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Talktalk Transformation

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Talktalk Transformation CASE STUDY: TALKTALK TalkTalk transformation In July 2012 the UK telco giant, TalkTalk, agreed a deal that would see HGS take over its contact centre operation in Preston, Lancashire, and continue the work to make it a centre of excellence for customer retention. Today the centre is setting the gold standard by achieving retention rates of up to 92%. The deal is an example of a growing trend in contact centre outsourcing in which the contact centre’s physical and human infrastructure are transferred from the client to the outsourcer, acknowledging that the outsourcer will have the skills, processes and commitment to transform its performance. For TalkTalk that transformational promise is being delivered. Not only have its retention rates soared, but its costs have dramatically reduced. The transfer to HGS brought an immediate per-seat cost saving and the two companies are now working together to achieve additional cost reductions and service improvements by streamlining processes and improving agent skills. “Asset re-allocation deals of this kind deliver a double benefit for the client,” explains HGS’ CEO for UK and Europe, Charles Cooper-Driver. “In the first instance they translate the burden of fixed asset cost into flexible operational expenditure. In the second they promise an ongoing transformation of the contact centre’s performance. For TalkTalk we are driving revenue through retention and cross sell activity, while seeking out the efficiencies that will bring costs down over time.” Keeping the customer When HGS took over TalkTalk’s operation in Preston’s historic Tulketh Mill, it transferred a number of TalkTalk employees and then undertook a rapid recruitment programme to build the team to over 300 by June 2013. That enlarged team now handles calls from customers who are thinking of cancelling their contracts but, in a very large number of cases, are convinced to stay. “Calls are typically of two types,” explains Les Blacker, Site Director for the Preston operation. “The first are from customers who have taken out a contract with TalkTalk but are thinking about cancelling before the service goes live. The second are ‘in life’ customers, who have been using TalkTalk, perhaps for some time, but have decided they might want to leave.” HGS’ retention performance for each of these two customer types differs. Over 90% of ‘in life’ customers are retained along with a high percentage of ‘new’ customers. Importantly, however, HGS doesn’t consider a retention attempt truly successful until the customer has remained with TalkTalk for 38 days after the initial decision to re-engage. “We need to be confident that the customer’s decision to stay is a determined one,” says Les. Nearly 90% of ‘in life’ customers and a high proportion of ‘new’ customers are still onboard 38 days after speaking with HGS. These performances are significantly ahead of target and of save rates before the HGS takeover. 1 www.teamhgs.com CASE STUDY: TALKTALK The cost of retention, in terms of the discounts and benefits offered to secure the customer’s business, has also reduced significantly under HGS’ tenure. “Not only are we holding on to more customers, we are doing so at a better cost,” says Andrew Crozier, Retention Manager for TalkTalk. “That means the strength of our offering is being compellingly described by HGS agents who have excellent product knowledge based on strong training.” Maximising the revenue Not satisfied with simply keeping customers, HGS is working hard to increase their involvement with TalkTalk and the revenue they generate. TalkTalk, already one of the UK’s largest broadband and fixed line phone providers, now has the UK’s fastest growing new TV service, YouView. By the end of March 2013 around 230,000 customers had taken YouView from TalkTalk and new customers are now being added at the rate of around 12,000 per week. “Customers taking TV, phone and broadband generate more revenue and are happier with TalkTalk, so they are more likely to recommend services and less likely to churn,” says Andrew. TalkTalk’s commitment: To be the UK’s best value for money provider By offering additional, bundled services to the customers it works to retain, HGS is securing both of broadband, landline, TV and loyalty and security of tenure for TalkTalk. mobile services. “HGS has achieved very strong results and the fact that they have been achieved during a year when they have been dramatically ramping up the operation is exceptional and a promise of great things for the future,” says Andrew Crozier. During this vital first year of operation, HGS has also supported the migration of customers from Tiscali TV (acquired by TalkTalk in 2009) to TalkTalk’s new Plus TV service, which includes YouView and phone services. Thousands decided to shift to TalkTalk Plus TV ensuring TalkTalk’s share of their communication and entertainment expenditure. Keeping the