Towards a full fibre CX in the UK

In the UK, the Department For Digital, Culture, Media and Sport (which, naturally, is responsible for defining the country’s broadband ambitions – odd set of things to throw it in with, perhaps, but that’s another discussion) has recently published a swathe of documents setting out its ambition for broadband infrastructure in the UK. The Future Telecoms Infrastructure Review (FTIR for acronym fans).

*SPOILER ALERT* The target it sets is for full fibre – FTTP – by 2033.

Quick reality check – it’s 2018. So why are we getting excited about this? And what does this mean for telco customers?

About 10 years ago, I wrote a feasibility study for BT looking at the different options for evolving its broadband network infrastructure. Make no mistake, the benefits of moving to full fibre are (on paper) significant:

  • Glass is (supposedly) far lower maintenance than copper, so you save a lot in ongoing costs. Although this does assume that some careless water, gas or electricity supplier doesn’t accidentally put a digger through your connection
  • Fibre optic connections can deliver higher speeds over longer distances, so you need fewer things between the end customer and your backbone to propagate and boost the signal. That makes it cheaper and less disruptive to build out – fewer powered kerbside green boxes – compared to copper which needs power to boost, manage and moderate the signal. Ultimately, you can even remove your costly exchange buildings.
  • Fibre optic connections are more stable. Unlike copper which will change its electrical characteristics – and hence the speed you get – dependent on the weather (and we get a lot of that in the UK), fibre should deliver the expected speed come rain, or shine.

From a CX point of view, this last benefit is potentially the greatest. Alongside billing, broadband speeds are the highest source of complaint to UK telcos – contributing to around 40% of all inbound queries. If a customer can reliably expect to have the speed they’ve bought all the time and, more importantly, get the services they’ve paid for delivered reliably all the time, then they should be a happier customer. Win-win.

So, if those are the benefits, why on earth haven’t BT been throwing all their money into rolling out fibre already? Let’s take a step back for a moment and look at a few reasons why full fibre is not necessarily the land of milk and honey.

  1. Access to communication services remains fragmented and prone to change, based on the relationships between communications companies. As the current situation with Virgin Media illustrates, customers can still lose access to TV channels, or other subscription services, through no fault of the technology delivering comms to their house.
  2. There are a lot of things between the computer, or TV/fridge/thermostat/baby monitor, in your house and the service you’re consuming which affect the quality of that service. The comms technology between your premises and the nearest exchange or cabinet is only one of these. The parts of the network where your data shares the road with other people’s data can become congested, even if the first mile to or from your house is clear. Think of it like driving down your private driveway to get to work, only to join a big traffic jam as soon as you hit the main road.
  3. More of those things which affect your speed exist inside your premises. Poor customer premise equipment (routers/hubs), dodgy internal wiring, or just pesky solid walls weakening your wifi signal will all stop you from enjoying the speed your fibre connection can deliver.
  4. It’s actually really expensive to lay a completely new network in the UK. Typically it’s around £1000 per address passed, so for the 26 million or so households in the UK, that’s an average of £26billion, before you even get to the business premises. At that sort of cost, it’s not exactly surprising that rollout has been slow and pragmatic thus far. While the savings in ongoing maintenance may ultimately pay this off, it’s a hard cheque to write.

Given which, it’s not surprising that the UK has spent time trying to squeeze more out of its existing infrastructure. Or “sweating the copper” as it’s been termed (don’t blame me for that one, I’m only borrowing the phrase).

So, at a point when copper broadband technology looked like it could only deliver 24Mb/s, and as HDTV was the new consumer fashion, of course it was easy to justify arguments to move off copper as soon as possible. Today, however, with innovation enabling copper to deliver over 500Mb/s, the picture is not so black and white. Whether the industry has done itself any favours by referring to this as “fibre broadband”, is another issue (and one which CityFibre, among others, would argue strongly).

Copper will still struggle to hit these headline speeds in various scenarios, so it can’t be the answer everywhere, but it’s done enough to justify its place in a mixed technology rollout; Allowing higher speeds to be delivered more cheaply and quickly (in theory) where viable over copper and focussing on full fibre in other areas.

