1Bn of costs annually to stay competitive. It also needs to improve customer service to reduce customer defections. Its customer service was berated in a recent Kundenmonitor Deutschland 2006 study. Undeterred by its poor showing, T-Mobile wants to become one of the ‘best service organisations’ in Germany by the beginning of next year.
The solution T-Mobile management is proposing to achieve both aims is to move 50,000 service staff to a ‘holding company’ which will guarantee their jobs until 2010. The quid pro quo is that staff will have to take a pay cut of 12.5% and work longer hours. The apparent logic of René Obermann, the recently installed CEO goes along the lines: T-Mobile’s customer service is uncompetitive. It pays too high wages for too few hours worked compared to other service organisations. Ergo, for T-Mobile to become competititive in its service, it must reduce wages and increase hours worked. This is only possible by outsourcing service staff to a holding company!
And this is supposed to motivate staff to go the extra mile for customers?
Staff have already signalled their resistance when 30,000 took part in a recent warning strike.
T-Mobile does have to take some tough decisions, but it strikes me that this logic is fatally flawed. T-Mobile as the ex-incumbent still carries many of the inefficiencies it inherited from its protected government ownership days. But expecting hard-pressed service staff to increase their motivation under such conditions is simply untenable. Obermann may be able to force through the changes as he threatens, but customer service will likely take a huge knock as a result. As a T-Mobile customer with a number of service disasters behind me, it looks like I can look forward to even less service in the future.
What do you think? Is T-Mobile thinking wishfully? Or should staff just bite the bullet and accept the inevitable?
Post a comment and get the conversation going?
I work for T-Mobile and I think there logic is completely off. I’m a single parent mom, and they just cut everyones hours. Full timers can work no more then 35 hours a week, anything more will be considered overtime and you will be written up, and part-timers can not exceed 20 hours. Though I am only working 35 hours a week my hours have increased to 10 hour days. Very discouraging I’m loosing a lot of money and time because of the cuts… I’m very unhappy.
Thank you for your comment. It is much appreciated.
I feel for you as a staff member at T-Mobile. Whilst Deutsche Telekom does have to cut costs to become more competitive, it is in the interests of all parties to do it in a way that doesn’t alienate staff, customers and German society in general.
From all that I have read, it seems that Deutsche Telekom is seeking to reduce costs at a pace that is only in the short-term interests of shareholders and senior management (that get to keep their jobs if they succeed), but not in the longer-term interests of anyone else and probably not in the interests of Deutsche Telekom as a going concern either.
Deutsche Telekom seems to be in denial that its approach will have unforseeable negative consequences.
For example. I attended the Customer 2007 conference in DÜsseldorf yesterday. One of the speakers was from T-Com, the fixed-line arm of Deutsche Telekom. Throughout his presentation, despite talking extensively about the importance of customer satisfaction, not once did he acknowledge that satisfied staff are a pre-requisite for satisfied customers. Moreover, customer service was presented as thought it is a privilege, to be earned through having a high customer value, not a right, earned through the exchange of money for telecommunications services.
Troubling times are ahead for Deutsche Telekom.
On July/6/07 I went to T-Moble on Montwood dr El Pao Tx, phone 915- 855-4744 and purshased three phones. The rason I choosed t-Mobile was because I asked the store manager if the phone calls from T-Mobile to T-mobile to Santo Domingo were free. I did asked him around seven times and right after I left the store to make sure that my daughter will be able to contact her friend free. On July 20th my service was supended due to unsual activity. I did call and find out that my account went up to $900.00 dollars. I explained to the customer service lady that the store gave me the wrong information, inclusive I mentioned to the manager that Santo Domingo was considered international and he continue confirmed that from T-Mobile to T-Mobile the calls were free. Friday right after work I went to store to request an explanation and he came with the story that he thought that Santo Domingo was part of Puerto Rico.He stated he will contact the regional manager and call me today. When I came from work I called and one of the workers told that he was very busy today. I left a message and he never call me back. What I need to do to have this situation solve? I am the only income on my home and the situation is very stressful.
Maria L. Garcia
I call the the T-moble service pretty hot about my phone bill but was greeted by this lady on the phone name Amity employee #7131624, anyway i explained to her that my bill was slightly higher and i wanted to know why. Se was so kind, understanding, considerate and of course helpful. She quickly defuse my maddness with helpful info and also let me know of few more option on how i could save money on my phone bill. I am a very hot headed and short tempered person when it comes to screw ups with my money but she handled me like a champ. If all your associates were as professional, patient and kind hearted as she is you would have not only, a award winning staff but the best customer service in the industry. Oh by the way I’m also in sales and that was great customer service. Thank you for having a person like that on your staff.
Ron Long Corpus Christi, Texas
For two months I was made to feel like I was crazy by your Costomer service and I’m still not sastified. I still haven’t gotten a straight answer to the night mare my husband and I lived on July 13, every time I called and talked to someone I had to relive it again and again because you never can talk to the same person. They tell me they did and investagation well if they did I would like to know how cause they never talk to my husband or I and the infor in right on the bill that they need to prove it and there still calling it a calling forwarding problem now . First it was fraud now who know what it is. I would really like to talk to some one who is in charge and really find out what was done. Thats another thing I ask to talk to someone of importance and could never get past a supervisoe.
It’s a tough one, this because you have to provide excellent customer service to retain your customers. But if you don’t do that super efficiently, with price levels as they are (and I think they are too low to sustain quality delivery of service to customers these days) you lose money in the long run.
Cutting customer service budgets as an isolated reaction, if this is the case, will result in a self-fulfilling prophecy of continued decline in service levels.
The challenge is look at the processes and supporting IT architecture and find efficiency improvements that generate happy customers as well as save money. Perhaps even with some extra money to be able to pay customer service agents a bonus when service levels are met.