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Telecoms now see customer service as differentiator, not cost center

Even as carriers look to cut costs, customer service remains a strategic asset, for both consumer and corporate customers. There are ways to cut costs, but analysts caution against being penny wise and pound foolish.

Telecoms are recognizing that customer service is a strategic differentiator and not a cost center. As a result, companies like AT&T are bringing customer service jobs that had been outsourced overseas back stateside and into the company.

Despite the recession, AT&T has a plan to "repatriate" 5,000 customer service positions to the United States. Three thousand of those jobs are already back in the fold. It's an unusual trend among daily announcements of layoffs, but the strategy might pay off in reducing costly churn.

"These are good jobs with good wages and benefits, and we are delighted to have them back in-house and on-shore," said Bill Blase, senior executive vice president of human resources of AT&T, adding that the company was continuing to hire for its wireless, video and broadband businesses.

"That's a strategy for them that started a few years ago, and is in some ways a trend of outsourced business processes being brought back into the United States," said Zachary McGeary, an analyst with Forrester Research. McGeary said that businesses were bringing jobs back to the United States as customer service becomes, for many of them, a strategic differentiator rather than simply a cost to be reduced.

This development also comes on the heels of rising overseas labor costs, meaning the savings from shipping jobs overseas have dropped even as U.S. call centers have become cheaper to run through technological and organizational leaps.

"Proper routing and queuing can go a long way to handle any capacity issues," McGeary said. The recession has also meant that call centers, which have historically had low employee satisfaction and high turnover, have seen more stability as there are few appealing alternatives.

Enterprise customer satisfaction important too

It's not just consumer markets, however, where telecoms need to focus on service. Corporate sales can also be made or broken based on the service experience, particularly with billing.

This was the focus of a recent Accenture survey, which found that 10% of corporate customers have recently switched providers because of billing problems, ranging from a lack of bundling services to billing errors.

Overall, telecoms are not delivering what their corporate customers want, said Rob Perks, a senior executive with Accenture.

He said the main obstacles were the fragmented legacy OSS (Operational Support Systems) and BSS (Business Support Systems) which made a single point-of-contact for a customer difficult to achieve. For example, a customer with both wireless and DSL might have to speak with two representatives to sort out any billing issues.

A second problem is simply not knowing what their customers want, Perks said. According to the survey, only 9% of carriers properly gauged their customer priorities.

What customers want

Fortunately, consumer and corporate demands from their service providers are often the same when it comes to customer service, as outlined by both McGeary and Perks:

  • A single point of contact: "From a best practice perspective, a single point of contact means being able to deal with a single person across products, cable and wireless and other modes of telephony," Perks said. For corporate customers, this might be a single person dedicated to a client. For consumers, it might mean, as Verizon recently unveiled, a single 800 number to call for support for any product. "You don't have to search if you're a Verizon Wireless or FiOS customer, you just have to dial 1-800-VERIZON," McGeary said.
  • Cross-product and cross-billing bundling: As it grows popular in the consumer sector, corporate customers are expecting the same product bundling simplicity. In addition, Perks said, corporate customers want flexibility with mixing pre- and post-paid options, as well as mixing credit, debit and check payments.
  • Accurate, easy-to-read bills: Probably the No. 1 complaint among customers was confusing or inaccurate billing. In some cases, upgrades to billing systems, while costly, can help better merge separate systems, say for wireless and wireline, and make customer bills both simpler and more accurate. Accurate billing can also head off a lot of other problems and, ultimately, customer care-related costs: Perks said that, overall, about 35% of customer support calls were made because of billing disputes or questions -- more than any other reason.
  • Quick customer response: While a single point of contact helps, customers mostly want a quick resolution to their problems, McGeary and Perks agreed. In the consumer case, for example, McGeary said implementing better Interactive Voice Response (IVR) systems could route customers to the right agent the first time, rather than having to elevate or redirect calls. Better systems designs can even potentially reduce the number of staff needed, even as customer care increases, McGeary said, as was probably the case with Comcast's round of layoffs a year and a half ago. "Their take on it was: 'We've been so successful with our online service, we don't need to keep growing our agent managed touch points the way we have been,' " McGeary said. "It wasn't about doing more with less."

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