From a CX perspective, as I wrote about before, if I can get the services I want, should I care whether the circuit going into my house is glass, or copper, or coaxial, or 5G or satellite? Certainly in an industry landscape where disagreements between communication companies can cut off subscription services and the number of providers of those services is ever-growing, having a particular infrastructure connecting my premises is just one of a number of factors.

So, what’s good for customers in this initiative?

The key will be in the new products and services which full fibre infrastructure enables. Whether it be through autonomous, self governing vehicles or smart cities, or wider availability of public wifi, IoT, plenty of new and disruptive technologies will emerge to take advantage of the higher bandwidth and 5G. Even in the short term, the convergence of fixed line and mobile data will enable greater simplicity for customers and extra benefits, should telcos choose to pass this on.

It’s fine for Government to set lofty ambitions, but if it doesn’t disrupt the things which inhibit achieving them, it’s no real help. The detail around the FTIR do seem to address some of these inhibitors. In particular changes to Streetworks (digging up roads to lay the fibre) should make this a more straightforward process. Moving away from a situation where a telco has to submit lots of individual approvals and encouraging Councils to look at the strategic picture when reviewing these plans can only help. More could be done to automate this process, there’s still a lot of manual hand-off in it but hopefully this is mitigated by the opportunity to work on larger plans.

Funding is another of those inhibitors. That £1000 per address figure will still loom large in the minds of telcos. One can argue about the rights and wrongs of Openreach being part of BT, or not, but it doesn’t change the need for investment to get infrastructure delivered. There is still work to do for the infrastructure builders to find ways of reducing this cost, whether that’s through new technology or process improvement, but seed capital for the investment cannot harm.

It will, however, be interesting to see how this plays out in the newly competitive infrastructure market. There was some simplicity in the time when a single infrastructure provider would be asked to deliver a network which all could then use. However, with more telcos now wanting to build and own their own network infrastructure, the risk of funding going to multiple organisations all building fibre in high demand areas and still leaving unprofitable locations untouched will need careful monitoring.

For customers, too, this may create problems and make customer choice more difficult. If part of the decision a customer has to make revolves around who owns the infrastructure and, hence, which services they can subscribe to, this may sustain a degree of complexity for the customer which currently revolves around the speed which Openreach can deliver – and whether Virgin Media also supplies them.

For telcos, gaining or retaining revenue streams will also be a challenge. If those new services are delivered by new companies, the ability for a telco to form a relationship with the service provider and gain a slice of the revenue is not guaranteed. Telcos came to the party on Netflix quite late, in some cases, at a point where many people already had subscriptions direct with Netflix. Forming a viable rival content service is an expensive and complex challenge, but it will be very difficult to recoup the investment (subsidised or otherwise) if you’ve not found ways to increase your ARPU or share of wallet.

The impetus added by Government – both in the public sector and private sector – to push with a clear focus on full fibre will help unblock many of the issues encountered so far. But telcos, Councils and service providers still need to put in the hard work to ensure this momentum isn’t lost or the CX opportunity fumbled.

Gavin Patterson, CEO, to leave BT: OK then cleverclogs, link that to CX!

BT have announced that Gavin Patterson will be stepping down as CEO of BT Group.

Given the disquiet from numerous, high profile institutional investors about the share price (which is at a 6-year low at the time of the announcement) it’s likely he left before he was sacked.

His time in charge has been very interesting for the Group, overseeing the acquisition of EE for £12billion, the further separation of Openreach, numerous restructurings, especially in the business and enterprise space, and the launch of BT Sport – in particular with some significant investment in rights packages, and £4.5billion spent on the English Premier League football and UEFA Champions League at the peak of that.

The continued troubles of the Global Services division, in terms of financial performance, haven’t been well addressed and 2017’s Italian accounting scandal where over £500million was lost haven’t helped either.

But during that period, other telcos have found it not to be plain sailing – Talk Talk suffered significant problems with cybersecurity, when vast amounts of customer data was hacked. O2 have experienced various wobbles from Telefonica and considered pulling out of the UK market, with their sale to Three being blocked by the regulator. Orange pulling out of the UK market altogether via merger with T-Mobile

So what was it that brought Patterson’s tenure to an end and, as the title asks, how is this related to CX? Hold my beer.

