Enhance your customer experience. News about 0870 and other dialling codes

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Enhance your customer experience

News about 0870

and other dialling codes

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3 Executive Summary

The UK’s regulator, Ofcom, has decided to change the rules that apply to 0870 numbers . From st February 2008, all operators will be required to charge callers no more to call an 0870 number than it costs them to call a “geographic number”, with a dialling code starting with 0 or 02 . As a result, the amount callers will be charged will reduce substantially, essentially eliminating the chance for organisations using 0870 numbers to generate revenue .

So what should you do?

In this white paper, we explain what’s going on and the options organisations can consider . In some cases, it will be a simple choice between keeping the same phone number or continuing to make money from calls . Organisations can’t do both .

More likely, however, is that organisations will want to take the opportunity presented by this change to review their contact strategies and discover something that’s better suited for the future . A position in which businesses, government bodies and others provide services free to the public through their websites but receive payment through the phone bill when provided to callers is unlikely to be sustainable . Customers will expect the experience, the principle – and cost – to be similar no matter how they choose to do business .

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Forty years ago, the options for contacting companies, charities and government organisations were limited . You either had to write to them or visit one of their shops or offices. Hardly anyone used the phone – it was expensive and organisations just weren’t set up to take calls from the public .

The situation has changed a great deal since then . When Yellow Pages launched its “Let Your Fingers Do The Walking” campaign in 970, only a third of households had a phone [] and call centres were virtually unheard of .

By the mid 990s, almost everyone had a phone at home and call centres had become a major industry . Services behind numbers like 0800, 0845 and 0870 had been developed to encourage customers to make contact by phone and allow organisations to handle calls more efficiently, with the added advantage that their number was a UK one rather than a local geographic one . Other services – 0844, 087 and 09xx – made it possible for organisations to generate revenues by providing services over the phone . Call payments also became available on 0870 and 0845, although this was not the case at launch .

But that was 0 years ago – 0 years that have seen huge changes in the way we all live, work and communicate .

Mobile phones have become commonplace, completely replacing fixed-line telephones in some households. The way we pay for phone calls – from fixed or mobile phones – has changed, with the introduction of calls-inclusive packages. And the internet is fast replacing the phone as the customer’s preferred way of making contact .

Ofcom’s recent decision about the future pricing of calls to 0870 numbers, as a result of increasing consumer concerns around revenue share within 0870, means that businesses, charities and government bodies now have until the end of January 2008 to review what role, if any, 0870 will continue to play in their customer contact strategy and act on their decision .

This white paper sets out some of the alternatives they may wish to consider .

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5 What is 0870?

In the early 1990s, distance was a significant factor when it came to making phone calls . Calls to numbers on the same exchange cost less to call than those to a town say 20 miles away . They, in turn, were cheaper than calls made to the other end of the UK .

This was a problem for organisations that wanted to do more of their business by phone, or wanted to operate nationally, and be seen to be doing so . To start with, the higher cost of calling was a deterrent to customers who lived further from the shop, office or call centre. It also limited the organisation when it came to choosing where to locate its call centres . Labour was often cheaper in remoter locations – places it was expensive for most customers to call .

Several ranges of ‘non-geographic’ phone numbers were introduced to address such issues . Those available from BT, for example, include 0800, 0808, 0844, 0845, 0870, 087 and 09xx .

What non-geographic numbers all have in common is that the cost of calling them is the same from Lands End as it is from John O’Groats or, for that matter, everywhere in between . There are three differences between different non-geographic numbers:

• the amount the caller pays

• the amount BT charges or pays the organisation that’s called • the rules that apply

Currently, the situation for BT customers is as in the table below [2] . Where customers have selected a different tariff or make calls using mobile phones or VoIP-based services such as BT Total Broadband, prices may vary . They will also be different when calls are made using another communication provider’s services .

Number range

The caller . . .

The organisation . . .

