"You see, this phone system consists of a multibillion-dollar matrix of space age technology that is so sophisticated - even we can't handle it. But that's your problem, isn't it? So, the next time you complain about your phone service, why don't you try using two Dixie cups with a string? We don't care. We don't have to. We're the Phone Company." – Saturday Night Live, September 18, 1976
Sounds like it could have been written today, doesn't it? Ah, the immortal words of Ernestine (Lily Tomlin) in one of the all time great Saturday Night Live fake commercials. It is hard to believe it is nearly 40 years old. And while it is funny to watch from time to time, the reality of our return to the pre-divestiture days of "The Phone Company" or alternatively "The Cable Company" is not very amusing.
While I often prefer to read and write about industry trends, exciting developments, and new ways to leverage technology, a lot of the work we do is not always so academic, lofty or even pretty. As consultants, we spend most of our time engaged in the "real world," where theory goes out the window. Magical charts, white papers, and even brilliantly written blog pieces are no help when clients run into serious problems - which they all do at some point.
Over the last several years, we have all observed a gradual decline in the servicing of our clients from the various vendors and service providers that we interface with. And while we all hate clichés (and all use them), the more things change, the more they stay the same:
All joking aside, I think it is important to note that things have reached a tipping point where service has degraded such that we need to start rethinking how service providers are being managed. Before we talk about these changes, let me take a moment to address three key concerns that have led us to this point.
1. The service role has completely transitioned to a sales role.
This has always been in flux, but it seems that in the past, there was at least a token attempt to provide customer service. The "account managers" at least played lip service to being there to help the account, and were generally supportive of keeping the customer happy.
This is no longer the case. "Account managers" are now purely sales agents. They are typically very inexperienced and live and die by their sales figures. I am even seeing cases where reps can be penalized financially for agreeing to credits to keep their customers happy. Their supervisors are little more than sales managers, cracking the whip on their folks for immediate sales. It is all about meeting short-term quotas.
So we end up with a situation where businesses are depending on someone who doesn't know what they are doing, isn't trained to take care of their customer, and can be penalized if they do. This would be less of an issue if it weren't for problem No. 2.
2. Bureaucracy is killing customer service.
As the service providers have consolidated over the last several years, internal bureaucracies have grown to a near governmental level. This trend has led to increased delays in nearly every aspect of service delivery and service. Installs take longer. Service call delays are increasing. Problem resolution is getting more and more difficult, as there are different centers all over the country supporting different services. None seem to know what the others are doing.
The bureaucracy is even difficult for internal folks to navigate. Getting simple billing adjustments implemented can take several months. You would think with all of the advancements in technology in the last 20 years things would be faster today than they have ever been. Instead, we see the opposite.
Problems 1 and 2 are made even worse by problem No. 3.
3. Account teams are less empowered than ever to service the customer.
Even if you have a good account manager, who is experienced and knows what to do, he or she is not empowered to take the action necessary to get things done. And in many cases, his or her supervisor can't do anything either. So he or she is left to navigate the bureaucracy to advocate internally for resources to take care of the customer - which we have already discussed as not working.
I had a client request a credit recently from a wireless carrier that took months to settle. And it took a VP of Finance (supposedly) to approve the $500 credit. In this case, we were dealing with all three problems even on the most minor of requests.
So what do we do about it?
We obviously can't change the way providers do their business. I suppose we can hope for someone out there to take a stand to get serious about customer relationships. But in the meantime, we need to get proactive in our approach to vendor management.
First of all, we can't rely on the advice of our vendors and service providers. There was a time when you could get by with this strategy, though it has never been a "best practice." But today, it has become much more dangerous due to the inexperience of the folks doing the selling. Another factor compounding this problem is the enormous pressure the reps are under to meet their numbers. These two things coming together are not a good recipe for success.
Secondly, we have to be much more proactive in monitoring billing. It used to be you could get by with periodic audits, as the providers would be relatively cooperative in issuing credits for mistakes. This is no longer the case. Today, we are seeing less and less cooperation, especially for mistakes that aren't immediately identified. The internal bureaucracies, where decisions are made outside of the account team, are making it harder and harder to get a fair settlement. And even if you get one, it can take 6 months or longer.
I am also hearing now about situations where "account managers" are pressured to generate new sales for every credit that is issued. So the response after a mistake is along the lines of, "Sorry we screwed up. We will issue a credit in 3 months, which will really take 6 months. While I have you, how about giving us more money to replace the money for the credit we are giving you back."
Thirdly, you need to look for ways to mitigate these concerns at the contractual level. There are things you can add to a contract to address how the account is serviced, how issues are resolved, and what penalties are incurred by the provider for failing to meet obligations. These CSLAs – Customer Service Level Agreements should be inserted into every large contract.
The final recommendation is simply to take a proactive approach in vendor management. Stay on top of open issues. Demand weekly updates and status calls with real progress. Remember that today you need the carrot (future business and expansion) AND the stick (contractual obligations) to move things forward. To do this requires more resources, but to ignore this problem is going to cause more trouble in the long run. And the added of expense of not taking this seriously in direct and indirect costs will greatly exceed the costs of getting it right from the beginning.
I wish I could be more optimistic about our industry, but I don't see anything trending in the right direction. There is very little competition on the service provider side anymore, and consolidation is continuing, to making competition even more scarce. I suppose the government could do something, but the Telecommunications Act of 1996 and the following decisions have had the opposite effect.
Timeless. Not a word we usually reserve for SNL skits from the 1970s, but unfortunately it fits this one - and the reality of its message.
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