Welcome to the February 2000 issue of the HELLERSTEIN TELECOM & TECHNOLOGY REVIEW, a free semi-monthly newsletter covering significant industry, marketing, and regulatory developments in the telecommunications and technology industries. The newsletter is published by Hellerstein & Associates, www.jhellerstein.com, a telecommunications and technology research group that provides its clients with a competitive edge through market research, competitive intelligence, and regulatory analysis of broadband access, competition policy, and wireless issues.
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This month's issue will focus on what we at Hellerstein & Associates see as one of the most troubling issues facing the broadband marketplace today--the lack of attention to customer service. This issue is a looming issue for all broadband and high speed access providers as well as for e-commerce providers. Customer service is a critical, but overlooked ingredient of any e-commerce or broadband access provider. Good customer service results in increased customer retention and provides a distinct competitive advantage that leads directly to increased market share. This is more important than ever because of the pervasive influence of the Internet and the ubiquity of e mail. Todays consumers are more likely to e-mail friends and others to inform them of any customer service problems or frustrations. Thus any problems consumers face travel much quicker and reach more people than previously. As a result, it is more imperative than ever for companies to provide high quality customer service. Customer support personnel are often the first people customers speak to and also the first impression they have of the company. Unfortunately, for many companies consumer concerns are hardly ever addressed and answered satisfactorily on these calls. Thus, instead of having a positive impression, they are left feeling frustrated and annoyed. Customer service can mean every aspect of selling and servicing a customer, pre-sale, and post-sale from product questions and delivery status to technical support and service.
It is clear that demand for DSL services is growing at a rapid pace, with over 500,000 subscribers to date, and many providers expecting to have more than double that amount within six months. What is less clear is whether DSL deployments are able to keep pace with demand. Problems with field trials and with customer service related problems caused many ILECs to fall far short of their target numbers for the fourth quarter of 1999. Providers and operators are rushing head first, massively hiring customer service and technical people, but with out providing them much in the way of training and support. As a result, customers are suffering. This is one of the main reasons why Hellerstein & Associates feels strongly that a total lack of attention to providing superior customer and technical support is one of the biggest dangers facing DSL and e-commerce providers today.
Hellerstein & Associates believes that companies need to put more of an emphasis on training and customer service
if they want to retain their customers. If companies want to maintain a competitive edge in the face of intense
competition in the broadband marketplace they need to significantly improve their customer service initiatives
Customer service is a critical ingredient in any successful business plan, especially one based on a rollout of
broadband access. A well executed customer service plan is no longer simply a "nice to have" feature" but an
essential ingredient to any business to consumer broadband or e-commerce provider. If providers are having
problems with getting enough trained customer and technical service representatives now when so few broadband
access lines deployed, what will happen when deployment of DSL lines increase substantially. As deployments
increases customer service problems become magnified and todays problems will get even worse.
ISPs, CLECs, and ILECs are only harming themselves by neglecting to improve their customer service. National providers, like Covad, not only need to make sure that they offer a high level of customer support, but also that their partners and affiliates offer the same high level of support to customers. Companies should use every contact with the customer as a way of proactively promoting its brand, products and services to address a consumer's needs, habits, and behavior. Currently this is not happening. There are far too many stories circulating in the media and on news and discussion groups about customer service representatives who give false information; installations that fail on the first, second, and even third times; and appointments that are missed by one of the providers needed to provision service for the consumer. A direct result of this inattention to customer service, is an annoyed, frustrated and confused customer, rather than a happy one. Poor customer service directly affects the retention rate because the pervasive influence of the net means that bad experiences travel at light speed. Today there are numerous websites devoted solely to the posting of complaints. Customer confusion is so common that journalists are now writing stories advising consumers that if they do not like the answers they received from one provider's customer representatives, they should ask the same question to another representative, because the first representative most likely gave the wrong answer. This attitude of mistrust pervades the industry and is exactly the opposite image that providers want to give. It is imperative that companies realize the strategic implications of poorly crafted and executed customer service plans both on the company's leadership and vision and on its profitability. Customer service is a required investment to create brand loyalty, cultivate future repeat purchase opportunities, and increase retention rates. Companies who have launched large branding campaigns asking consumers to trust and believe that their brand is the best one are endangering their efforts at creating trust and brand equity by their actions, ie, their customer service failures. Poor quality of customer service does a great disservice to all companies because it soils their brand name and destroys the brand equity and trust they are working so hard to create.
Customer support personnel are often the first people that customers speak to and also the first impression they
have of the company. If a company's representatives give out false and wrong information, or if representatives
annoy and frustrate consumers, this impression has a detrimental effect on the company's branding efforts.
Excellent customer service is the key to success and can be the mitigating factor when data CLECs are dependent
on others such as the incumbent, to fulfill their responsibilities, for the success of their DSL operations.
Hellerstein & Associates thinks that unless the industry focuses on measures to strengthen customer service initiatives, review current support processes and service levels, and map future demand for customer support, deployments of broadband access infrastructure will be significantly impaired. Companies need to ensure that both their customer and technical support teams, as well as their partners or affiliates, are well trained and responsive to customer needs; otherwise they risk permanently endangering their business success as well as the rollout of a broadband infrastructure in the US, which is critical to the information revolution. We see this total inattention to customer service as the biggest danger facing all broadband access and e-commerce providers today. If this situation continues the way it is with companies not paying much attention to customer service, we all will suffer. Companies should not forget the lessons learned from ISDN, that service and deployment must match promises and marketing hype.
Hellerstein & Associates is interested in learning what its readers think of these issues. Please send all comments directly to Judith Hellerstein at Judith@jhellerstein.com. If you would like more information on this topic please e-mail Judith Hellerstein at Judith@jhellerstein.com.
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Hellerstein & Associates is a telecommunications and technology research group that provides its clients with a competitive edge through market research, competitive intelligence, and regulatory analysis on broadband access, competition policy, and wireless issues. We look forward to hearing from you and will strive to meet all topic requests. Redistribution of this newsletter is encouraged provided it includes this paragraph.
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