Level of ICSTIS regulation

0800 and 0808 Pays nothing Pays for the cost of calls it receives None 0845 Pays up to 4p per minute Pays the balance of the actual costs None 0870 Pays up to 8p per minute Receives a share of the revenues None 0844 Pays up to 5p per minute or Pays the balance of the actual costs or, in

the case of higher caller-pays rates, may share in the revenues

None

087 Pays up to 0p per minute or 0p per call

Receives a share of the revenues None 09xx Pays up to £ .50 per minute Receives the majority of the revenues High

NOTE: The prices shown include VAT. Certain exceptions apply. The cost to callers is lower in the evening and at weekends .

Callers may also benefit from discounts when making calls to 0845 and 0870 numbers. For full details of BT’s current call charges, go to www .bt .com/Pricing .

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Whilst most customers appear to have no problems with 0870 numbers, an increasing number have made it known that they are unhappy with the way 0870 call pricing has developed . When 0870 was first introduced, the cost of calling an 0870 number was tied to the cost of calling distant ‘geographic’ numbers in the UK – then termed the national rate. Those calling from near the shop, office or call centre concerned were charged more than they would have been on a ‘by distance’ basis; those furthest away would have been charged exactly the same .

For 0845 numbers, the situation was different . When they were first introduced, the cost of these calls matched that of calling a number on their own exchange or one nearby, then termed the local rate. Those calling from near the shop, office or call centre saw no difference in what they paid, while those calling from further away saved money .

To start with, neither situation was the cause of much concern among customers . So what has changed?

Like other providers, BT now offers customers the choice of paying per call or of paying a monthly fee that includes the cost of certain calls, either all day or just in the evenings and at weekends . Many operators, including BT, now offer consumers the option of call packages which provide a discounted service based on a monthly fee. Because of the specific outpayment revenue structure of 0845 and 0870 numbers, they are not generally included within the range of calls within BT Retail call packages . This can cause confusion for consumers who do not understand fully the revenue flow for these calls. The reason that 0870 and other 08 numbers are not treated like geographic numbers in call plans and discount packages is because the cost to call them has deviated over time . The outpayments mean that providers must charge more for them to be called . In principle also, people do not think that a company should receive money simply to call them . They are also suspicious that companies artificially prolong calls to benefit from the payment to them .

A similar situation applies for users of mobile phones . Their inclusive call allowance generally includes calls to other mobiles, numbers that start 0 and 02, but generally not to 08xx and 09xx numbers . Even calls to 0800 and 0808 ‘Freephone’ numbers incur a charge when made from mobiles .

Attitude to paying

Customers are more sophisticated – and more demanding – than they were .

Their expectations are increasingly set by their experience online and, as a result, many now think it is unacceptable for organisations to charge through the phone bill for transactions that can be completed free online . Prime examples are calls to get quotations, make purchases or report problems with deliveries .

As the Financial Times noted recently [3]: “The madness of {0870} is that, while it’s reasonable to pay extra for something useful in return, what on earth are we up to paying an insurance company 0p a minute to get a quote so we can do business with it? It’s like Sainsbury’s charging an entrance fee .”

The issue here is not that everything should be free – just that customers feel they shouldn’t be charged by businesses, government bodies and others through their phone bills for things that would be free if accessed some other way . And when they are going to be charged, they prefer to know beforehand how much they will be charged, and what added value they are getting from the company they are paying through the outpayment . In short, they are looking for greater transparency in the relationships they have with the organisations they deal with .

Consumers also stated, in response to the Ofcom Review, that they perceived that companies who use 0845 and in particular 0870 numbers may deliberately extend the duration of the call to manipulate higher call charges . Analysis by Ofcom showed that there was no significant evidence to support this view. However, the high level of responses which upheld this view demonstrated to Ofcom that this perception further enhanced customer disquiet with revenue share on these number ranges .

Who we pay

Finally, it’s clear that many find it particularly unacceptable for certain government departments and agencies to seek to profit from calls from the public, especially when they cannot choose not to call that organisation, or to call an alternative instead .

