Catering to the Customer

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Providence, R.I.— The grease board hung on the wall in the middle of a maze of cubicles. It bore a scrawled message: “1261 calls handled/80% service level.”

That means 80% of calls from customers that were routed into this 1917 building reached a live customer-service representative without getting put on hold.

In the historic building once known as the home of New England Telephone here, service representatives occupy the third floor of what is now the Verizon Communications Fiber Solutions Center. Their quick response to callers has helped curb customer losses for the telco’s new television and Internet-access businesses.

Those customer-care workers are trying to protect Verizon’s investment in a network that will take high-capacity fiber to 18 million homes and cost $18 billion by 2010.

The reps’ effort appears to be paying off. Verizon loses about 1.5% of its FiOS TV and FiOS Internet customers each month. That’s from a base of 522,000 Internet customers and 118,000 television customers, as of the end of the third quarter, according to the company. That churn rate is half of that experienced by traditional cable companies, according to a November report by Citigroup Investments.

According to that report, 3% of cable’s 65.5 million homes churn each month — 2.1% due to consumer relocation and 0.3% due to the lure of a competitor.

CENTER OF THE ACTION

Verizon’s call center is really an epicenter of the telco’s battle to win away customers away from its competitors and keep them for the long haul. The 300 workers here, girded for battle with headsets and hunched over computer screens, are front-line combatants.

Analysts, such as Jim Andrew of Mercer Management Consulting, and providers, such as Cox Communications and Comcast, say the intensifying war for customers between cable, telephone and satellite providers will be won or lost over customer service. Cable and telephone companies are all moving toward some bundle of TV, Internet and telephone services, offered to consumers at a price of about $100.

Even satellite operators Direc TV and EchoStar Communications, who have no phone lines, now pitch such packages to consumers nationwide, through co-marketing agreements with companies such as Qwest Communications and BellSouth.

Customer contact is king, because subscriber satisfaction can be won or lost in an eye blink. Handle a customer wrong and they go away. Even in a computerized world, the process goes awry when service appointments are not accurately logged. Consumers complain that companies direct resources to new product promotion and installation, leaving their “old” customers to wait for service on legacy products. Subscribers also have little patience for service and performance gaffes.

Based on complaints, consumers think annual rate increases are paying for the development of new products they might not want to buy, rather than perfecting performance of the services they already have.

Demands on service specialists vary widely — sometimes by the day — depending on weather-related and other service outages, or the response to a given promotional offer. Each call can be a turning point for gaining or losing customers. That has an impact on what financial executives often antiseptically refer to as market share.

POISONING THE POOL

And the percentages work against the reps. A customer-dissatisfaction study by the Wharton School of Business released last March noted something poor retailers might not even know: Consumers are 50% more likely to tell friends about a bad company than the company itself. Of 100 consumers who hear criticism, 62% are unlikely to patronize that company, no matter what promotions, marketing or sales are offered.

A happy customer might tell one or two friends, said Dr. Rosanne D’Ausilio, a Carmel, N.Y., call-center consultant and author of three books on the subject. But a dissatisfied consumer tells between 12 and 16 other people, poisoning the potential customer pool.

Fred Reicheld, best-selling author of The Loyalty Effect and The Ultimate Question: Driving Good Profits and True Growth, indicated that the detractor’s reach may be even higher. Instead of telling 10 friends (his detractors’ estimate), today a critic can tell thousands of “friends” through Internet postings.

“Cable operators often don’t realize that [the front-line employee] is the moment of truth for your customer. Customers are one click away from your competition,” D’Ausilio said.

A decade ago, cable operators measured success by gauging how many calls they could handle in an hour. That gave customer-service reps an incentive to quickly dump calls, rather than fully deal with them. But customers don’t like being brushed off.

In Ultimate Question, Reicheld noted that Southwest Airlines’s well-publicized customer-satisfaction rates didn’t soar until the company told operators to spend all the time they needed to serve callers.