BT is unique among UK fixed line telcos in that it has a Universal Service Obligation. That means it is obliged to offer a service to every address in Great Britain. Other telcos can pick and choose what service they offer to which geographies, but there is a certain level of service which BT must offer to everyone. Initially, this was nothing more than PSTN – fixed line voice – but in recent years was extended to include broadband “at speeds that permit functional internet access”.

The definition of “functional internet access” – ie how fast is fast enough – is a subject of constant discussion. And very contentious discussion, for as long as a significant number of people remain stuck with comparatively very slow speeds.

For BT, and Patterson, irrespective of how fast their lucky, full fibre, customers could get their internet access to go, the argument was always going to be won or lost on the basis of how slow their bottom-end customers’ internet was.

Particularly after the investment of £millions by the Government in BDUK – which was intended to deliver high speed broadband to almost everyone – the fact that thousands of customers were stuck with internet speeds still measured in Kb/s not Mb/s was always going to shape the discussion.

Sure, there are mitigations: There’s a reason those final few thousand customers have still got slow internet – it’s very, very expensive to provide them with faster connections – in excess of £1000 per address. And, actually, even when they’ve got access to faster connections not enough people actually upgrade to the high bandwidth services to come close to delivering a return on investment.

But those arguments, however valid, weren’t going to win. So, I suspect what has ultimately cost Patterson his job is not connecting with what customers actually expect from BT (pun intended).

However much people might have liked to complain about Sky’s monopoly on sporting rights and price rises, actually there was some advantage in having one service to subscribe to, to get all your sport – if that was your thing. The need for BT to enter that market – at a cost of £4.5billion for European and Premier League football alone – was probably not a high priority in the minds of their customers.

Especially not for those customers whose internet connections weren’t fast enough to actually be able to subscribe to the TV services offered.

It’s a little facile to argue how much faster the country’s average broadband speed could have been if that £4.5billion had been invested in the network, given BT Group’s structure with Openreach, but given that the Government budget for all phases of BDUK was around £1billion, the comparison is there to be made.

As companies like Amazon, more readily associated with content provision, enter the UK sports rights competition – with suggestions that Netflix and other content providers may join in the future – was the step into content provision it the right move, at the right time for BT? Probably not. Their subscriber base for their TV service in general, let alone for the premium sport offering, never got to the point where it was challenging Sky. And that strategic decision was squarely Patterson’s.

A similar argument could be made about the EE acquisition. Was the country sitting, twiddling its collective thumbs waiting for BT to offer a bundled mobile service? Or was this a defensive, inside-out decision by Patterson, based on perceived need for a viable mobile capability and a sense that it needed its own network – some years after selling off O2?

As CEO of a company like BT you need to be able to make bold decisions. At a time when some of the core areas of its historic revenue streams were in jeopardy (such as call charges, as IP voice loomed on the horizon), some kind of content provision was always going to be a part of that. As was mobile. However they were, so far, expensive gambles that didn’t pay off.

And it has allowed the conversation to stay rooted on the traditionally weak aspects of BT: the digital have-nots; the perceived poor customer service; the newbuild home owners waiting months for their phone connection; the network operators having to wait months or years for a new ethernet connection (which itself led to the biggest fine Ofcom have ever issued for the deemed consent issues).

BT’s mission statement under Patterson was “Number One For Customer Service” and, as its NPS scores illustrate, it wasn’t getting close to delivering this – arguably due to the distractions of Sport, TV and mobile. The numbers were changing, slowly, but not in a way that was changing the conversation or addressing what customers expected from BT.

Arguably one of the final nails in the coffin for Patterson was the 2017 accounting scandal in Italy. Not just in terms of the lost money, although pretty much any company would notice £500million disappearing, but in brand reputation. For all the adverts starring Ryan Reynolds, complete with knowing winks to camera, Jeremy Renner and other high profile celebrities, there is a perception that BT is the SAFE choice, not the EXCITING choice. It may not be flashy, but at least it’s going to be reliable and work. If I can’t buy anyone else’s service, at least I can get something from BT. The fact that they lost so much money was (excuse the mixed metaphor) the last straw for many – erosion of one of the final brand values for BT.

So, there. Customer experience is about knowing what your customers want and delivering it. Gavin Patterson’s focus on diversification into new markets wasn’t what most of his customers wanted or expected. His pursuit of this, at the expense of deprioritising the services his customers did expect (decent broadband speeds, reliability) impacted the company’s bottom line, its share price and, ultimately, his job.