In 2005, for example, the Daily Telegraph launched an ‘investigation’ into the use of 0870 numbers by government departments

and agencies stating “there has been a proliferation in income-generating numbers, prompting accusations that they are being used as a stealth tax” [4] .

The Government itself has some sympathy with the Daily Telegraph’s view. Its Central Office of Information has said that the cost of 0870 calls “can act as a barrier to communicating information that the citizen should have access to as a right” . The Department of Health banned GP surgeries from using income-generating numbers in 2005.

Why is 0870 changing?

Note: Whether they do business online or by phone, customers will have to pay to be connected to the organisation that is delivering the service . When calls are made through 0870 numbers, an additional charge is levied by the organisation concerned .

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Ofcom began its review of 0845 and 0870 numbers in 2004, largely because the regulatory regime surrounding calls to these numbers was no longer working as originally conceived . It was during the course of this review that public concern about calls to 0870 gained momentum .

Based on feedback to two consultation documents, Ofcom published its conclusions on April 9, 2006, in a report entitled “Number Translation Services (NTS) – a Way Forward” [5] . These conclusions impact not only 0870 numbers but also some of the other non-geographic number ranges . At this stage, however, Ofcom has decided not to change the rules that govern the use of 0845 numbers . It plans to hold a further consultation on these within the next two years .

What’s changing about 0870?

In essence, Ofcom says that, from January 2008, unless the caller is advised by a free announcement at the start of the call, the cost of calling an 0870 number must be the same or less than that of an equivalent national call to a number starting 0 or 02 .

For many callers, this will significantly reduce the cost of calls to 0870 numbers. Typical fixed-line call packages offer calls to 01 and 02 numbers at 3p per minute or less or include them within a monthly call allowance . Ofcom’s ruling will mean that 0870 calls will generally be included in call allowances .

The result is that organisations that continue to use 0870 numbers will not only lose the associated revenues, they are likely to have to pay towards the additional costs BT and other operators incur when routing calls to non-geographic numbers.

Ofcom has given organisations and communication providers 8 months from July 2006 to implement the change . For practical purposes, this means changes must be complete by January 2008 .

What’s the alternative?

Ofcom’s statement was followed by the announcement of revisions to the numbering plan for the UK that will start to come into effect from late 2006 [6] . Designed to make it easier for people to understand the cost of making calls, this introduces a new range of numbers starting 03 and starts to establish a simplified relationship between numbers starting 08 and 09 and the cost of calls . In the case of geographic numbers starting 01 and 02, the first few digits connote a local area, which signifies the price of calls. The new 03 numbers have no location significance. Calls to them will cost no more than an equivalent national call to a geographic number . They will also attract the same discounts as calls to geographic numbers and be included in ‘calls-inclusive’ packages, just as those to 0870 numbers will be in future . Ofcom has prohibited communication providers and called organisations sharing the revenues .

So what will be the difference between 03

and 0870 after January 2008?

Whilst there are other small differences at a level of detail, for users of 08 or 03, primarily, it’s a matter of image . Even though the costs of calls to 0870 numbers will reduce, any adverse customer perceptions may take time to change . By introducing 03 numbers, Ofcom is allowing organisations that want to offer a single national point of contact without making additional charges for calls a way of doing so that isn’t tainted by past associations with higher cost . It is particularly expecting that public services and not-for-profit organisations may switch from 0870 to the new numbers to emphasise that callers aren’t being charged a premium . However, organisations should bear in mind that BT and perhaps other providers have yet to decide whether to offer services to their customers on 03 numbers .

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What else is changing?

With regard to numbers starting 08, Ofcom is introducing changes to make the cost of calls clearer .

In future, Ofcom’s aim is that the first three digits of the number will give a clear guide to the maximum per-minute price of the call. The table below sets out the arrangements Ofcom is introducing from the end of 2007 . These apply to all UK operators, not just BT . Operators will be free to determine their prices within the limits Ofcom is imposing, so many calls will be cheaper than shown, or provide a free-to-caller tariff announcement if the call is to cost more . Ofcom has indicated that it will consult on introducing a similar structure within 09 .

