When a Smart Phone Was Too Smart: Why a Major Telco Bucked the Technology-Buying Paradigm


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In the 1980s, implementing technology meant simply setting up desktops or installing an internal email program. But with today’s intricate systems, merely asking, “What product do we want to buy?” is not enough. Savvy executives are approaching the technology buying decision process quite differently—and getting unprecedented returns on their investments.

Some of those executives lead a large European telecommunications company whose brand had been built on customer experience as a differentiator. While the company grew to more than 4 million customers in the United Kingdom alone, the executives’ goal was to turn it into a worldwide virtual mobile network operator based on always delivering an ideal customer experience. And much of that was through 1,000 customer service agents. Executives knew the agents were the face of the company, the brand ambassadors who were responding to 25,000 calls, 50 letters and 600 emails a day.

Within six months of adopting the new system, the telco saw handset exchanges drop by 38 percent.

But the company hit a snag with its handsets. Because of the large variety of handsets to choose from and increasingly complex features—handling everything from email to games—customers were confused about how to use features and services. And agents were finding it difficult to provide great customer experiences. They did not always have the information they needed to help. In some cases, getting the information took a long time; in other cases, there wasn’t any information available to the agent to solve the issue. Some agents had collected answers to certain issues and kept a running spreadsheet. Even when they shared those answers, the answers did not apply to all handsets.

And when customers tried to handle their issues with self-service, they could not find relevant answers. The company’s web site contained information that was too generic or that didn’t make much sense to customers dealing with specific problems with specific features. That drove irritated customers to pick up the phone. Call times increased; customers were often kept on hold while the agents worked on resolving the problem; and many calls were transferred to specialists. Agents, watching the call time escalate and knowing they were going to be rated on call length, were in a very comprised position.

Frustrated, customers started returning their handsets. This was not the customer experience they had been promised by the brand, and as a result, the brand began to suffer.

The executives knew that products and services would only get more complicated over time. The surmounting challenge to deliver great customer experiences was now at the mercy of delivering cost-effective customer service. It seemed as if the two goals were at odds.

Root cause

Then the executives looked at the root cause of the customer service problems and concluded that the contact center’s current knowledge management capabilities were not following best practices.

The executives wanted to improve customer experiences, which would lead to increased customer satisfaction and loyalty and at the same time do three important things:

  • Increase agents’ job satisfaction and reduce their stress
  • Reduce the number of returned handsets
  • Decrease customer service costs

They felt that if everything came together, it all would restore and then enhance the brand’s equity. This would be especially true if their competitors were not able to do the same thing.

The contact center directors and managers developed a business case, showing how a change in people, process and technology (and not just buying technology) could affect the strategic goals. They were cautious about overstating the return on the investment for an improvement, so one of their benchmarking goals was a conservative reduction in handset exchanges by 5 percent over three years.

With that work behind them, executives could now turn to the technology, itself, and evaluate the choices based on which would help them meet their strategic goals. They looked not only at technological capabilities but also at the likelihood that agents, customers and the business at large would adopt the technology.

The company opted for a pilot implementation—something that is becoming more popular than the long, drawn-out RFI and RPF process—as a proof-of-concept to see what the system could actually do. The company wouldn’t be relying on marketing promises but, instead, looking at whether the system would actually meet the business goals.

The telco’s executives identified the most expensive calls—those for handset exchanges or calls that had to be escalated to a specialist team—and its vendor built a working pilot of a knowledge base in two months. The company set up a control team to measure the differences between agents with and without the new solution.

The new knowledge management system and process guided agents through customer interactions by providing the information they needed to deliver consistent, quick and accurate answers. When agents received a call about a problem using the handset’s Internet browser, they would now enter in the handset model on their screen and then type in “set Internet browser.” Step-by-step instructions led agents through a list of questions that helped them see what was wrong with the browser and help them then step the customer through the browser settings.

The pilot was a success. The company met and then exceeded its initial business case goals, and executives had data to prove that implementing the system throughout the entire contact center was worth it. Within six months of adopting the new system, the telco saw handset exchanges drop by 38 percent.

The questions agents asked in the resolution process resulted in a diagnosis that was 30 percent more accurate; more agents got to the root issues faster. And the number of calls transferred to specialists dropped by 19 percent.

And while the original business case had predicted a payback in less than three years, executives were pleasantly surprised when the investment paid off in less than 12 months. What better argument for dealing with people and process issues before technology can you ask for?

Agents had the answers they needed, which also enabled them to take ownership for their calls. That, in turn, improved their self-esteem. They told supervisors that they felt “really great” that they were able to actually get customer issues resolved. Agents were happier and more patient with customers. Happy agents. Happy customers. Fewer calls. Fewer handset exchanges. Lower agent attrition costs.

The emphasis needs to shift from asking what technology you should buy to asking how the technology might affect people: your employees and your customers. When technology is the first consideration, you may waste a lot of money and resources while you miss the large financial returns and business goals.

For more information, see my Forrester Research paper, Customer Service: A Keystone Of Your Corporate Revenue Strategy, (May 8, 2008).

Natalie Petouhoff, Ph.D.
Natalie L. Petouhoff, Ph.D., is VP in Service Cloud helping customers to understand the importance of Service Customer to the whole brand, including marketing, sales, engineering and guiding customers to disrupt what they have always done and transform the tools and processesagent's use to service customers and the overall customer experience. The author of four books, she often appears on TV to provide insight from more than 20 yrs of leadership experience. She helps companies to create their customer service strategies and calculate the ROI.


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