John Klustner  |  02/27/2009

4G Technology, 1G Service

Telecom providers struggle to handle complex, changing service demands.


With multiple personal-technology devices morphing into a single product, the telecommunications industry is experiencing a quantum leap in technical evolution. The comparatively primitive cell phone of just a few years ago must now be a music-playing, video-recording, web-browsing, photo-taking, and e-mailing personal accessory that you can still use to make a phone call. Why is it, then, given all this innovation, that when you have a question about your bill it takes so long for customer service to answer?

The processes and technology found in many call centers define their customer service, and unfortunately they haven’t kept pace with the quickly changing industry and its customers’ expectations.

The telecom marketplace is a seething, saturated environment where companies fight for market share. In the United States, that’s 86 percent of wireless penetration level, and 62 percent in Canada, according to World Markets Research Center. Of the 260 million U.S. internet users in a census-estimated population of 301 million, more than 50 percent now surf the internet via a broadband connection, according to The Atlanta Journal- Constitution.

Cable companies such as Comcast are bundling cellular, traditional phone, and internet services into their existing cable services. Atlanta-based Cox Cable has announced that it is pursuing its own wireless network. Phone companies such as Verizon and AT&T counter by offering television services alongside their phone and internet offerings. Regional competitive providers such as Frontier and CenturyTel seek to fill the service gaps in a variety of business and consumer markets. The ensuing result is a marketplace overwhelmed by service complexity, product confusion, and intense competition.

Why the gap exists

Communications companies spend millions on developing and promoting their products and services. Although these companies can create and offer myriad services through sleek and sophisticated equipment, their customer-relationship management practices haven’t made the progression. The disparity couldn’t be more glaring.

For starters, customers often have to decipher rather than read their monthly bills. Billing content can include cellular minutes, internet access, text messaging, traditional phone service, miscellaneous fees, tariffs, taxes, cable TV, equipment rental, HDTV packages, pay-per-view fees, and premium movie channels--all in a confusing multipage document. The problem is fueled by marketing decisions, no common platform to support billing and customer service, and a product- knowledge gap among consumers.

“The service processes of most telecom providers never anticipated this level of product complexity and service demands,” says Doug Wano, head of global operations at Proudfoot Consulting. “For that matter, customers weren’t designed to easily handle this type of complexity, either.”

Capital investment wanted

Horror stories abound concerning telecom providers’ customer service departments: long wait times, too many options on the service menu before a human responds, poor linguistic skills of the customer service representative (CSR), and insufficient product knowledge to help the customer. To make matters worse, the service isn’t cheap. According to industry standards, it can cost telecom providers between $5 and $15 to handle each incoming call, and in some cases it’s more. Although they’ve spent millions attempting to combat the problem, many call centers continue to struggle with disjointed processes inadequate for today’s demands.

The average hold time for an initial customer service response is 3.9 minutes, up from 3.6 minutes two years ago, according to J.D. Power and Associates. During peak hours, this number can rise sharply. According to Call Center magazine, some consumers still wait 20 minutes or more before speaking to an agent.

There are many reasons for this spike in wait times during peak hours, apart from the rise in the number of callers. Call centers don’t understand scheduling practices, nor do they have or use the proper tools to optimize staffing requirements. At many centers, employees often dictate their own schedules instead of managers creating schedules based on anticipated call volume. These issues, combined with scheduling windows that are often too long, create fully manned call centers during off hours and empty chairs during peak times. There will always be peak periods, but proper scheduling practices can reduce wait times while simultaneously saving labor costs.

Mobile customers

On many occasions, a customer’s only contact with a company after the initial sale is with a CSR at a call center. The only gauge a customer has to determine satisfaction in the event of a problem is through that phone interaction. The level of service the caller receives will play a major role in determining whether he or she decides to renew, upgrade, or cancel services.

In past decades, the general public had no voice in this process because the phone or cable company servicing their area was usually the only show in town. Consumers now have many choices, including the option to vote with their feet. Some telecom providers struggle with old processes that remain centered on one or a few products. These companies fail to see that they should revisit those processes. Most service organizations simply don’t have the resources to launch a comprehensive and effective process review. Isolated process improvements tend to diminish efficiency and create additional problems.

Consider what happened a few years ago when the FCC ruled that customers who desired to switch cellular providers could do so without the headache of changing phone numbers. This led to a whirlwind of consumers changing providers. Consumers quickly learned that service quality didn’t change much from one provider to the next. Had one telecom provider adapted successfully to market changes then, its customer retention rates, as well as a spike in new customers, could have made that company the industry leader.

The 2008 Global Productivity Report produced by Proudfoot Consulting indicates that the telecom industry faces myriad barriers to achieving service quality and efficiency objectives, including:

Inability of the workforce to adapt

High staff turnover rate

Internal communication problems

Low employee morale and motivation


Market acceleration, emerging communications products, and competition have created a demand for customer service unlike anything the industry has seen before. Companies must not only focus on recruiting skilled customer service workers; they must also install new or upgraded management operating systems and create a more proactive environment in which workers can operate efficiently.

