Customer experience in the UK telecoms market stinks. It’s official. But other geographical markets shouldn’t feel smug because many of you are no better. Within this depressing fact though lies an enormous opportunity for MVNOs.
Considering we spend so much money on customer experience in the telecoms industry, and have written so many words about it, it’s pretty depressing when we read what our customers really think about us.
I read Simon English’s piece in the Evening Standard with a heavy heart. The truly sad thing is that there is absolutely nothing in this article that shocks me. In fact the only shocking thing is that after decades of being bad at customer experience the telecoms industry seems to be perfectly content with being bad at it. Maybe we’ve stunk at it for so long we can no longer smell how truly terrible we are.
Simon’s appraisal does not pull its punches: “The entire telecom sector reminds me of life insurers in the bad old days. It sells us something we need, or in many cases are obliged to have. But the business model is about driving new sales, not servicing old ones. Moreover, like banks 10 years ago, they are all as bad as each other. There is not one that can plausibly claim good service as a differential factor, a reason to go there. We can have flashier kit, more films, newer buttons. Better service? It’s not an option on the drop-down box.”
When even the utilities and financial service sectors generate less complaints, then you really have to take a long hard look at yourself.
Simon continues: “It is hard to think of another industry that could operate like this.”
According to the Ombudsman Service’s annual Consumer Action Monitor (CAM), poor customer service is costing CSPs £2.9 billion per year from customers who reduce their spending or churn. Note that doesn’t include the cost of handling the complaints. And that is a considerable cost given that 13% of the 55 million complaints received by the Ombudsman in 2016 – 6.9 million in total – derive from telecoms. Even more depressingly, 18% of consumers said they were resigned to poor service within our sector.
It’s important to note that this figure of 6.9 million complaints does not represent total complaints. Complaints only get referred to the Ombudsman when they reach deadlock (8 weeks and no resolution). Most complaints are cleared up earlier. So before we gleefully announce that the number of complaints dropped from 8.3 million/ 16% of total complaints in 2015, we must bear in mind that this doesn’t necessarily reflect less complaints being made overall, but that we’re getting better at resolving them earlier in the process.
The harsh truth is that while the CAM provides a snapshot of how bad experience is in the UK telecoms sector, the situation is worse that it shows.
But inside the dark cloud of disgruntled customers there is a silver lining for MVNOs. If MNOs are truly so horrible at customer experience, and there are so many disillusioned customers, there is a real opportunity to differentiate by offering something better. Differentiating through better service and experience also means the MVNO doesn’t have to descend further into the abyss of price competition, because customers are primed to pay more for quality in part at least through desperation.
The bigger picture to this story is that the industry could become a lot more profitable by reducing complaint levels. And while there will always be difficult customers with unreasonable expectations, many complaints could be removed by just paying attention to the basics: simplification, better explanation, and by being trustworthy and reliable.