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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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NOVEMBER 11, 2003
The Keys to Keeping Cell Customers With price less of a factor, wireless providers are waging the battle to reduce churn with better call quality and customer service For most people, losing a cell-phone connection is a bummer. But for Greg Clemens, a real estate agent in Portland, Ore., it's worse than that. Clemens often needs to negotiate contracts and talk with prospective home buyers on the go -- only to find that his service drops calls or garbles transmissions too often. "It has been extremely frustrating," he says. Many wireless customer agree, at least some of the time. Only a handful gripe formally: The Federal Communications Commission received 3,901 complaints relating to wireless service providers in the second quarter, up 7% from a year earlier. But millions of customers vote with their feet every year, judging by how frequently they switch carriers. In fact, prices now vary so little that customers increasingly are choosing a provider based on call quality and customer service, says Martin Dunsby, vice-president for operations at wireless consultancy InCode Telecom in San Diego. So at long last, cell companies are starting to focus intently on those two issues. One superficial indicator is the "Can You Hear me Now?" ad campaign of No. 1 provider Verizon Wireless, a joint venture between Verizon (VZ ) and Vodafone (VOD ), which has 36 million customers and is signing up new ones faster than any other carrier. The ad features a Verizon Wireless technician checking to make sure there are no dead spots in buildings and stadiums. More substantively, carriers are more efficiently and sensitively handling customer accounts, improving other aspects of customer service, and extending the reach of their networks. MOBILE ONLY. For companies that don't do so, the worst is yet to come: The wireless number portability (WNP) law that takes effect on Nov. 24 will let customers keep their cell-phone numbers when switching carriers. That will likely increase industry churn, already at 26% a year, by 20% or more, Dunsby figures. Improving call quality and customer service could dampen that effect. Recent surveys by J.D. Power & Associates indicate that only 7% of consumers at carriers with high customer satisfaction will switch in the next 12 months -- vs. 21% for carriers that rank lowest. Longer term, quality will only increase in importance. The FCC could soon let users keep their numbers when switching from regular phones to wireless service. By 2007, 20% of U.S. households will use mobile as their primary service, up from 5% today, estimates Craig Mathias, founder of wireless consultancy Farpoint Group in Ashland, Mass. And they'll demand the same level of service they have with their regular phone. The number of dropped cell calls has fallen from 5% a few years ago to less than 2% today, says Dave Murashige, a vice-president at telecom gearmaker Nortel Networks (NT ). But that's still worse than for wireline calling. And during the August blackout in the Northeast, most regular phones worked -- but many cell phones didn't. GOT THE ANSWER? On one level, the effort to improve customer satisfaction involves common sense more than capital spending. Until recently, one national service provider's financial system automatically sent to collection agencies the accounts of customers whose payments were two days late or who owed only three cents on their bills, says Andrew Cole, an analyst with wireless consultancy Adventis. Needless to say, many such customers switched. Now, that company simply carries the charges over to the customer's next bill. Improvements in customer-service response time are another area of focus. Anticipating a barrage of calls after Nov. 24, No. 2 carrier Cingular, a joint venture between Baby Bells SBC (SBC ) and BellSouth (BLS ), with 24 million subscribers, recently expanded its network of call centers to process customer queries more efficiently. No. 5 carrier Nextel (NXTL ) has hired IBM (IBM ) Global Services to improve its customer service. Starting 18 months ago, IBM installed custom software at Nextel's call centers to keep tabs on which customer-service reps couldn't answer which kinds of questions. Supervisors now use the statistics to train employees, says Dean Douglas, vice-president for the telecom industry at IBM Global Services. Such coaching cuts the number of calls agents transfer to their more knowledgeable colleagues -- and helps answer customer inquiries faster. IBM also set up a more convenient self-service phone menu that lets customers resolve more issues without talking to a person.
BW MALL
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