 

Carphone Warehouse – the CX lessons

You’ve probably seen the news that Carphone Warehouse have recently issued a profit warning and are expected to close 92 of their high street stores. At first glance that could just be another example of harsh trading environment in UK retail – the same as killed off Maplin, Toys R Us, BHS, Ultimo among others.

However, for Carphone, there are probably a few other factors which have led to this. To understand them, we need a quick history lesson.

Carphone started in the late 1980s, but flourished in the 1990s, at a point where the mobile market was new and experiencing significant growth. At that point, the only way to own a mobile was to purchase one – with a SIM – from a network operator. Carphone was a huge disruptor to this market, providing consumers with a brokerage service where they could directly compare networks, handsets and contracts.

As well as this indirect sales route, their other key innovation as a valuable customer experience was providing expert advice about the handsets and technology. At this point, mobile phones and networks were moving to GSM and then to 3G and opening up all sorts of new possibilities beyond voice calling and simple text messaging. As with any new technology, a key element of the experience for customers was guidance and support in understanding it and making choices that reflected their need.

So, what changed for Carphone? As I mentioned in a previous post, one of the key ways to deliver a good customer experience – and hence drive positive business results – is to ensure you are delivering what your customers need and expect from you. Critically, Carphone didn’t evolve their CX to keep up with the evolving needs of their customers.

The mobile market has evolved considerably in recent years. It is now a much more mature market, characterised by:

  • largely saturated in terms of penetration so now driven by churn, not growth
  • more stable technology – less need for customer education. Apart from the ever increasing bandwidth available from 3G to 4G and, imminently, 5G, the capabilities of the networks are largely stable.
  • Platform based environments – instead of needing the features of each handset explaining, the operating platforms – iOS or Android – are now the key ecospheres. There is always “an app for that” and, combined with bandwidth improvements, the key evolution is now about the quality of content that can be delivered (higher bandwidth allowing better definition etc) and the innovative services available over those platforms
  • Longer life of handsets – while manufacturers are constantly releasing new handsets, with the stabilising of the technology and platforms, it is no longer the case that you HAVE to upgrade each year in order to be able to do all the latest things. An iPhone 5 will still let you use social media, navigate or order an Uber, or a meal.
  • A more educated, knowledgeable customer base

This results in one of the key business propositions which Carphone had no longer exists – or certainly not to the same extent. The need to provide expertise and guidance to support their customers through a buying decision has largely evaporated and, as a consequence, a key driver is diminished.

While this spells trouble for Carphone specifically, it can be noted that the group has diversified from this already – establishing Talk Talk as a broadband provider in the UK, as well as the 2014 merger with Dixons to form Dixons Carphone and the move into MVNO with the launch of their iD branded mobile network.

So while the health of the group overall may not be critically impacted by Carphone itself, this does show how a failure to provide a CX which keeps pace with the needs of the marketplace can impact a business. If Carphone are going to return to profitability, they will need to revisit the needs of their customers and identify an innovative experience that will satisfy them. And they need to keep revisiting this to ensure it stays relevant.

If not NPS, then what?

Previously, I looked at the pros, and cons, of NPS as a tool for measuring your organisation’s CX. Today, having slain the dragon, I’ll try to help you rebuild the tatters of your CX life and identify what you should be doing if not NPS.

What was the problem again with NPS as a measure? A good question, I’m glad you asked. To recap, NPS is usually a very broad metric of customer response to a specific question and, as such, it bears little relation to actual business performance. Just because Company A has a higher NPS than Company B, you’d expect it to be… what? Larger? More profitable?

That’s clearly not true. BT Group has an overall NPS of around 15 and yet is a larger company than 3 (NPS of 27) or Vodafone (60). Similarly, BT TV has an NPS of 13 yet has far smaller reach than Sky (-5).

As an industry, telecommunications is ranked 16th out of 20 for NPS, lower even than Insurance (32 v 54 overall) and yet it remains a profitable industry.

