Service providers are often accused of lacking innovation. A quick reality check shows that’s not really the case.
Twenty years ago the biggest selling mobile phones came from the likes of Nokia, Siemens and Motorola. Samsung didn’t even edge into that list until 2002. Apple doesn’t come on the scene until five years later in 2007. Last year’s handset market was dominated by companies that didn’t make phones 20 years ago (Samsung, Apple, Huawei, Oppo and Vivo).
Now consider networks. We were on 2G back in the day, which didn’t really matter because all we were doing was texting and calling on our feature phones (which were just called phones back then). If for some reason we wanted to check out one of the relatively few websites (there were 2.5 million globally) it was quite difficult, what with dial-up access making everything crawl and no Google (which was founded in 1998) to find things with.
In fact, service providers are pretty good at innovating on a technical level, where they falter is on other types of innovation – such as product, experience, operational and commercial innovation. But that’s also set to change. According to Omnisperience research most service providers are now more worried about new entrants and non-traditional competitors than they are about traditional rivals. These non-traditional rivals are far more adept at designing better experiences for their customers, as well as at delivering product and commercial innovation. Service providers need to react, and soon.
The good news is service providers have got the message loud and clear.
- 9 out of 10 (88%) say they intend to innovate and improve experience
- 9 out of 10 (90%) say they intend to develop new products.
This is looking a lot more like the continuous innovation pipeline that we’ve been asking them for. But as service providers begin to innovate more dynamically at the business, product and experience levels, there are risks. One of these is that customer confusion rises. Confusion is not good for efficient operation or commercial outcomes. Its effects are often felt in the contact centre.
Our research reveals that for the average service provider one-third of contact centre traffic is already billing related, ranging from less than 25% of traffic for the best performing third to more than 50% for the worst performing third. Even worse are the customers that don’t call to enquire or complain, but just churn.
As service providers seek to build value over and above connectivity, and as the product and commercial offering becomes more dynamic, bills will become less predictable again and the risk of confusion or mistakes rises.
The hidden cost – the sting in the tail – of innovation is that if it isn’t explained well from a commercial point of view, it will increase traffic to contact centres from confused customers. Poorly explained commercial terms also have another affect. Bill dread – that is fear of the cost of a service – slows down the uptake of new products. Unless service providers ensure they explain tariffs and offers clearly, both in their marketing and on their bills, then they will limit or slow adoption of their innovation efforts, increase customer frustration and drive up contact centre costs. To succeed, they need to focus on transforming the boring, static and confusing touchpoint that is the bill, into more dynamic and personalised billing communications that engage, inform and retain their customers.
There is a huge opportunity to do this, as few service providers are currently proud of their bills. Only 25% believe the bill is evolving in line with their business, and only 23% believe it’s currently a strategic asset to their company. In contrast, 95% say that improving the bills they provide would have a positive impact on their contact centre traffic. At stake is billions of dollars currently wasted on supporting unnecessary calls to contact centres, and even more in the form of opportunity costs deriving from innovation that is either not reaching its potential or taking off more slowly than it should because customers either do not understand the charges or are wary of them.