David Ffoulkes-Jones, CEO of CEM solutions provider WDS, shares his views on how operators can develop customer experience management into a true competitive differentiator.
There is more than a dash of understatement in David Ffoulkes-Jones’ observation that, “being the CEO of a network operator right now would be a challenge.” In a verbal sketch of the industry, Ffoulkes-Jones, chief executive of customer experience management specialist WDS, depicts mobile operators battling on a number of fronts—internal as well as external—and struggling to maintain their lines.
“They’ve got their shareholders, which are probably the larger pension funds, in a depressed market, saying they want cash so they can afford to make their pension payments. They’ve got their engineers complaining about capacity issues caused by the marketing department subsidising smartphones onto the network and they’ve got the post-sales support teams reporting that those smartphones cost an arm and a leg to support,” he says. “And on top of all these negatives, they’re already deep into the price game, commoditising the product as it stands.”
In this scenario, he says, it becomes increasingly difficult for the operator to convince its shareholders that a multi-billion dollar investment in new network technology like LTE makes financial sense. Of course, once one operator makes this move in any given market, the rest have little choice but to follow. But this relegates the network to the level of a hygiene factor for consumers comparing operators with one another. Meanwhile, the world of content and applications, which operators had expected to enable a new wave of differentiation, has become dominated by over the top providers.
Against this backdrop a new competitive arena has emerged, he says, and it is customer experience management.
“As an operator, while I have to spend money on the network because without it I won’t have customers, I have to accept that the operator down the road is going to do the same thing. So it is not a point of differentiation. I also have to tariff and market the products in the right way, manage them in the right way and get my post-sales services right. I need to create stickiness—and the customer experience, knowing the customer, delivering a great service, managing them in the way that’s right for them—will create that stickiness.”
Today’s mobile operators have a degree of customer interaction that would have been unthinkable just ten years ago. Historically—especially in the days when 12-month contracts were routine—an operator might feasibly have interacted with a customer only at the point of uptake and the point of departure or retention. And if there was contact between these points, it went largely un-analysed.
Today, due in part to the increasing depth and complexity of the mobile experience, many customers interact with their operators’ support teams far more frequently. Invariably, in the wake of each of these interactions, an automated CRM system pings the user a text message asking them to rate the experience. Websites do the same thing, while technical reports from the network feed in information on device connection rates and dropped calls. The net result is a far greater volume of data on the customer experience—which, on the face of it, should be a good thing for any operator looking to put CEM at the heart of their brand differentiation.
But, says Ffoulkes-Jones, information only has value if it is properly exploited—and even then that value can vary significantly. Furthermore, the increase in data volume could be just as easily be a burden as a bonus.
“The challenge is getting a clear message out of all of the noise generated by these multiple touch-points,” he says. “Even if I can get all of this data, and process it in a very clear and concise way, who do I give it to? And is that person set up to receive it? Network operators—and OEMs—traditionally run very siloed environments but I need to be able to deliver this information into an organisation that is capable of making decisions and acting on those decisions in an effective way. So there’s real change required, structurally and culturally, to create an industry that becomes far more customer experience focused than it is today. The customer experience needs to be managed horizontally, as a process.”
The type of feedback generated by automated survey tools in the immediate wake of a customer interaction needs to be treated with caution, Ffoulkes-Jones says, describing it as of “questionable value”. While he says that it is an absolute requirement for operators to survey their customers, he points out that text-based feedback, for example, provides only the snapshot of a moment.
“It’s not a measure of the customer experience, it’s a measure of how they feel right at that minute,” he says. “If they’ve had a tremendous transaction within the operator, they can feel really positive. But the next day they could get a dropped call and then feel terribly negative. So these data are important but they are not the only things that operators should be looking at.
“A truer test would be looking at the churn rate, the level it’s at and whether it’s trending in the right direction. But even that isn’t a completely safe basis for assumption because it could just be that the operator was the first to launch the iPhone. O2 has one of the lowest churn rates in the UK and I wonder if that’s because they’re a great network, or because they were the first to market with the iPhone,” he says.
Data derived from the network can also be improved upon, he says. Operators may well carry out compliance testing for devices that they want to offer to their customers but ticking the box doesn’t go far enough. “How many times do they test the device against the experience their customers have had of the father of that device previously? That would help operators start to understand, from a user’s perspective, whether that device is really appropriate for the network.”
The trouble with customer experience is that, while operators labour to meet KPIs on everything from dropped calls to complaint resolution, customers add an abstract, emotional layer to the mix that is far more difficult to manage. While this can’t be controlled, says the WDS CEO, it can be influenced. If an operator works to build brand equity with its customer, by consistently executing well on its customer interactions and by learning and improving, then they can be honest with their customers about their successes. If, on the other hand, the operator is promising to deliver something that cannot be delivered, a gap is created through which customer loyalty can seep away.
“That’s why we would say that customer experience isn’t about the user interface, or the fact that you’ve done network compliance testing, or your dropped call rates. It’s about all of these things and more. It has to be a continuous and relentless drive towards building better and better services for the customer—that’s how operators can build that loyalty,” he says.
Competition for loyalty is intensifying, though. Over the top players have increased the complexity and depth of the mobile experience but are also threatening the operator community’s control of the customer relationship. One by one, core territories that the operators sought to retain as their own—think services, content and billing—have been colonised by third party providers. But Ffoulkes-Jones argues that this creates an opportunity for mobile operators, as well as a threat, because the over the top players are not making the customer experience a core focus.
“They’re saying they’ll have a good deal of the revenue but they don’t fancy any of the costs, which is a great business model if you can work it,” he says. “But if you look at Google, they have the OS and they’ll sell the apps but they’re not assuming responsibility for the experience of the whole solution. So the operators have the opportunity to step in and tell users that they should be loyal to them because they will manage the experience and make sure that it is reflective of their brand.”
But if operators do pursue this approach, they will not be alone. At the retail end at least, they are likely to soon have competition from independent players. “Some retailers could take a truly independent view of the customer and say that, of everything that is on offer, a particular product is most suitable,” he explains. “That solution could be a television, a laptop or a tablet, or it could be a network, a device or an application. That’s not how it is yet, but there are lots of other companies that could get into this space if it’s not taken up by the operators.”
Under fire from all sides as they are in Ffoulkes-Jones’ sketch of the industry, this is the last thing that operators will want to hear. And he suggests that they can only ensure their continued relevance by weighting the customer’s experience such that it occupies a complete 360-degree world view. “It’s not the only information you’ll need to make the right decisions, but it’s a significant chunk of it if you want to ensure that you are delivering an experience that’s reflective of your brand,” he says.