T-Mobile has done it again: for the 15th time it had an "Un-carrier" event. This time it was all about improved customer service. This one was more on the ripple side than on the splash side.
While poor customer service is a certain annoyance, it is only a tertiary purchase decision factor after price and quality. Good customer service reduces churn, but it typically does not attract new customers to a provider—nobody joins a wireless carrier or cable company because they have good customer service. Most of the time, customer service is the last line of defense when the company screwed up.
Americans call their wireless carrier roughly two and a half times per year, but it is highly skewed to a relatively small number of customers. Very rarely—and hopefully never—do customers speak with customer service on an ongoing basis.
As a customer, you do not want to know your customer service representative by name. If that happens, something has been going horribly wrong for quite some time. By far, the number one reason for calling customer service is a billing issue. Billing issues usually happen when there is a mistake at the initial order setup, a mishap when the customer changes the billing plan they are on or if an extraordinary event occurred.
Customers usually join a carrier only once and if an error happened, it should get fixed in one call. Same for a billing plan change or when customers have a new phone or suddenly call overseas or travel. One call resolution to infrequent events is preferable to having a dedicated customer service team.
The other problem that all customer service teams have significant employee turnover. Call center turnover rates are between 30% and 45% compared to 15% for the overall U.S. economy. This means that the average call center employee leaves after two to three years.
The danger that T-Mobile is running at is that just as a customer is getting used to his or her agent, they leave. If the team is too large to mitigate against employees leaving, there is no meaningful difference between the dedicated customer service team and the call center at large.
If the customer knows the names of all members on his team, the employee turnover becomes even more visible. What will be interesting is how T-Mobile will handle its significant outsourced customer service contingent. Rightly or wrongly, many Americans prefer their customer service to be conducted by call centers located in the United States. If the customer doesn’t know the real names of all members on his team, the whole exercise is meaningless. We’ve all been on customer service calls with customer service agents who had very American names but were obviously located outside the U.S.
The whole customer service team initiative suddenly starts to make more sense if you take into account that T-Mobile wants to get into the TV distribution business. T-Mobile in that case will go directly up against cable TV, an industry that is, according to the ACSI, plagued with low customer satisfaction ratings.
In 2017, Comcast, the largest cable TV provider in the U.S., had the second-lowest score with 58% compared to T-Mobile with 73%. In 2017, T-Mobile was tied with Sprint for the 2nd highest customer satisfaction score. T-Mobile’s angle of changing the cable industry would be through better customer service. T-Mobile would have an advantage over most cable companies, but suffers from the same problem: that customer service is not often used and problems are ideally resolved in one call.
Roger Entner is the founder and analyst at Recon Analytics. He received an Honorary Doctor of Science from Heriot-Watt University. Recon Analytics specializes in fact-based research and the analysis of disparate data sources to provide unprecedented insights into the world of telecommunications. Follow Roger on Twitter @rogerentner.
"Industry Voices" are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless. They do not represent the opinions of our editorial staff.