NEW YORK-Wireless carriers seeking to reduce customer defections would do well to pay close attention to the important but overlooked linkage between subscriber churn and rising turnover among customer service representatives.
These employees, who serve as companies’ primary direct link with customers, are quitting their jobs in droves, according to a Purdue University study cited in a presentation May 3 at the Advanstar Customer Relationship Management conference. Across industry sectors, the turnover rate in this job category rose to 23.3 percent last year from 14.8 percent in 1996, said Eric S. Chen, senior director of industry strategy for the communications business unit of PeopleSoft Inc., Teaneck, N.J.
Furthermore, a recent PriceWaterhouseCoopers study “found a very clear correlation between (customer service) employee churn and declining customer loyalty, especially in service industries,” Chen said.
Since it costs five-to-12 times more to acquire a new customer than to retain an existing customer, companies would be well advised to consider how to make their businesses more employee friendly, he said.
“Smart companies address each call as a customer impact event. Smarter companies look at what satisfies both the customers and the customer service reps. … I have listened to enough reps enough times say it wears on them to have to repeat the same number for the hundredth time.”
Before joining PeopleSoft, Chen said he worked for a “household name communications company and rolled out its long-distance calling plans.” Wireless carriers account for 100 of PeopleSoft’s 430 customers worldwide in the communications sector. About a third of the total use its CRM software and the remainder its back-office enterprise applications.
To empower customer service employees and relieve them of some of the drudgery associated with repetitious tasks, carriers should implement “branch” or “dynamic” scripting, he advised. Instead of a linear progression through a pre-set list of questions, the customer representative taps into a program whose follow-up questions for the customer are based on his or her responses to preceding questions. This strategy also makes customers feel like the questions are relevant to their particular circumstances.
“In communications, we see a shift in the view of CRM from one of cost center to profit center. This is happening a bit late in the game for telecommunications but is a response to deregulation, which has increased competition,” Chen said.
“A common database to manage all customer relations is simple from a vendor perspective. Separating trouble reports and management from account creation and billing is a lost opportunity to turn a customer’s negative experience into an opportunity to up-sell.”
Employing branch or dynamic scripting in these carrier encounters with customers offers another significant benefit in that it stymies the attempts of competitors to figure out new marketing plans, Chen said. In contrast, it is far easier for an operator to ferret out the particulars of a competitor’s new promotions when customer representatives follow a vertical hierarchy of the same questions for all comers.
“I could even see an approach to designing price plans where you measure the positive dollar benefit of improved operational results. But marketing and operations are separated by organizational design dating back to the paper-and-pencil era when boundaries were set by what people can manage manually. Therefore, these are business decisions that must be managed at higher levels of the company,” Chen said.
Dynamic scripting also would be a valuable tool for wireless carriers that rely on retailers and other independent distribution channels for a good portion of their sales.
“Training requirements are fairly low, but building in the use of branch scripting for channel management often is overlooked,” Chen said.
In taking a unified approach to customer relationship management, telecommunications companies also should examine whether time saved on each customer call is the only, or even the most useful, benchmark. Branch scripting can reduce the number of minutes service representatives spend with each caller, but a better guide would be to evaluate that in context of other important criteria. These include customer retention, increased revenue per subscriber and improved employee satisfaction, Chen said.