In addition, Ofcom has ruled that communication providers must clearly publish the cost to their customers of calling 084 and 087 numbers . Organisations using 087 numbers may also have to conform to advertising regulations imposed by ICSTIS in much the way that they have to advertise the cost of calling 09xx numbers today .

Finally, Ofcom is extending the remit of ICSTIS – the premium rate services regulator – to include 087 numbers . Details of the new regulations have yet to be published but Ofcom and ICSTIS have said the scheme will be lighter in touch than that which applies to 09xx numbers . ICSTIS has already published a pre-consultation document to gather input from interested parties and plans to implement the new arrangements from January 2008 to coincide with the changes to 0870 .

Number range

The caller . . .

The organisation . . .

Level of ICSTIS regulation

080 Pays nothing Pays for the calls it receives None 084 Pays no more than 5p per

minute* May be charged for calls received or receive a share of the revenues depending on the number of calls and the amount the caller pays

None

0870 Pays no more than for an equivalent national call to a geographic number

Pays the balance of the actual costs None

087 (other

than 0870) Pays no more than 0p per minute* Receives a share of the revenue Moderate 090 to 098 A maximum amount that varies

depending on the third digit of the code

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9 Beyond Ofcom

As Ofcom observes, the UK’s 0870 range of numbers is one of the most widely used of its type in the world .

BT, for example, has around 75,000 customers for its 0870 service, including government agencies, charities and businesses ranging from the largest banks and retailers to SMEs and one-person businesses such as solicitors and financial advisers. By January 2008, each will have to decide how best to take calls from its customers in the future .

For some, this will be a simple matter of deciding whether the revenue from calls is more important to them than their phone number . If it is, they will need to move to a new number; if it isn’t, they can continue to use the 0870 number they already have . Others will see Ofcom’s ruling on 0870 as a symptom of wider changes . Customers now expect to be able to make contact in all sorts of ways – face to face, online, and by phone, email or text message – and that they will not be discriminated against based on their choice . They also have very high expectations when it comes to standards of service .

Organisations that take this view may use the changes to 0870 as an opportunity for a wider review of their customer contact strategy . They’ll be looking for ways to combine the options available to them to create multi-channel and, very likely, multimedia contract strategies to help them build productive relationships with the people they serve in the years ahead .

Whichever response is appropriate, the important thing is to avoid delay . As is evident from the number of vans that still feature phone numbers from before the Big Number change of April 2000, it takes a long time to change everything that might be affected .

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The options in detail

Retain 0870

If you choose to keep your 0870 number, you will lose the majority, if not all, of any revenues you have been used to . It is also likely you will have to pay more for the service – for example, if the number of calls to your number is below a certain threshold .

So why might you choose to stay with 0870?

Firstly, it may be that your customers are familiar with the number . You may have featured it prominently in your advertising over several years, for example . It would take a long time to establish a similar level of awareness for a new number and, even if you choose one that permits revenue sharing at the same level as you’ve been used to, customers may see this as a negative step as a result of broader publicity about the changes to 0870 pricing .

Secondly, the costs of changing to a new number might exceed the revenues you could expect to make in the future . Remember, call prices continue to fall, so customers may expect the cost of calling you to reduce as time goes by . Changes to advertising, stationery, premises and vehicles are expensive, especially if they need to be completed quickly .

Thirdly you may not receive revenue from calls to your number, or it may not be a significant factor for you. In which case, there may be little reason to change .

It will therefore make sense to some organisations to stay with 0870 . A word of caution, however . Thanks to campaigns like ‘Say No To 0870’ and the negative coverage there’s been in the media, some customers now have a poor view of 0870 .

Even with the positive impact of Ofcom’s ruling, the public’s perception of the numbers may take time to change . Organisations that considering staying with 0870 should bear that in mind .

Move to an 03 number

At the time of writing, it isn’t clear which providers, if any, will offer – services in the UK on 03 numbers, or on what terms .