Some operators, such as Comcast and Cox, now poll consumers on their experiences and use that input to change business practices. For instance, Comcast has instituted a self-help option through which callers can “talk” to computers using a natural speech program. When consumers complained that the program hung up on them before they could ask about a second issue, Comcast added an option that let callers ask more questions or talk to a live agent.

After all, customers are not interested in cost-efficiency, said D’Ausilio. They’re only interested in getting their services turned on.

IN THE TRENCHES

As the competition for customers picks up, call dumping has become passé.

The norm now is to enable a representative to take the actual time needed to serve the customer, down to ending a call by asking if there are other issues a consumer wishes to address, according to executives at Cox’s San Diego facility.

Cable and telephone companies, including Verizon and Comcast, are adding more service capability, both by hiring more customer-care workers and by contracting for more outside help. That way, calls coming in at any given time can be shifted to the first available service worker.

A recent survey commissioned by Amdocs, one of those outsourcing-solutions providers, indicated that 67% of the top telecommunications providers intend to increase their spending on customer-service enhancements in the next year, with the average investment increase projected at 31%.

Cox is in the midst of an 18-month changeover, replacing its entire call-center infrastructure. This should make calls flow to the appropriate specialties (phone, Internet, video) more quickly. It will also route calls from a busy, high-volume division to another center with open lines.

Charter Communications anticipates a 50% budget increase for support of customer care, especially online self-help options, said corporate vice president of customer care John Higgins. He declined to put a dollar amount to that percentage, though.

FLUSHING ACTION

A recent visit to Time Warner Cable’s center in Flushing, N.Y., which handles inquiries from 900,000 New York City customers, showed a typical day in the life of such phone jockeys.

Customer care representative Maxine Watley took just four calls in one half-hour period.

The first three — including a request for transfer to a Chinese-speaking agent, a service-call confirmation and a no-show complaint — went quickly. Watley didn’t question the latter caller, even though the computer showed the installation wasn’t scheduled for that day.

You always give the customer the benefit of the doubt, she said, quickly rescheduling the job for the following morning.

The fourth call, for a vacation disconnect, went longer, as Watley walked the customer through several low-cost options short of cutting off service. That took 22 minutes.

The time didn’t produce the company’s desired result, though: The consumer stuck with the decision to disconnect. But Watley said that in similar cases, she’s often able to convince subscribers not to switch off their service.

Across the country, in a former Costco warehouse, 650 in-house employees and up to 80 homebound cyber-agents handle seven million calls annually from 810,000 Cox customers in clusters in San Diego, Orange County and Palos Verdes, Calif. They provide the service deemed tops in the cable and telephone sector by J.D. Power & Associates.

Given its San Diego location, the facility is rife with beach and water themes. Save agents are called lifeguards; the ad-sales team toils in the “Shark Tank.”

But it’s not laid back. Signs of the task at hand are everywhere. Welcome mats outside the bathrooms remind the reps to sell HBO, home of Big Love. Another sign reads, “Competition should be everybody’s business.”

Customer-care representative Lee Atkinson has worked her whole life in customer service, the last 10 years with Cox. At her station, she beamed as she talked about selling the cable company’s various services, and why she’s happy there. She perched on her individually adjusted office chair and demonstrated her ergonomic keyboard, which sits on a shelf that rises to allow her to stand and see other workers so “I don’t feel alone in a cubicle.”

But even a company with a good reputation lets down consumers sometimes. Atkinson spent more 15 minutes with the next caller — a transfer from technical support who had scheduled a repeat appointment in an effort to improve his digital signal. Atkinson’s computer screen filled up with the customer’s situation: his services, payment history, and recent company contacts.

By the looks of it, the man wanted to punish the company for his poor signal by canceling some services. He became more irate when Atkinson explained, due to bundling discounts, that his cancellations would only cut his bill by $2.

“You guys have got this all figured out, haven’t you,” the man sneered.

Atkinson remained patient, speaking softly while scanning her computer for an appropriate offer or discount to give the man to compensate him for his poor service.

Though the man went away with some extra benefit, the call didn’t resolve his core issue and did not meet Cox’s goal: resolving an issue on the first call.