To understand how to measure CX, we must first understand the impact it can have on a business. To do this, let’s look at some statistics:

  • 42% of B2C customers purchase more after a good customer experience
  • 52% of B2C customers stop buying after a bad customer experience
  • 24% of customers continue to use a vendor for more than 2 years after a good experience
  • 39% continue to avoid a vendor two or more years after a bad experience
  • 87% of customers who have a good experience will share the story with their friends (just under half via social media)
  • 95% of customers who have a bad experience will share the story with their friends (over half via social media)

So the picture starts to build. For starters, the underlying trend and business impact is that a good CX will lead to customers buying more, becoming loyal, repeat consumers and encouraging their friends to do the same.

And it seems that the negative consequence of a BAD experience is greater than the positive effect of a GOOD experience. Getting things wrong will turn more people against you for longer, whereas getting things right will impress fewer people and for less time. Some statistics suggest it will take twelve positive experiences for a company to recover from the impact of a single negative experience.

A good customer experience, then, is not an end in itself, it’s a means to a well performing business. The measure of a good customer experience is the measure of a successful business. And that has always has been about financial performance:

  • what is the churn rate of your customers?
  • what is your ARPU?
  • what is your share of wallet?
  • what are your customer service costs?
  • what is your underlying profitability?

If the purpose of a good CX is to have a financially successful business – and the way to achieve financial success is through good CX – how is this achieved? Again, there are a number of statistics about what customers want from a business, for example:

  • 69% of customers attribute good customer service experience to quick resolution of problems
  • 89% of customers get frustrated if they have to repeat their details to multiple representatives
  • 75% of online customers expect a response within 5 minutes

But here is where the real work comes in. Not all companies are the same. They don’t all target the same customers, or customer segments. Their services are not all identical. It is vital to understand what YOUR customers want from YOUR company, not what theoretical customers want from a theoretical supplier.

There are two key questions:

  1. How is your customer experience defined?
  2. Does it meet what your customers expect from you?

Defining a Customer Experience

Some companies are (arguably) today a brand before they are a vendor. An Apple fanatic is very unlikely to switch to Android unless something very drastic happens. An Omega watch enthusiast is unlikely to give it all up and switch to Tag Heuer just because of one bad experience. The driver of a Jaguar won’t switch to Dacia without a significant change in circumstance. But an environment like this is a rarity and one that is earned over a long period.

More relevantly, a quad-play telco customer who follows Premiership football is unlikely to switch to a provider without TV & sport offering

Apple, Bentley or Omega’s customer experience is far more than a single transaction. It’s more, even, than a full user journey from identifying a need, through purchase to ownership and in-life service. These brands have earned that status, built that customer experience, through a combination of their product, its price, knowing what their customers want and having processes in place to deliver it. In some cases, like with Jaguar, this reputation will keep the company going even when the product itself falls below the established, and expected, standard.

The quad-play customer won’t be watching Everton v Huddersfield on a Sunday afternoon just because of Sam Matterface.

Which leads on to:

What your Customers Expect From You

Your customer experience is a result of everything your company does, not just how much you charge for delivery, or how fast your call centre responds. It includes the company’s products, prices, processes and – increasingly now – its social responsibility position.

Apple, Jaguar or Omega customers don’t buy them because they are cheap. Xiaomi, Dacia and Casio customers don’t buy them because of the great after-sales service and reliability.

While statistics like those, above, can provide general trends on what customers want to see, to feel they are getting a good experience – no successful corporation sets out to provide slow fault fixes to customers or intending that issues have to be handed off to multiple agents, or to offer a poor service – it is important to understand how your customers see you and what they want from you, in order to be able to offer the right customer experience.

Talk Talk Group make few bones about being a value B2C telco. There is not a high degree of automation in their back office and it’s recognised that their customer service can be slow. They tend not to compete on high bandwidth services to consumers.

Real sport fans have, traditionally, taken Sky subscriptions and Sky capitalised on this to offer quad-play telco packages, adding mobile, fixed and broadband. BT Consumer has lived on its position as the “monopoly” (or Universal Service Obligation) supplier to try to appeal to everyone – starting with traditional telephony and recently entering the TV and sport market. It’s products are relatively expensive in the marketplace and this is not always reflected in the services received. This has allowed other players to steal a march on fibre broadband (Eg City Fibre) or mobile (Three, Voda) or content (Sky and now new entrants like Amazon or Netflix). And yet BT has several million residential customers.

Perhaps this is reflected in their relatively low NPS. And for TTG, they remain a significant player, despite an NPS of -30.