If they do become available, it’s likely it will be on similar terms to 0870 numbers. The principal benefit of choosing to move to an 03 number will therefore be that it will free the organisation concerned of any ‘high cost’ stigma that may have become associated with 0870 numbers .

Organisations may also have the option of moving, say, to an 0370 number that matches the 0870 number they have today . However, even where this is an option, it is not clear how quickly the ability to receive calls on new 03 numbers will become widely available, especially from overseas .

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Retain revenue share

If your strategy is to help fund what you are doing from your revenue share, then you will need to choose a new number .

The choice you make depends on the extent to which you rely on revenue share, the impression you want to convey to your customers, your traffic profile and the length of time you speak to your customers .

Most will want to avoid numbers in the 09xx range, which tends to be associated with higher-cost and adult services. Many individuals and organisations also bar outgoing calls to 09 numbers . So what’s the alternative?

At this stage, if you want to retain revenues at the level you’ve been used to from 0870, you’ll need to move to an 087 number . Callers will pay up to 0p per minute [6] – a cost that communication providers must publish clearly .

You also need to bear in mind that 087 numbers are likely to be subject to ICSTIS regulation . At the time of writing, this is expected to be ‘light touch’, but the details will only become clear once ICSTIS’s consultation exercise has been completed . Even apparently innocuous regulations could have a big impact on operational costs . In the case of 09xx numbers, for example, ICSTIS regulates factors such as call waiting time . If similar regulation were to be applied to 087 numbers, the impact on call centre organisation, call routing systems and the other technical components that organisations use could prove significant.

Another option for those wishing to retain a revenue stream is to move to an 0844 number . Callers will pay no more than 5p per minute for calls to these numbers [6], so the opportunity to share revenues will only be available to organisations that attract large numbers of calls charged at the top of the range . Revenues may therefore be lower than organisations have been used to but set against this is the fact that use of these numbers won’t be regulated by ICSTIS . This eliminates the possibility of increased operational costs of the kind that may result from increased regulation of 087 numbers . 0845 is a further option that currently offers a limited ability to share revenue . However, Ofcom has announced that it will conduct a similar review of 0845 to that completed on 0870 . Organisations needing to change number to retain a revenue share may therefore think twice before choosing 0845, in case they are confronted by a further need to change number following another Ofcom review .

Review your customer contact strategy

The third option is a thorough review of your customer contact strategy – one that takes account of the broader changes that led, in part, to the Ofcom review and the situation that you’ll face in the years ahead. (See: Customer contact – the bigger picture.) Experience suggests that, if you step back and consider the bigger picture, you can identify options that are more advantageous than those that are immediately apparent . What’s more, it may not be best to make the same decision for all of your services, right across the board .

Consider a banking business, for example . Banks are among the biggest users of 0870 numbers today, using them right across their portfolios of products and services . So should they decide their response to Ofcom’s new ruling on a company-wide basis? It’s an option, but it might not be the best one to take . It might be better, for example, to differentiate between services . Freephone numbers might be the best option when it comes to taking enquiries that could lead to new business, while a revenue-share arrangement might be best where the bank is supplying something the customer clearly values on the call - financial assistance or advice, for example. Even if you restrict your review to how you handle business over the phone, it probably makes good sense to consider what’s best for each particular service, as it may be some time since you last conducted a review, and new options may have become available in the mean time .

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How BT can help

BT can help you decide which option is best for your organisation and has a range of products and services to help you make the transition quickly and effectively .

If you choose to move to a new number to retain the revenues you receive from calls, we can guide you through the options available and give you an indication of the revenues that would result . And once you’ve decided on your new number, we can help you tell your customers about the change .

Alternatively, if you decide the time is right for a ‘root and branch’ review of your contact strategy, our expert consultants can work with you to explore your current situation and identify what will work best in the years ahead .

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3 What to do next

Immediately

If you use our 0870 service, contact us now . We’ll provide guidance and assistance to help you explain the changes to your colleagues .

By the end of 2006

Choose which option you want to take, then work it through in detail . There are all sorts of angles to consider, and all sorts of people to consult as a result .