“We’re not 100% successful. No company is,” said Cox vice president of customer care Debbie Siek.

Consumers have simple expectations: Make it work the way it’s supposed to, she said.

And cable reps are still working against what Siek calls an issue from the past: the residual perception of cable as an industry that’s committed to poor service, if it’s committed to any customer service at all.

Such perceptions can take years to overcome. One new misadventure can ruin a company’s image all over again, she said.

Cox stays on top of consumer needs by contracting with an outside vendor to poll its subscribers. If a consumer says he or she was not satisfied with a service contact, a Cox manager will contact that person within 24 hours.

“We take those calls very seriously,” she said. “The polls create a statistically relevant sample from every Cox market and there’s s lot of internal competition to be the best.”

TRIPPING ALONG

Although telecommunications companies have strived in the last few years to shake their image as monopolistic, unfeeling leviathans, not all consumers feel the love. A check of nationwide news articles and Internet posts shows that companies often trip over their customer-service goals.

The top sins among providers, according to these posts: Companies don’t show up when they say they will; the products are not as reliable as promised in advertising; and big companies don’t listen.

One customer — James McClellan of Walnut, Calif. — still bristles about his Charter Communications installation several years ago.

The consumer, an electrician by trade, wired his own house with coaxial cable, even digging the trench to the curb. He told the company that he’d pre-wired the home, and scheduled an appointment.

The tech who showed up, at the very end of the stated service window, was an inside technician. The customer had to reschedule the installation because the company didn’t listen, he said.

But listening was the key to complete satisfaction for another consumer, Walt Praay of Lancaster, S.C., one of the few consumers contacted for this story who raved about his provider. He and his wife recently moved to the community and subscribed to video, telephone, Internet and home security services from Comporium Communications of Rock Hill S.C., a 100-year-old telco serving 95,000 customers in that state.

Praay said he was impressed that every time he had a question about new services, the installer stopped and looked him in the eye as he explained everything. The tech even volunteered to replace damaged preexisting wiring under the house.

As he was leaving, Praay apologized for taking so much of the technician’s time. The man responded that if he were to damage his truck on the way back to the office, he wouldn’t be in as much trouble as if a customer called to complain about his service.

Listening, especially empathetic listening, is the second most important attribute of a good service center, noted D’Ausilio. Customers want to hear, “I’m sorry you had that experience,” she said.

Part of listening is also making note of what you’ve heard. For this story, this reporter called the Southern California contact number for Charter Communications to inquire about a billing issue. The call was transferred three times, with each new contact demanding the caller repeat account and contact information.

Online posters make similar complaints, adding that front-line personnel sometimes promise a call from a supervisor but don’t follow through; promise installations that don’t take place, or offer incorrect information about the source of network problems and resolution times.

WORDS THAT MATTER

When all is said and done, calls from the customer service reps don’t necessarily win the day. The opinions of friends and family — word of mouth — frequently remain the strongest factor in new subscribers’ decision-making.

Take Glenn Guillou, who is in his 50s and lives on the West side of the city of Los Angeles. He has never subscribed to a pay TV service before and only upgraded his Internet access from dialup to high-speed within the past year.

He resisted Adelphia Communications’ frequent pitches and pricing deals in favor of Verizon’s digital-subscriber-line service, basing that choice on favorable comments from co-workers.

He’s a prime target for video providers, and his wife would like to watch cable programming. Now, the Guillous are being pitched heavily for video by Time Warner Cable, which took over Adelphia’s systems this year; and by Verizon, which is trying to make inroads in the nation’s second-largest pay television market.

His wife wants cable, but Guillou is unfazed when the telemarketers call.

“I tell ’em 'no’ and hang up before they have a chance to go into their pitch,” he said.

He’s preoccupied with improvements to their home. He also sees plenty of cable trucks along his street in the Mar Vista section of Los Angeles, but they are there to fix problems, according to his neighbors. And when it comes to TV, the telephone company is an unknown quantity, he added.

When he is ready for video, “I’ll probably get a dish,” he concluded, saying that his friends have had fewest complaints about getting their signals from Dish Network or DirecTV.

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