Telecoms company Eir discovered the expression that there’s no such thing as bad publicity doesn’t always ring true..
Eir made headlines for all the wrong reasons this week when it was branded “a disgrace” by a judge, and fined for breaching regulations governing how customer complaints should be handled.
The company had employed a deliberate policy aimed at preventing customers from logging complaints.
The case not only put the spotlight on customer service and experience, it also showed that ignoring complaints can be detrimental to business.
How important is good customer experience to a business?
Businesses operate in a highly competitive landscape where customers have more choice than ever.
The interaction between a business and its customer is the biggest differentiator for any company, so customer experience is everything.
The CX Academy publishes its annual Customer Experience report every October.
Eir has a long history of criticism when it comes to customer service. It ranked 143 out of 150 companies spanning 11 business sectors in last year’s report, though it was the brand with the most improved score.
Most companies basically deliver the same products and services, and price points are often pretty similar, so customer experience (CX) is one area where a company can stand out, according to Michael Killeen, Chair of the CX Academy.
Each year, The Reputations Agency publishes the RepTrak report, which examines the reputation of 100 well-known organisations and businesses in Ireland.
“Providing a positive customer experience is the number one way to drive reputation, build trust and ultimately gain stakeholder support,” said David O Síocháin, Head of Communications at The Reputations Agency.
He said customer service underpins the core promise made to customers in providing a service or product and reinforces a positive relationship between a business and its customers.
“Our advice to organisations is to understand the foundations upon which your reputation rests and deliver on your core value proposition to customers,” Mr O Síocháin said.
How detrimental to a business is bad customer experience?
Anyone who tuned into Joe Duffy on Liveline on RTÉ Radio 1 this week, will have heard Eir customers’ complaints.
According to the CX Academy, research has proven that customers will tell 3 or 4 others about a great experience, but they will tell 10 or more about a terrible experience.
Customers who ‘talked to Joe’ told hundreds of thousands of listeners about their experience with Eir.
There are also many social media platforms available for sharing negative stories about a brands performance, and their reach is widespread.
“A bad customer experience has the potential to have a huge impact on a brand’s reputation – and sales,” Mr Killeen said.
“If the story makes for compelling viewing and goes viral or the person who had the negative experience is well known, forget potential, it will have a huge negative impact full stop.”
Are complaints of any value to a company?
Complaints are invaluable to a company.
Eir chose to ignore customer complaints when in reality the feedback could have proved fruitful, according to experts.
A complaint provides customer insight and offers an opportunity for organisations to identify areas of improvement.
It is an opportunity to listen to customers, find out the issues, fix them, and avoid further losses.
“Complaints if not managed well over a prolonged time can have a detrimental impact on a company’s reputation as it can lead to the perception that the company does not value its customers or is not committed to delivering on the promises it has made,” said Mr O’Síocháin of The Reputations Agency.
“Conversely if a company engages proactively in its customer service offering these positive touchpoints can result in increased levels of trust, endorsement and advocacy which are all drivers of a strong reputation.”
According to the CX Academy, customers that complain generally want to continue doing business with the company, but the company needs to address the issue quickly and empathically.
“A lot of companies in Ireland today tend to look at complaints as a problem when in fact they are a superb opportunity to address the issue and convert an unhappy customer into someone who will now be delighted to become an ambassador for your business,” Mr Killeen said.
“When someone bothers to complain, they are deep down saying that they want to continue to do business with you into the future as long as you can address the issue fairly.”
Most importantly, companies should note that customers are entitled to lodge a complaint.
After the Eir case this week, ComReg’s Director of Retail and Consumer Services Barbara Delaney said customers were “frustrated by Eircom from lodging complaints, they were not allowed to lodge a complaint and that was purposely done and I think it’s important that that was highlighted and that can never happen again”.
She said the main message for consumers was: “You are entitled to lodge a complaint. You must get a complaint reference. You must get an acknowledgement within two days.”
For its part, Eir said it fully complies with ComReg complaints procedures and has a dedicated, specialist team in place tasked with ensuring all complaints follow the ComReg process accurately and expeditiously.
It also said that its care agents are trained to escalate ComReg complaints to this team.
“We acknowledge that the language previously used in training material could have been clearer in this regard,” it added.
Why do customers often rate their experience with telecoms companies negatively?
The sector has a major disadvantage over all others in that it is highly complex and if a customer’s phone or WiFi drops, it’s a critical interruption to their day.
The phone is now the most important device in our personal and professional lives, so when you have an issue it’s more likely than not, significant.
If a supermarket runs out of milk, it’s easily fixed by going to another shop. A problem with a phone or broadband is not as easily fixed.
So what can the sector do to improve?
The first thing they need to do, according to Michael Killeen of the CX Academy, is stop focusing on shareholders’ needs over customer needs.
“When we look at the bottom five performing brands in our CX table, they are brands known to be fixated with shareholder value, while the top ten companies are genuinely committed to helping their customers every day.”
He believes a customer focused approach is the reason why credit unions have come first in the CX report each year over the past 9 years.
The second thing the telco sector needs to do is to focus on existing customers rather than continually chasing more new customers.
“Unfortunately, this is linked to the shareholder issue, as the drive for new customer is partially driven by stock exchange valuations that place a higher value on annual figures for new customer acquisition rather than the longevity of existing customers who stay with brands over the years,” Mr Killeen said.
How difficult is it to salvage damaged reputations?
The Reputations Agency believes most reputations are salvageable, but the process requires a commitment to deliver on the promises that have been made to customers to re-establish trust.
“It requires a laser like focus on the areas that have the biggest impact on the customer’s perception of your reputation,” Mr O’Síocháin said.
“Understanding these push and pull factors provides even the most damaged reputation with the opportunity to rebuild trust and the foundations of a good reputation over time.”
What do the sector – the companies and the regulator – need to work on?
It is relatively straight forward to switch energy providers, but there is genuine fear among consumers about switching broadband suppliers.
Broadband is essential for people who work from home, and they cannot be without it even for a short period of time. Even teething problems after switching to a new provider are a headache.
Mr Killeen said this is not just acting as a disincentive for people to move but also means companies can be slow to address issues as quickly as they should, because they are relying on the fact they are dealing with a ‘captive audience’ or that due to inertia customers will not walk away.
He also said ComReg needs to work with all the telecoms companies to devise solutions to poor customer experience which some consumers are currently experiencing.
“That means sitting down around the same table with the various service providers and really importantly also with consumers and consumer representatives,” he said.
“The days of thinking about what consumers want need to be consigned to the dustbin. Just ask them – after years of terrible customer experience, they won’t be shy in telling you.”