customer satisfied The positive customer experience that is giving rise to increasing retention and revenue-per- customer is also evidenced by rising customer satisfaction scores. Customer satisfaction is measured via email and IVR surveys, which callers are invited to complete after every contact with the centre. It asks, very precisely, for feedback about that particular interaction and the agent’s success in dealing with their issue. Feedback for agents at Preston is high and ahead of target. At the same time, first time resolution is rising. Believing that the speedy and accurate resolution of customer issues is a key contributor to loyalty, TalkTalk measures first time resolution very rigorously by looking at actual call reoccurrence. It does this by capturing the Caller Line Identifier (CLI) for every incoming call and then monitoring for its recurrence over the next forty days. If a second call is received from that CLI within a seven day period, it is assumed that the customer’s initial issue was not resolved successfully. HGS has maintained consistently good CR7 (call repeat within 7 days) results and its quality scores are ahead of target at 94%. Better all the time The premise behind asset re-allocation deals in contact centre outsourcing is that the provider has the knowledge and expertise to deliver transformational change. HGS is fuelling positive change at TalkTalk, not just in the contact centre, but beyond it. HGS is using agent observation and analytics to identity the root causes of customer dissatisfaction and feed them back to TalkTalk. “People call us to cancel their TalkTalk contract either because they do not feel the company has met their expectations or because they are tempted to take up an offer from a rival company in a very competitive market,” says Les Blacker. “Every day we are talking directly to TalkTalk customers and the insights we gain can help improve products and services as well as customer management in the contact centre.” 2 www.teamhgs.com CASE STUDY: TALKTALK Andrew Crozier, who spends at least half of his time in the HGS centre, is the conduit through which that information and insight flows back into the TalkTalk organisation. In particular he values “Through the contact centre we’re HGS’ input to the development of retention strategies and approaches. “Nobody spends more hearing what some customers time talking to our customers than our contact centre agents. They understand what customers want and what’s on offer from the competition. Developing and testing retention strategies in the find frustrating or compelling and field makes us responsive to every shift in our fast moving industry.” we can take action to position ourselves more powerfully in the HGS is also determined to develop an agent body of experienced and committed advisors. HGS works with a third party education and training provider to enroll every new recruit onto an apprenticeship marketplace.” programme in contact centre operations. This leads to a nationally recognised qualification and Andrew Crozier, Retention Manager, TalkTalkk opportunities for even more advanced training. “We want our agents to feel they have opted for a career with us rather than just taken a job,” says Les Blacker. “Helping them to build skills that will be valuable to them in the marketplace builds employee engagement and boosts retention. Agents that successfully negotiate their apprenticeship and have a degree qualification, can also choose to undertake Six Sigma Lean training, a widely recognised operational improvement training that is recognised across both service and manufacturing sectors. Employee satisfaction scores are monitored regularly and are extremely high, while 80% of employees say they would recommend the centre to family and friends as a great place to work. Track record TalkTalk’s decision to transfer a complete contact centre operation to HGS was supported by three years of experience working with HGS’ contact centre in Chiswick, West London. “HGS had worked for Tiscali for seven years when we acquired that business in 2009,” explains Andrew, “and played a major role in migrating Tiscali’s customer base to new TalkTalk services.” Nic McAllister, TalkTalk’s Head of Customer Retention at the time, knew the switch would be complex. “Tiscali’s services were priced significantly below the market rate and their tariffs were “Retaining customers and complex and variable. We needed to move Tiscali customers onto TalkTalk tariffs and standardised maximising their value is the biggest pricing. We would be moving away from, literally, hundreds of pricing structures to just one.” challenge any company faces. Over The vast majority of customers would see no increase in prices, but for a minority, there would be several years HGS has proved an increase. TalkTalk worked closely with HGS to understand how customers might respond to the that they not only understand that retention packages on offer and to devise the best way to present them.
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