If you decide to move to a new number, you’ll need to change your advertising, stationery and so on as quickly as possible . It’s probably best to introduce the new number as soon as possible and run it in parallel with the number(s) it replaces .

Remember that as well as Ofcom’s ruling on 0870 numbers new ICSTIS regulations for 0871, although not finalised, are likely to require you to make the cost of calling 087 numbers clearer to customers – for example, in your advertising, on your website and in your stationery .

During 2007

If you’re moving away from 0870, you’ll want customers to be calling your new number before January 2008 . We suggest you check regularly to see how well the switch is going and take corrective action as soon as you spot the change isn’t going as fast as it should . You may need to adjust your advertising, for example, to make sure customers know the new number to call .

BT offers two services that can help organisations keep an eye on calling patterns – BT Inbound Architect and BT Inbound Analyst . BT Inbound Architect generates a wide range of online reports about the calls being received . These show organisations how calls to them are distributed by day of week, time of day and answering location . Missed calls are logged and an interactive graphical interface is provided to help users understand what causes them .

The BT Inbound Analyst software extends this functionality, giving organisations the ability to analyse the raw data about their calls and generate reports that meet their specific needs.

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References

[] Lynne Hamill, ‘The Introduction of New Technology into the Household’ www .dwrc .surrey .ac .uk/Portals/0/NewTechnology .pdf

[2] BT Price List, as at September 5, 2006 . For details of current charges www .bt .com/Pricing

[3] David Baker, ‘The high cost of hanging on the telephone’, Financial Times, October 8, 2005 www.ft.com/cms/s/3109ea42-3799-11da-af40-00000e2511c8.html

[4] David Derbyshire, ‘0870 helplines number makes millions for state agencies’, Daily Telegraph, July 6, 2005 www .telegraph .co .uk/news/main .jhtml?xml=/news/2005/07/6/nhelp6 .xml

[5] Ofcom, ‘NTS: A Way Forward’

www .ofcom .org .uk/consult/condocs/nts_forward/statement/ [6] Ofcom, ‘Telephone Numbering - Safeguarding the future of numbers’

www .ofcom .org .uk/consult/condocs/numberingreview/statement/

[7] Ofcom, ‘Providing citizens and consumers with improved information about Number Translation Services and Premium Rate Services’ www .ofcom .org .uk/consult/condocs/nts_info/statement/statement

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5 Customer contact

Fundamental economic changes that started in the 980s and are still picking up steam have put customers in charge of the buyer-seller relationship . As a recent white paper by BT and Henley Centre HeadlightVision [1] put it: “In many ways, the launch of the Freefone 0800 code during the 980s heralded a customer service revolution . It signalled a change in the relationship between companies and consumers – now the customer was king .”

Writing in CRMguru.com, Dick Lee said it like this [2]: “Either we do business their way or they go their own way . Anybody can copy your sales or your service and if they also provide more customer-informed and customer-sensitive sales and service – along with such add-ons as shorter order turn times, direct lines of communication and more accurate invoicing – you’re toast .”

So what’s behind this shift in attitude? Well, firstly, consumers’ real disposable incomes have increased by more than 50 per cent since 990 . They also have many more opportunities to purchase from and interact with businesses and other organisations .

Then there’s technology . Consumers now have access to – and expect to be able to use – an unprecedented range of modes of communication . Today, 62 per cent of the UK population are internet users – a major increase compared to just 26 per cent in 2000 [3] . A comparable proportion are regular senders of text messages . The problem, of course, is that few organisations are as adept as their customers when it comes to using these new ways of communicating . When people communicate with each other, they know the recipient will piece together the overall conversation even if it has ranged over a variety of channels . Plans for a day out with a friend, for example, might begin with a conversation in a pub . Emails and text messages might then be exchanged before details get finalised by phone.

A conversation with a business or government department can be a very different affair . Recent BT research indicated that, today, only five per cent of companies have an effective multi-channel contact strategy and even fewer have deployed a successful strategy that delivers return on investment (ROI) .

