15 May 2008

Customer Service IS Marketing

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Blow me down with a feather, if I didn’t get a call from Orange, my mobile provider yesterday.

I was surprised because usually when I need to get hold of them it’s a nightmare.

When you call them you have to navigate up to five layers of computerised options, none of which ever seem to offer the alternative you are looking for and all of which are constructed to try and lead you to a pre-recorded message rather than a real life operator.

If you make it through that part of the maze, you have to input letters two and four of your telephone password. Obviously this is just a way to put one more barrier between you and a human operator. You can tell that because once you actually do get hold of an operator, they still have to ask you for your password again.

That fact alone says so much about Orange’s view of its customers.

But there are still two more hurdles before human contact. The first is a patronising message saying that answers to common questions can be found on the Orange website. I’ve been on it quite extensively. It’s never answered a single problem I’ve ever had. Anyway Orange don’t do email support and there’s no wiki or community-based answers section so it’s basically useless unless of course you want to spend money. That can be done easily online.

Next, another minute taken up telling you that “Orange is committed to providing excellent service,” so they’re going to record your phone call.

And if you’re silly enough to call after 10pm, despite 5 minutes of negotiating the system, you will then be cut off because the office is closed.

Pity they couldn’t tell you that at the begining.

So why were they calling me? It’s obvious, isn’t it? I have asked for my PAC code - the number you need when you want to change provider. Now I’m leaving, they suddenly care about me. Guess how I felt about that?

If only Orange had spent as much effort dealing with me properly in the first place, perhaps they wouldn’t have had to call me to beg me to stay.

All of this got me thinking.

Customer Service is expensive. It sits somewhere on a balance sheet like a hungry baby, sucking away at profits. And in response Orange have clearly done everything they can to starve that baby by reducing the amount of people who get through to their operators. But look at the result.

In a recent report by JD Powers & Associates, Orange was found to have the lowest customer satisfaction rating out of all the main UK telcos.

Customer service shouldn’t be looked at as a cost, to be minimised. It should be looked at as a key plank in their marketing strategy. There is good business sense in this. According to Mobile Youth,

“New customers cost 5‐10 times more to acquire than existing ones (Bain 2003). Bear Stearns reports that subscriber acquisition costs in Europe average between $220 and $300 per new customer.”

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The one operator that seems to have got this message is O2. O2’s strategy for a number of years has been customer-centric. “Customers are at the heart of everything we do. We want to turn our customers into fans by delivering the best customer experience we can.”

And according to their annual report, they’re reaping the benefits. In the UK, they outperformed the market in 2007, posting like for like revenue growth of 9.5% for the year and adding 483,000 net customers in the quarter including 276,000 on contract, the highest number ever.

Good customer service builds loyalty, grows ARPU and also increases acquisition. That’s the best marketing you can get.

Meanwhile, as I told the man from Orange, I’m just waiting for the 3G iPhone to come out and then I’m off to O2. Can’t wait.

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One comment so far

  1. Tive 15 May 2008

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    Ahhh… customer services. How I giggle at the back page of Marketing reading the transcripts. Recently I asked Sky asking them if I could get the same offer for HD Sky as they are giving new customers. I was told current customers could not benefit from the offer. “So loyal customers are not rewarded the same way new customers are?” I asked. “Uh, I suppose. Sorry”, came the reply. Idiots.

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