Understanding the expectations of their customers is a key business driver for both of these companies. No company can afford to watch their financial results decline, irrespective of their NPS score’s trend, and then start to ask the question of where they are failing their customers.

Next time we will look at how true CX insights are achieved and how this can be used to drive business transformation.

Is NPS the right measurement to understand your business performance?

Let’s talk about Net Promoter Score for a moment, shall we? First, let’s just make sure we’re all on the same page – a definition:

NPS, at its core is a calculation of customer responses to a question, typically something like “How likely are you to recommend <thing> to a friend or colleague?” with answers being on a 1-10 scale.

To get your NPS score, you take the number of “promoters” – those rating either a 9 or 10 – and subtract from it the number of “detractors” – those rating at 6 or below. You then end up with a score somewhere between -100 (all detractors) and +100 (all promoters).

So, there we go. Simple. Contact your customers, ask them how likely they are to recommend you, do the maths and wear your NPS score like a birthday badge if it’s good, or bury the results and make lots of announcements about how you are now “seeking to be a customer-focused organisation” if it’s bad.

Good work everyone, double espressos all around, back to the day job.

Or not. Hopefully. To really understand the experience you’re offering to your customers, is NPS enough? Can it be more than a headline number? And, if not, what are the metrics that really matter when trying to understand your customers’ experience of you.

For starters, it’s worth acknowledging that NPS can be measured for different things within a company. The Brand level is where many organisations focus and where many industry reviews will begin and end. At this level, NPS probably is little more than a birthday badge – who has the biggest number; whose is the most popular brand.

Transactional NPS works at the level of an individual interaction. As a customer you’ll have experienced this after an online chat request, when your support agent asks you to complete a survey asking whether they resolved your issue. At this level, you can start to build an impression of which interactions and capabilities work well in your organisation.

But At any level, NPS is not without problems. A few observations:

  • Are all 8/10s equal? For me, 8/10 may be a really good company – one that I’m very happy with. After all, 80% is an A-grade in most examinations. Everyone has room for improvement somewhere, but you’re good enough. Yet, according to the method, this only makes me a “passive”; I don’t contribute to your NPS score. Catch me on a bad day (one which may not even be your brand’s fault) and I might be inclined to only rate you 6/10, even for the best outcome. That makes me a detractor. So, my view of why I have given you the score I did will be personal to me and influenced by my context and circumstance
  • What you mean to me may also influence how I response to the NPS question. Honestly, if I find myself in a position where I’m talking about mobile phone packages, or haemorrhoid cream or accounting software, let alone having to make a recommendation to a friend or colleague, I’m going to want to re-examine my choices in life. So the fact I’m scoring you 5/10 doesn’t mean I don’t like your product or service, it just means I don’t want to be the sort of person who discusses the relative merits of Wifi extenders.
  • Why do I like/dislike you? And here we start to reach the core of the problem with NPS: What is my reason for giving you the score I did? Maybe your product is OK, but your customer service is bad. Or you’re a good company but your products are just too expensive (or a lousy company with cheap products).
  • Context is king. If I’m buying a product, especially one that I’m excited about like the brand new smartphone, I’m likely to be really happy with any sales process that lets me buy it, unless you really screw it up. If I’m querying an error on my 5 page phone bill, or trying to find out why my “upto 40Mb” broadband line is only getting 17Mb, I’m unlikely to be delighted with the outcome unless you can work some magic.

You could argue that these factors balance out: the people having a bad day and marking low are cancelled out by those having a good day and marking high. Or you could say that these factors will apply equally to every company, so you still end up with a valid way of comparing your company’s performance to your competitors’.

However, what you do not get out of an NPS score is a good vision of the business functions in your company that need to change and how they need to change to make you an industry leader, or even a better company.

Coming up in part 2… If not NPS, then what should we be measuring?

Setting the Right Expectations – a CX Cornerstone

The route to the top of Customer Experience in the Broadband market, especially in the UK, has been fought, as much as anything, over headline speeds for downloads as any other feature.

BT offer an 80Mb speed, Virgin trump it with 100Mb. BT counter with 150Mb, Virgin respond with 200MB and so on, seemingly ad nauseum.

