CX Transformation Benchmark

Tigo’s (Bolivia) Service Quality Initiative

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Tigo’s (Bolivia) Service Quality Initiative

/ Strategy, Customer Experience, Strategic management
Tigo’s (Bolivia) Service Quality Initiative

Implementing customer satisfaction initiatives in foreign service environments: Do other markets behave the same?

Customer Care Measurement & Consulting’s (CCMC) latest study of consumer rage has found that technology is the single, key point of pain that drives consumers nuts. In the original study, first sponsored by the White House Office of Consumer Affairs three decades ago, the most prevalent serious consumer problems were associated with automobiles, banking and appliances. In the seventh wave of the CCMC’s National Rage Study we found that 50% of most serious consumer household problems now involve smart phones, computers or Internet technology.

Additionally, sources of pain and anger have changed. Previously the key cause of angst was the money lost. Now, more important than money lost (surprisingly now only $160) is the amount of time wasted trying to resolve the problem, a median of five hours. More troubling, over 20% of consumers did not even bother to complain to the offending company about their most serious problem because they felt it was hopeless. Of those who did, two-thirds found it was, indeed, hopeless achieving resolution. But, they did attempt to exact revenge against the company telling a median of 29 people negative things about the company (versus 10 people positive things when problems were effectively resolved).

Two questions are:

  • Is this behavior the same in other environments?
  • What are effective means of assisting consumers in both avoiding problems with technology and, when they occur, getting them quickly resolved?

CCMC has researched these two questions in several countries in Europe and Asia. Similar research has now been completed in Latin America. The following case study is a great example of how an international telecom company used this research to create a competitive edge. Tigo, the Millicom Cellular brand, has made good progress in answering both of these questions.

Millicom, marketing as the Tigo brand, is the leading cellular telecom company in Latin America and eight countries in Africa, with over 80 million customers. In most countries, Tigo is the leader in market share and competes by focusing on providing value rather than competing on price. For Tigo, value means service and quality.

Are Problems and Customer Behaviors Similar?

The company surveyed its customers in Bolivia using a text invitation with a link embedded in it. The 2,500 customers who responded were a representative sample of both the prepaid and post-paid market segments based on demographics and usage. While a strong majority of customers said Tigo was best, a significant percentage of customers also reported encountering problems. Like the CCMC National Rage study, problem occurrence did significant damage to loyalty and fostered negative word-of-mouth.

The high-value segment told a median of three people about their experience if they were satisfied with the service response; nine people were told if the customer was left dissatisfied; and six people were told if the customer did not bother to complain. As in the CCMC National Rage studies and CCMC research in Europe and Asia, about half of customers did not complain about their most significant problem. If they did not complain, loyalty was damaged by 25%. Additionally, the non-complainants were still spreading negative word-of-mouth. Finally, for certain types of problems, complaining generally did not result in satisfaction, so Tigo incurred the cost of service with no payoff of enhanced loyalty. The analysis showed that the response process and CSR empowerment was not adequate in for these problem types.

On the other hand, if they complained and were satisfied, loyalty was at least restored and, for some segments, willingness to recommend Tigo was 10% higher than if they had not had a problem.

The analysis showed that even though more than two-thirds of customers indicated that Tigo was the best cellular company, they still encountered many problems. These problems ran the gamut from confusion on sales plans to incorrect purchasing to network and service issues. Many were caused by communication issues, some were caused by broken processes and some were caused by employee training weaknesses.

Helping Customers to Cope With Technology

The data suggested three important strategies for strengthening and further enhancing Tigo’s leading position. These strategies included:

  • Problem prevention—there were a series of issues which were preventable via better communication/customer education and process changes.
  • Proactive communication—there were a number of unavoidable situations which could create unpleasant surprises that customers must be made aware of them in advance.
  • Enhanced response—areas where the store and phone center customer service representatives (CSRs) needed better tools and empowerment.

A fourth strategy implied by the data would be aggressive solicitation of complaints to tap those which are unarticulated, but this was deferred until the level of response success could be increased. Soliciting complaints and not resolving a significant percentage of them creates additional expense but also does additional damage to loyalty.

Improvement Strategies

Tigo took action in all three areas, focusing its efforts first on the premium segment where the greatest profits was at risk as well as where expectations were highest. Each of these initiatives is described below.

Problem Prevention

Problems were prevented via process improvements as well as educating customers to avoid unpleasant surprises. For instance, Tigo:

  • Simplified the renewal process for postpaid customers who were renewing their contract, eliminating an unnecessary new credit check
  • Simplified marketing offers to eliminate confusion—this is similar to what Dan Hess did when CEO of Sprint in the United States—he reduced marketing offers by 80% and was able to close over a half-dozen call centers due to reduction of call centers associated with that one topic.
  • Modified the account change process—it was found that customers were often charged for changing from one plan to another, even when the change was suggested by a service rep. The process was modified to eliminate charges.

