Turning Customers into Fans

Turning Customers into Fans
Dominic Smith talks to Chris Hall, Deputy Chairman of Manx Telecom, about becoming a customer service organisation, not a Telco.

DS: Hi Chris, and welcome to the Cerillion Blog. Tell me about Manx Telecom and the markets in which you operate?

CH: Manx Telecom is the Isle of Man’s largest telecommunications and Internet provider, offering the full range of fixed line, mobile and data services to consumers and businesses. Our vision is to “Do some good, make some money, have some fun”.
The Isle of Man is a small market in population terms with just 80,000 people, but it is a very sophisticated and demanding market, being a centre for the global finance sector and global e-gaming sector, both of which demand absolutely top-quality global communications. As a result, Manx Telecom has a role as an innovator, and providing leading edge customer services to allow the key enterprises to thrive and grow in their market place.
Manx Telecom is well known in the telecoms sector for a number of industry firsts: Europe’s first 3G network in 2000; one of the first broadband networks at around the same time; the world’s first mobile broadband (HSDPA) network in 2005; and most recently migrating from legacy networks to a next generation network (NGN). By the end of 2011 we will be one of the first countries in the world to have all customers connected over a converged IP network.
Manx Telecom was formed in 1986 as a wholly owned subsidiary of BT. Since then, we’ve had different ownership guises including O2 and Telefonica and spent 25 years being a subsidiary of a publicly quoted company. However, as of June 30th 2010, we went through a major change when the firm was acquired by one of the UK’s leading private equity houses – HG Capital. So for the last 9 months, the company has been under new ownership, privately held, and the strategy is to accelerate investment in both on and off-island activities so the business can continue to thrive and grow.
DS: What areas of business do you see as the biggest growth prospects?

CH: Firstly, Manx Telecom has created a best-in-class data hosting capability, in particular for managed services; and we’ll be building a new £20m facility in the next 12 months aimed at meeting not only the needs of local businesses, but also new inward investors and e-businesses who need a very high quality managed service offering.
The other area that Manx Telecom has a strong reputation for innovation is in leveraging its on-island assets, such as the mobile network, and then working with resellers to provide innovative communications services internationally. For example, we have a strong position in the text messaging market through our partner Tyntec who deliver over 20 million high quality SMS per month. We also have a leading position in the mobile traveller market through our innovative dual-IMSI services, with over 350,000 travellers using services powered by the Manx Telecom network.
DS: Why are customer service and the customer experience so important to Manx Telecom?

CH: Firstly, there is a very practical reason. Living in a small island community you’re very close to your customers and very visible. It’s fair to say that when I started as Managing Director 10 years ago, service was OK, but it wasn’t outstanding, and I would pick up a fair number of whines and grumbles when I was out with my family. It struck me very quickly that if I was going to be able to enjoy myself at social events, then we would have to be delivering an outstanding level of service, so people would tell me what a good job we have done, not what we hadn’t done.
This was followed up with some work we did with our parent company at the time, O2, who carried out a lot of research on the subject. This demonstrated to me conclusively that companies who deliver superior customer service, also deliver superior financial results and can maintain higher margins. So it’s not just a nice thing to do, it’s a business imperative. This was particularly relevant for Manx Telecom, with new competition entering the local Manx market at the time. Our strategy was to differentiate on service, not on price so it meant that there was a real business imperative to improve the customer service and increase customer loyalty – basically without service excellence it would not have been possible to defend market share and grow in an increasingly competitive environment.
Lastly, there is the simple issue of cost, and poor service has a very high cost to it. If you start measuring the cost of failure when things go wrong, it actually takes a big hit on the bottom line too. So there’s a double effect – satisfied customers are very loyal and will advocate you, and dissatisfied customers cost a lot of money to service and will leave you.
DS: Can you tell me more about your strategy and approach for monitoring and improving the customer experience?

CH: There are two clear planks in our customer experience strategy. The most important being the old adage that if you can’t measure something you can’t improve it. So the first thing was to put in place a reliable set of metrics that moved us from the traditional KPIs, which measured transactions and outputs and often bore no relation to customers, through to a much clearer set of measures which actually focused directly on what customers wanted and how they perceived the service they received.
That’s not to say that the traditional measures weren’t important because they still need to be tracked and used to efficiently manage the operational aspects of the business, but the focus and priority has to shift to what the customer is saying, not on what we think we are doing. For example, a key metric used to be lines delivered by customer-required date, but the business rules were that the customer-required date could not be for at least a week. So it was a meaningless measure based on historic processes and rules that were deemed acceptable in the past.
The second part was to do much more face to face research to find out what customers were really valuing and wanting. And the key tool we use here is the CSI methodology – Customer Satisfaction Index – which is a generic approach fairly widely used within the customer service industry across a number of different verticals. Using this, a simple well structured 5 minute telephone call with a customer will give you some very good insights into how they are measuring you against an ideal service provider, across 2 or 3 dimensions, and will give excellent insight on the likely future loyalty
Then it’s all about execution. One of the key enablers is communicating the strategy and making sure the team is trained and given the tools to deliver it. We ran some very basic training courses to highlight what good service looks like, and a lot of it was attitude training really. How things are done and how people communicate is much more important than what is done.
We also aligned all our HR processes and practices to reinforce the importance of the “customer first” culture and to ensure that we had the highest possible levels of staff engagement. Key initiatives included: recruiting based on attitude, not technical skills; the annual review process changed to be based on how you do things, more than what you do; and recognising people who have gone the extra mile based on direct customer feedback. This is not an overnight job but I believe our strong “can do” culture gives us a key competitive advantage.  
DS: And what results have you achieved?