In some UK telcos, complaints or queries over broadband speed can comprise upwards of 40% of the inbound calls and queries from customers. Only billing rivals speed as a source of customer dissatisfaction; all other issues are some distance behind.

And, to be honest, it’s not really surprising. With most other goods and services, you expect a correlation between what you’ve been sold and what you get. Buying a backpack or suitcase advertised as “holding upto 80 litres” only to find it would struggle to hold half that volume would lead to complaints, so why not a broadband service that claims to offer “upto 80Mb” but in practise only gives 40Mb?

From a technical, network perspective there are dozens of reasons why broadband speeds vary from house to house, let alone country to country and the purpose of this blog is not to explore them in depth. Suffice to say that – for the most part – in countries such as the UK which rely predominantly on copper connections, the longer the wire – the slower the speed. And the more people using the network the slower any one person’s experience of it will be.

New rules are coming in which will seek to address this head on but, as with many other technology-related laws it remains to be seen whether the intention matches the outcome. I’m sure that nobody involved in the legislation regarding cookies used on websites intended to leave every internet user plagued with notifications taking up the screen every time they visit a website.

There are two key lessons for fixed line telcos to learn here. One is, perhaps, more obvious than the other. The more straightforward-sounding lesson is to be more honest about what the customer is being sold.

The new legislation will help towards this. It is obliging CPs to move away from selling broadband based on a headline “upto” speed and towards an average speed. There will be a formula that CPs have to use to determine what figure they can use for this average speed – based on a distribution curve of what customers currently taking the product receive today; speeds achieved during quiet periods ( weekday mornings) and those achieved during the busy hour (typically early Friday evenings) for customers of the same type as them.

It should go without saying that a customer sold a broadband package on the basis of “average 40Mb download” is likely to be happier with the purchase if he’s getting 40Mb, than if he bought the same thing when sold as “upto 80Mb download” even if everything apart from the name is identical between the two. Set an expectation with the customer that you can, and will, meet is hardly rocket science in the world of CX.

Dig a little further beneath this, though, and things will get a little more complex. Especially in a market like the UK which has such a mix of technologies delivering broadband; where some customers are still stuck on technologies that cannot deliver more than 8Mb, others 16Mb, still others on 24Mb, right the way through to the annointed few with full fibre (FTTH) connections who can get hundreds of MB.

Even worse, millions of premises will be served by more than one of those technologies, meaning someone could be paying £40+ per month for an “upto 24Mb” service when a cheaper, faster service is already available to them. And, to complicate matters further, for some people their speed on the faster service may actually be lower than their actual speed on the slower, older technology.

Still with me? Phew!

So, confidence that this new legislation will guarantee a country full of happy customers, who are getting exactly the broadband service they want and need is, understandably, not quite at 100%.

Maybe it should go a little further? Gas and electricity suppliers have recently been obliged to start telling existing customers whether they are on the cheapest tariff. Maybe telcos should be obliged to provide clear options to customers about the services available, a realistic view of the performance they are likely to recieve, and their cost? For example

  • You are currently paying £40/month for our 24Mb service and you are getting an average of 21Mb
  • You could switch to our £25/month service where we predict you will get an average of 38Mb
  • Or our £30/month service where we predict you will get an average of 72Mb

Certainly, most telcos will have these facts to hand, based on their own knowledge of their network and its performance.

However, this leads to my second suggestion on how to improve this experience. What do these numbers mean, to ME as a customer?

Based on the example, above, I can see that it’s silly for me to be paying more for a service that gives me less. But what does 38Mb actually mean to me? Do I need that extra 34Mb, or will I just be spending £5 a month I don’t need for a 72Mb product?

If you are a quadplay telco, your range of products and options for customers to choose will already be hellishly complicated – different TV packages, sport or no sport, HD, SD, Netflix, on demand, IP calls, PSTN calls etc etc. Asking customers to also choose whether they want 38 or 72 (or 150 or 300 or whatever the future offers) is an unnecessary complication.

Bandwidth does not need to be a primary differentiator. In itself it does not do anything for your customer, apart from a tiny bragging right to their mates, for some people. For the rest of us, bandwidth is a means to an end.

Living on your own, or not interested in streaming ultra-high definition content? You’re unlikely to need more than 16Mb. Ever.