Missing out on your chance?

The following focus areas are important for any company but doubly so for those with call centers.

Improved training. Proper training is crucial for public service workers, especially for those who serve customers calling to solve a perceived problem. Workers must be coached on how to pacify angry customers and trained to minimize call transfers. The longer customers remain on hold, the less patient they’re going to be when a CSR does answer.

Streamlined processes. If it takes several weeks to train a front-line employee in how to support a basic consumer product set, then the product set is too complex and is adding unnecessary cost--both directly and indirectly.

Effective reporting. Simplifying the reporting process is crucial. In some companies, supervisors and managers receive too many multipage reports that can be as confusing as some of the bills the company’s customers receive. A one-page summary detailing each worker’s output is an effective tool in determining at a glance which workers are performing above expectations as well as who needs more attention.

Communicating performance expectations. Workers must know what’s expected of them from the start. This relates directly to the training and coaching they receive.

Active coaching and feedback. Although every situation is different, workers should receive regular coaching on best practices for engaging customers and calmly working through the life cycle of a call. Workers should also be clear on when to transfer a call--only when necessary.


Whether a company operates a network of call centers or just one, operations must be standardized. Performance metrics and key performance indicators should be implemented and properly communicated to ensure that supervisors can evaluate worker performance against a predetermined criteria and industry norms. In many companies, these criteria aren’t regularly monitored.

To fully standardize a department, it’s often necessary to step out of the trenches and shift to a “higher view” where emotions are removed from the situation. Consider seeking the objective opinions from a third party such as an operational consulting firm. Operational consultants specialize in enabling the necessary program changes that allow companies to adapt to current and future business conditions.

A recent case study illustrates the improvement opportunities found in many call centers. The first thing this company looked at was its scheduling. It discovered that too many employees worked during normal business hours and too few during peak times. By changing scheduling practices, the company not only decreased customer wait times and lowered the number of dropped calls, it also reduced overtime. The call center became more productive, cut its operating costs, and customers received better service.

Keep more customers more satisfied

Successful service processes start by selecting a service channel appropriate to their customer’s profile. This is no easy task. It requires a careful, honest assessment of the following: Who are our customers? How do they want to interact with our business? Serving customers in their preferred channels will impress them and encourage renewals, repeat purchases, create crossover sales, and increase customer referrals. With service bundling becoming more widespread, you are more likely to create a loyal (and profitable) customer if services are tailored to their needs.

Channel development and optimization don’t necessarily require major capital investments. Most large companies already have the necessary internet and telephony infrastructure in place. What’s needed is a creative and comprehensive process design with a closely managed system of checks and balances to measure operations effectiveness, worker performance, and customer satisfaction.

What’s at stake?

According to J.D. Power and Associates, nearly half of all wireless phone customers have contacted their providers’ customer service department within the past year. The most common reason is to attempt to resolve a billing issue. Of those billing problems, almost 60 percent were about inaccurate charges. Customers were also three times more likely to call their providers than to visit a retail location. The opportunity to improve customer care is tremendous. Assuming that each additional customer is worth an average of $50 to $100 per month in gross revenue per service, a swing of just 10,000 customers would be worth millions of dollars annually.

There are many ways to streamline services while improving customer satisfaction and reducing costs. By educating customer service representatives and utilizing elements of the industry’s cutting-edge technology to service accounts, these changes are possible. It will take a strong company commitment to tackle this problem, but a good start would be at the front lines of the customer experience.

In their defense, telecom providers have explored potential solutions to these challenges. Different process improvement strategies, ranging from internally-managed training programs to system reviews performed by external consultants, have been attempted in recent years, even to the extent of applying Six Sigma methodologies to customer-relationship management processes.

The problem with strategy-driven initiatives is that many of them are short-lived. The only way to embed the required behavior to sustain the improvements is to coach and work with the people involved when the initiative is first implemented. Only then will a cultural shift occur in an organization. Change management is a central, crucial part of improving business processes; unless the solution sticks, the new process strategy is irrelevant. Sticking to it is an art, and only the organization’s people can make the changes happen. Front-line employees must take ownership of the improved systems and processes until they become totally engaged in a culture of continuous improvement.

A skilled change specialist can partner with management to evaluate the situation and then design and implement an improved process flow prioritizing the human element. With the telecom industry battling a malevolent economy and rife with mergers and consolidations, improved customer service should be a prize worth attaining. Fourth-generation technology and products demand to be supported by an equally high standard of customer service. The end result will be a more engaged workforce and higher customer satisfaction, which translate to higher loyalty and a healthier bottom line.


About The Author

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John Klustner

John Klustner is senior vice president of the telecommunications practice at Proudfoot Consulting. For more than 62 years, Proudfoot has provided services as the world’s leading operational consulting firm. Klustner can be reached at