Proactive Intervention before Complaint Phone Call or Store Visit Occurs

There are many situations which are known to create unpleasant surprises for customers. If the company warns customers in advance of encountering the problem, it conveys it cares, mitigates the anger and often and prevent the problem from occurring. In fact, educating customers of possible issues is a powerful delighter (creating up to a 30% increase in willingness to recommend) and often leads to actions that reduce the problem occurrence. Therefore, Tigo:

  • Warned consumers of the difficulties they would encounter if they purchased and attempted to use off-brand phones—customers often did not understand that off-brand phones were not as technically capable as the brand-name phones. Therefore, when calls were dropped or the connection was bad, the network was blamed rather than the phone. Customers who were thus educated often either bought a high-quality phone or at least did not blame Tigo for their difficulties.
  • Educated customers that faster download speeds, viewed as a competitive advantage, also could lead to much larger volumes of data being used, which would increase costs. If they were told in advance they would not be so likely to call and complain.
  • Enhanced the website and the store environment with short educational videos. CCMC has found that a high percentage of consumers will visit the website FAQ section first, especially if available on a mobile app. Customers who will not read two paragraphs will watch a 45-second video explaining an issue.
  • Mapped the end-to-end customer journey to identify opportunities to enhance the customer experience at every touch point.

Enhanced Response

Once a problem occurred, it was critical that the problem be resolved on first contact. As in other marketplaces, we found that premium customers were more sensitive to experience than just simple operational performance and had higher expectations for the overall interaction. Therefore, Tigo moved away from traditional efficiency metrics like average handle time and service level to customer experience, which often also improved efficiency at the same time. Specifically, Tigo:

  • Eliminated many transfers by creating multiskilled universal CSRs. Previously, when customers called the need to transfer them to a specialist caused additional cost and customer frustration. Tigo first made these representatives available to service high-value customers. This also reduced talk time because customers were not required to tell their story multiple times.
  • Reduced wait times in the store and in the call center via three strategies. First, staffing schedules were revised. Second, staffing levels in stores in critical neighborhoods were increased. Third, special queues were created for high-value customers, also staffed by the multiskilled CSRs.

Impacts

While many of the above improvements are still in processes, there are already process and outcome metrics that indicate that the strategy is working. These include:

  • Premium customer churn, a critical outcome metric, has been reduced by at least 15% year over year.
  • Problems with premium account servicing are lower.
  • Customer willingness to recommend Tigo, as measured by tracking surveys, has increased by more than 5% . This means there is more positive word-of-mouth on the street, reducing the need for investment in marketing and competing on price for the higher margin premium market.
  • Customer service staff turnover has been reduced.
  • One metric that is still constant is service call volume—it has not declined but as issues are eliminated and access improved, it is possible that customer complaint rates are up, which is a good thing—companies can only resolve problems they hear about.

Conclusions and Learnings

These results provided two key findings. First, the customer behavior suggested by the National Rage Studies and other CCMC research was mirrored in the Bolivian market. Secondly, the service quality strategies used elsewhere are directly applicable in Latin America. However there were several learnings about what led to success.

1. Local and operational champions are critical—quality initiatives cannot be implemented by top-down mandates, there must be local executive and operational management buy-in. The research was critical in demonstrating the damage problems were doing and the amount of revenue which was being lost by granular type of problem. The experiences and customer behaviors were accepted by local management because it made sense—the research quantified the damage being done.

2. Share successful practices across operational units—recognition for innovation and good works goes a long way. Plus, it shows other units that improvement is possible and often not expensive. Better a small success and, even when things did not work, there was recognition and credit for trying and learning from what did not work.

3. Create governance of VoC and CX—there is a right way to do measurement and set priorities. These best practices and use of process measures did not impede the freedom to experiment, but did assure that the results were valid and believable. Having said that, use rigorous measurement and assure that local management gets most of the credit for improvements. Remember that consultants are most successful when they make their client look good.

4. Focus on small quick successes—massive projects consume too many resources and limit the number of initiatives. Local small experiments have a higher probability of success, partly due to local control and buy-in.

5. Communication of actions and successes is key for both recognition and to provide others with hope that things truly will get better.

John Goodman

John Goodman, Ari DeSousa, Carlos Zuniga

John Goodman is Vice Chairman of Customer Care Measurement & Consulting. He is the author of “Customer Experience 3.0” and “Strategic Customer Service,” which is available in Japanese and Spanish.

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