A switched-on family with kids at home? Likely to need to support multiple HDTV streams and HD sport and gaming (and uploading a Twitch stream) and phonecalls? Much below about 60Mb is going to mean someone in the household will miss out.

So maybe the smart way to resolve the customer experience around broadband is to stop making the broadband customer experience about speed and move it to services. In the immediate term, this would remove issues around customers who are paying for an “upto 80Mb” service and only receiving what they’d get from a cheaper “upto 40Mb” service – and eliminate potential cases of mis-selling.

In the longer term, this gives customers a simpler buying experience and, in all likelihood, a simpler in-life service experience. Ignore whether I’m getting 40, 80, 150Mb and focus on whether I’m consistently getting the services I’m paying for at the quality I expect:

  • Do all my Netflix films stream in HD?
  • Does my football match, or grand prix buffer?
  • Does my audio download jitter?
  • Are my phonecalls clear?
  • Do my online games lag?

If the answer is always yes, your customers won’t care what their download speed is and customer satisfaction should improve. Sustainably.

New Services, new customers – a new, old challenge for the telco industry

The comms industry faces a variety of challenges to remain profitable – against a background of falling mobile handset sales and the move away from traditional calls revenue towards IP voice services. The key defence against this is by growing new revenue streams through enablement of new services to customers. And the common feature that these services need is higher bandwidth links to the customer.

Providing more bandwidth will invariably require some uplift in physical comms infrastructure, whether in the exchange, mobile mast deployment, roadside cabinets, the cables between them or the cables out to the end customer’s premises. Delivering this infrastructure is an expensive, complex process typically requiring (in the UK at least) coordination with Government agencies and numerous third parties. While the model may differ slightly between countries with an established fixed-line network and those which are more mobile based, similar challenges can be found.

As well as being the means to increased revenue, infrastructure build is a very expensive activity and, when managed poorly, one which can lead to a high degree of wasted investment. There are two headline metrics for this:

  1. The cost per end customer to deliver new infrastructure. This is typically around £400-500 per customer, but can be as high as £700-800
  2. The %age of spend which ends up in the ground, delivering services, as opposed to being wasted on management, rework or other cost of failure. Again, while the average is around 40-60% of investment actually being spent on infrastructure, some companies struggle to reach half this figure.

The efficient delivery of infrastructure depends on a well managed lifecycle, to:

  • identify the demand within a particular geography (a street, housing estate, exchange area)
  • prioritise the areas of high demand – those which will generate the greatest return on infrastructure investment
  • understand the “bill of materials” needed to deliver working infrastructure end-to-end
  • manage the build of this infrastructure to an efficient and timely completion
  • bring the new infrastructure into active use and be able to sell products and services to end customers, through it
  • maintaining an ongoing view of existing uptake and future demand to feed into the build plan

While it may be simple to think the customer’s concerns focus on straightforward purchasing a service once the infrastructure to support it is available, brand reputation and customer satisfaction can be impacted much earlier than this. Chief amongst these Moments That Matter to the customer will be a lack of communication during the build phase, especially over any delays that might arise which will impact the date when the promised service will be available.

At this stage, the customer’s expectations will be high. They will have been contacted by the telco to identify their interest in new services. They may have been offered promotional rates, as an inducement to sign up early to the new services. They will believe that any dates communicated to them are committed. As a bare minimum, it will be necessary to provide regular updates to the customer, reassuring them that work is progressing according to plan. In situations where delays arise, customers will value honesty and transparency over this with early visibility of issues and changes to plans.

As more companies move into infrastructure build, within the UK at least, customer experience will be impacted by a wider number of moving parts. Some telcos may take direct ownership of all aspects of the plan and build; some telcos will outsource some, or all of their plan and build activities to one, or more, third parties; while others will remain in the retail-only space, reliant on infrastructure built by other organisations.

Those companies managing, or controlling their own infrastructure build will want to ensure as much of their investment goes into service-delivering infrastructure to maximise return on investment and reach the greatest possible footprint.

In all of these scenarios, it will be vital to provide customer experience differentiation, through a tightly integrated stack which allows marketing data to drive planning decisions; planning to be efficiently allocated to labour teams; the progress of those labour teams to be closely monitored, optimised and reported on, both internally and to customers; and for revenue income to be maximised by efficient sales enablement.