The reality in most cases, then, is that the different parts of a conversation with a customer are isolated from one another . The person in the call centre, for instance, knows nothing about an earlier email .

Customers clearly expect more than this . Many customers are time and energy ‘poor’ . The number of people in the UK saying, “I have never enough time to get things done” now stands at 57 per cent . People want to get things done quickly and to be able to use whichever means of communication is most convenient to them at the time – not to be limited because the organisations they deal with can’t offer a joined-up ‘multi-channel’ experience.

Voting with their feet

In other words, in a world of growing consumer power and over-production – in many markets, too many goods are chasing too few customers – price and product are no longer the prime differentiators . Instead, energy and time often are . Customers will go elsewhere if companies don’t make it as easy as possible to do business .

Research undertaken for BT by Henley Centre HeadlightVision has shown that, if the phone just rings and rings indefinitely when a customer calls a travel agent to ask about availability for a holiday, 23 per cent will call a different organisation rather than try again . That isn’t a problem if the situation rarely occurs . However, BT Inbound Analyst, a tool that gives organisations feedback on how they handle calls from customers, showed that one travel company failed to answer more than 8,000 calls a week, about half of which would have been about booking a package holiday. The Office of National Statistics estimates the average household spends £675 on package holidays each year [5] . Assuming this is spent on a single trip, that 25 per cent of calls to a travel agent result in a sale and that 20 per cent of those who can’t get through go elsewhere, this equates to a loss of nearly £7 .5 million per year .

And where the lifetime value of customers is higher, even more may be at stake . The Henley Centre estimates that as much as £4 .6 million in customer value may be being lost each year by banks whose customers fail to get through when they want to enquire about a new account, credit card or loan .

The bigger pict

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Keeping customers sweet

So faced with these rising consumer expectations, how should businesses react?

Experts at BT argue that there are three steps to success when it comes to customer contact . Firstly, you must have data that is accurate. Most likely, this will be generated and kept up-to-date as you do business with your customers . However, it may be held on a product-by-product or service-by-service basis. This might be the case if your organisation is a merger of previously separate businesses, for example .

The second step, therefore, is to integrate the data available in your separate databases to give a single consolidated view of the business you conduct with each customer . Multi–national corporations, in particular, often have huge investments in legacy systems that have developed piecemeal over the years . As a result, such organisations can have up to 4,000 different data bases . These have to be integrated to make multi-channel customer relationship management (CRM) a realistic possibility .

Finally, you may need to change your culture . Organisations that are truly customer-centric focus everything they do on meeting their customers’ needs . They measure customer satisfaction routinely and reward everyone accordingly, starting at board level .

Can it be done? BT’s own experience shows it can . In recent years, the company has gone from being one of the most poorly rated companies when it comes to customer service to being one of the most successful .

An investment of more than £00 million has equipped the company with some of the most sophisticated contact centres in Europe . It receives 2 .3 million calls a day, including .5 million directory enquiry calls and 560,000 sales and service enquiries . The calls are handled by 20 IVR services and a workforce of 6,000 agents based in 32 call centres spread across the UK . An additional .2 million enquiries a month are made online through the company’s web site, bt .com .

The benefits of this investment have been significant. Client ‘face time’ has increased by 200 per cent, operating costs have been reduced by 7 per cent and levels of service have increased by 40 per cent .

Importantly, BT isn’t resting on its laurels . The company is currently looking at what it needs in order to meet the demands of its customers as it moves from being a telco to the digital networked economy . To do this, it has set up a team of researchers that includes psychologists, process engineers and anthropologists . They are building a detailed picture of what customers really will want from contact centres in the future and how businesses should respond . The evidence suggests that Ofcom’s ruling on 0870 is a good opportunity for companies to step back, look at the customer experience they are offering and ask if things can be done better . Surveys suggest that most businesses could improve some aspect of their service – one conducted by CRMGuru .com in April 2006, for example, found that only 22 per cent of customer respondents thought the organisations they dealt with “currently provided an excellent customer experience” .