CH: The key metrics are your actual business metrics, and in the Manx Telecom case, there has been a direct correlation between the way our CSI has grown and the way the business performance has improved year on year. Over the ten year journey, from refocusing our KPIs to moving to a full CSI methodology, we have doubled our revenues and delivered a significant improvement in the bottom line.
Clearly setting up a full CSI programme requires a significant commitment and investment, but there are some quick wins which can be achieved more easily. In fact one of the achievements I’m most proud of is the continual improvement in the simple KPI of customer complaints v customer compliments. In 1998, we had 8.3 complaints per 1000 customers, and this has come down to 1.4 complaints per 1000 customers. We were receiving 5 complaints for every 1 compliment, which whilst not unusual in any customer service organisation because customers have a higher propensity to complain rather than compliment, is not a good place to be. Thanks to hard work, focus and commitment across the entire business we’re now achieving more customer compliments than complaints, and in 2010 we received 25% more compliments than complaints.
DS: Impressive results indeed. What action do you take upon the results? How do they affect your company strategy?

CH: It is hugely important that each team is measuring performance and customer satisfaction in their own area, so there will be a lot of tactical stuff which they will action at a local level as part of their own continuous improvement plans.
Then the high level information is used to feed into company strategy. For example, we have a monthly customer council meeting, chaired by myself and attended by all the Directors, where the whole agenda is devoted to reviewing the customer satisfaction metrics and feedback, and actually making sure we are setting product strategy, marketing strategy and technology strategy in line with the feedback we are getting. We can also respond to any early warning signals in real-time, and then in the bigger picture make sure those results are reflected in our annual business plan.
Making sure we have quality time to review the customer experience every month is vital, along with the fact that customer experience is led from the top which emphasises the importance.
DS: How has all this been achieved? Is there a specific customer experience team or department within Manx Telecom?

CH: This is not a programme or a project, this is embedded in the business and operating plans for Manx Telecom. Every person is accountable and responsible for customer service, and in particular for every team leader or manager it is just part of the job that they are continually improving the quality of what they do. So it’s in their DNA.
As well as training our people and adapting our processes, it has also been crucial to have the appropriate underlying support systems and tools, and we are delighted with our partnership with Cerillion.
The nature of our business means that quite often there are different people dealing with customers at different times, so one of the most important ways our system helps us is by providing the knowledge of the customer and context of any recent interactions, so that we can present a professional image to the customer and not waste time going over old ground. That’s probably the most important part of the process actually having really good information to hand, specific to the customer.
It also goes without saying that sending out accurate bills is a pre-requisite to having a satisfied customer, and having worked in partnership with Cerillion for 10 years, means we have reliably and consistently been able to deliver quality and accurate bills. This is an area we focus very tightly on, and we have the added assurance that BABT come and audit us every quarter and we always perform very well in this area.
DS: And finally, what tips would you give to other Communications Providers who are looking to improve their customer experience?

CH: Probably the most important of all, any service excellence programme has to be run in parallel with a strong focus on employee motivation and satisfaction. It is impossible to turn customers into fans, unless your own employees themselves are fans. So a parallel programme which has been running for 10 years has been how to make Manx Telecom the best place to work on the Isle of Man, culminating most recently in our 88th place in the Sunday Times Top 100 places to work in the whole of the UK. This was the first time we had entered and I believe that makes us the highest place communications provider.
That is absolutely fundamental, the two have to be aligned. It’s common sense, but if you have staff who are unengaged and miserable, they are never going to delight the customer.
The other key thing, as we do come from a technology industry, is that it does take time to get everybody focused on how to do things as opposed to what to do. The way to delight customers is all about behaviour and culture, it is a more emotional thing. So it is definitely challenging, particularly for people who are very technical or logical.
The mantra I use every day is treat every customer as you would expect to be treated yourself. And if you follow that mantra, you can’t go far wrong.
DS: Chris, thank you very much for your time.