My suggestion is that you read the first part of this post first before reading the rest of this: Churn & Revenue Assurance Part1: “Breaking Up is Hard to Do”
Perception is Reality – “I Think it’s Good, So it’s Good”
When you sell a service, customers’ perception of value is largely determined by marketing and the power of your brand – by what you think you are getting. A good example of this is when you’re the largest/oldest carrier in the market, and your brand is strong, people assume you must be the best, with the best coverage, customer service etc.
That’s why telcos spend so much money on advertising, because that’s how customers understand the value of what they receive. It is only over time when the brands of new entrants become established and clear in people’s minds, that “old” and “first” stops meaning “best.” This is also why telcos always want to be the first to market with new products and services.
So because we as customers perceive value through marketing and branding, even when we encounter bad customer service, we don’t necessarily switch providers – partly because we don’t believe the other provider could possibly be better.
If I was trying to be funny, (and if you had read one of my older blog posts) I would even say that if your brand is strong enough, you can torture customers for fun.
Price is Too High, Service is Too Expensive
When people complain about price, it’s usually because they don’t fully see or appreciate the value they’re getting from the service.
I recently tried to change my broadband provider because I thought it was too expensive. But after having so many problems with the new provider I was trying to switch to, I began to see how valuable my old, expensive and reliable connection was.
Because you have to realize, customers never think the price is too high when they hear about all the cool new things they can do on their phone and they sign up for it.
If they can check their e-mail on their phone, they’ll pay for that. If they can use Facebook or Twitter on their phone, they’ll pay for that. If they can get the ring tones they want, they’ll pay for that. If they can get their favorite music, radio or TV shows on their phone, they pay for that too.
You have to realize – telcos don’t charge based on how much a service costs. Partly this is because figuring out costs in telecoms is incredibly difficult. But it’s also because telcos know they can charge based on what customers are willing to pay.
SMS/text messaging technically doesn’t cost anything – it uses the SS7 signaling protocol that’s usually used to set up and tear down voice calls. SS7 was never designed to “deliver service” or payload. But people are willing to pay for the service, so telcos are more than happy to charge for it.
Is Churn or Customer Experience Part of Revenue Assurance? One is, One isn’t
The reason I’m so interested in this, and why you should be interested in this, is simple. When I go around to Revenue Assurance conferences, I keep hearing about a push towards “Customer Experience” and improving customer service. And I get confused, because I don’t see what that has to do with Revenue Assurance.
I’m not going to say telcos shouldn’t be trying to improve customer service or they shouldn't be trying to offer their customers more value. But if you’re going to say you are doing those things because your telco has a churn problem, I’m going to say churn and customer service have very little to do with one another.
Because when it comes down to it, I’m in Revenue Assurance, and if you work in Revenue Assurance you believe in actually being logical, working with facts and rationalizing how money gets spent.
If fixing customer service would really have a huge effect on churn, and it would really affect either the top or bottom line of the telco, I would be all for it. But I’m not convinced it does, and that’s not what I’ve been hearing from GRAPA’s members.
If I hear differently or if I learn differently, I will gladly admit I am wrong - but I don’t think I am. If you want Revenue Assurance to be involved with churn, I’m all for it. I think we should be involved in churn management and marketing. If you want Revenue Assurance to be part of “Customer Experience,” and improving customer service, I’m going to say that is out of scope.
I work in Revenue Assurance, and the job of Revenue Assurance is to either assure the bottom line of the telco, or help add to the top line. Churn management absolutely does that. Market Assurance absolutely does that. I have seen no evidence that “Customer Experience” does that.
And that’s why I LOVE Revenue Assurance.
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