According to BT researchers, the problem is not that companies don’t know to improve customer experience, it is that they perceive it as costly and that investments won’t deliver the ROI they need within a sufficiently short time. For example, a typical senior manager might be looking for investments to break even within two years, even though it can take much longer to achieve a significant change in customer attitudes . For that reason, they opt for the alternative – short-term cost cutting.

The team concludes that it will take a fundamental shift in

management focus to change this [6] . Managers today tend to focus on the parts of an end-to-end process at the expense of what the customer experiences – the whole . Only by assessing everything in terms of its effect on the customer will they really be able to understand how to improve service and generate shareholder value based on improved customer satisfaction .

The bigger pict

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7 Future customer contact

Looking ahead, BT argues that, managed properly, contact centres have the potential to move from simple enquiry-handling and fault-reception centres to places where people can genuinely get their questions answered and their problems solved . They offer the possibility of delivering what is now being called customer experience management (CEM) which looks at all customer interactions, not just automation . CEM also deals with the customer’s perception of value which is both functional – that is, did it do what it was supposed to? – and emotional – that is, did I like the way I was treated?

This shift will start with increasing amounts of self-service. Research from the Henley Centre shows that 47 per cent of customers say they prefer doing simple things online . And according to the team at BT, user-friendly technologies should increasingly allow for simple, mundane and repetitive calls coming into contact centres to be automated . But not every interaction can – or should – be automated . Some will continue to need the human touch .

In an ideal world, the role of the human customer service advisor will be transformed into that of a relationship builder – someone who has time to actively help the customer . For this to work, however, companies will have to equip their advisors to provide the sorts of personalised and detailed advice callers will be looking for . They will need to be experts at building relationships as well as in the portfolio of products and services the organisation offers .

Performance will also need to be measured in a different way . In the past, call centres have often been managed on largely internal measures such as call duration . Advisors have been told that their job is all about delivering great customer service but their processes, systems and culture have often prevented them from really delivering . That will have to change .

The team argues that too many businesses have concentrated solely on technology when it comes to customer relationship management . But CRM is a three-legged stool. Technology is important, but so too are the processes that are enabled or changed by that technology and the people who are working with those processes .

In addition, the organisation and presentation of the data used is vital – BT’s researchers expect that this is where most of the new technology employed in coming years will focus .

To help its own agents deal correctly with complex enquiries, for example, BT has developed a prototype automated assistant called Gabrielle . Based on state of the art speech recognition technology, Gabrielle listens in to the dialogue between the customer and agent, keeping an ear open for words and phrases that suggest a topic that needs to be handled carefully for regulatory reasons is being discussed . When such a topic is detected, a reminder of the steps to be followed is displayed on the agent’s computer screen . A trial installation at BT’s Canterbury call centre in the UK reduced the number of occasions in which poor advice was given by 25 per cent and was said to have resulted in the largest improvement in BT’s compliance with regulations since the introduction of CRM . In essence, BT’s researchers conclude that the level of sophistication in contact centres will go up to match the work that is required of them . Different kinds of people will be recruited and while they may be co-located, the team also predicts that companies will also use networks of experts to answer customer queries, who may work anywhere and may well do other things besides taking calls . The call centre role will become much more professional, more highly qualified and, hopefully, much more valued. After all, it can be a tough – though increasingly essential – job .

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References

[] BT, ‘Overcoming the demand delta . The gap between customer expectations and business reality’ www2 .bt .com/static/i/media/pdf/demand_delta_wp .pdf

[2] Dick Lee, ‘Why climb the CRM mountain?’ crmguru .com

[3] Nielson Net Rating, internetworldstats .com (data as at March 3, 2006) [4] Ian Seedhouse, ‘Beyond the hype – the real secrets of multichannel marketing’

ContactCentreWorld .com

[5] Office of National Statistics, ‘2004/5 Family Spending Survey’ www .statistics .gov .uk/statbase/product .asp?vlnk=36

[6] Nicola Millard, ‘Putting customers in their place: creating real value from CRM’. Copy available from BT

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