Wednesday, October 31. 2007What Has Telstra Big Pond Suddenly Become?John Linton I was looking at the preliminary monthly revenue results for October this morning over breakfast, always a cheerful way to start the day, and while they presented a pleasing symmetry in terms of their increase over the revenues achieved in September other contributing trends were not as pleasing - and one was quite concerning. The report that caused me concern was the report that tracks where Exetel customers go when they leave Exetel to move to another provider and that tracks where customers who transfer from another ISP come from. Over the almost four years these details have been tracked the results have always been relatively easy to understand and, on more than one occasion, provided interesting insights in to what was happening within other ISPs. From February 2004 until quite recently these twin reports pretty much showed what anyone familiar with broadband provision by different companies would expect to see. Over that time they accurately predicted the demise of the smaller/badly managed ISPs with sharp spikes in the churn to Exetel report in the 2 - 3 months prior to their demise. Similarly they accurately tracked some 'groundbreaking' new offer by an ISP: like the 1500/256 for $29.00 from TPG in October 2004 and the introduction of TPG's subsequent 'unlimited 1500' plan - the spikes were always marked but short lived. The concern to me this morning when I read the report, was the trend in customers leaving Exetel and moving to BigPond starting 3 months ago and becoming the largest single 'move to' ISP in October. From the very beginning of Exetel until July 2007 the one constant in this report was that the majority of customers who transferred from another ISP to Exetel were from BigPond and virtually no Exetel customer ever transferred from Exetel to BigPond. For the last three months that 'constant' has disappeared and BigPond is now the ISP that the largest number of Exetel customers transfer to and has dropped (from the largest by a factor of double that of all others combined) to only the third largest of the ISPs from which customers transfer to Exetel. In the past the most favoured ISP to which customers who left Exetel churned to varied from time to time - there was never one preferred ISP. That has changed over the last three months and the change is so marked it must mean something; I just don't have any idea as to what it does mean. Given the huge size of the BigPond customer base (around 60%) it was always logical that BigPond would be the largest source of transfers in. The fact that Telstra was always so expensive meant that someone was unlikely to transfer back to Telstra if they were unhappy with some aspect of Exetel - and for over three years this self evident scenario continued exactly as expected. Now it doesn't. The number of customers transferring away as a percentage of total customers hasn't changed in three years by more than a few hundredths of a percent from month to month (an average of less than 0.3% per month) so the actual financial loss hasn't changed and is, and never has been, of any financial concern (of course it's a concern in terms of customer dissatisfaction but that's not what struck me). While the numbers are small, they are evenly distributed across all States. I'm sure it means something.....I must find out what that is. Trackbacks
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HINT: Customer service
Comments (2)
That would mean that all of the ISPs that Exetel customers previously churned to were suddenly somehow deemed to have a lesser level of customer service than Big Pond - I doubt that could be the case.
As I said, there has been no change in the number/percentage of transfers to other ISPs - only now they go to Big Pond instead of the previous main destinations. Perhaps my phrasing was so poorly executed you were under the impression I was wondering why some tiny percentage of customers left Exetel to move to another ISP - rather than being puzzled by the change in destination. Comments (2)
Apologies, John, my glib message was so poorly executed that I did not convey the meaning I had intended.
Customers must be churning back to Telstra in higher numbers because, rightly or wrongly, they figure that Telstra can offer them something no-one else can. I'm suggesting they are looking for better quality customer service and they think the mature "market leader" is the one best positioned to deliver. These customers may be frustrated to the point where quality concerns have sidelined their price sensitivity. Such customers will go with the service provider they believe are likely to offer the most reliable telecommunication service but who will also interact with and support customers in "the right way", particularly when problems arise. Telstra is readily available by phone and email. Telstra customers can escalate their issues if dissatisfied. Telstra is big (reassuring for risk-averse or once-bitten-twice-shy customers). Telstra has identifiable structure along functional lines (as irritating as it can be to be bumped to a different department, structure makes an organisation more coherent for customers). Telstra emphasises customer service in its marketing, across its channels, and within its departments (to the extent that Customer Service is an regularly monitored internal Key Performance Indicator at the Centre, Team and Agent levels -- at least it was in the outsourced call centre I used to work in). Telstra has a more tightly integrated provisioning and supply chain (despite operational separation). Subject to certain conditions, Telstra can do a relocation of phone and/or broadband services without treating it like a cancellation the way Exetel must. Telstra is more flexible in their billing arrangements and refund policies. Many Telstra broadband customers are able to change their plan mid-month rather than wait till the next month. For churning customers, all of this may translate to a trust perception of "the brand of lesser risk", "the brand of more flexibility" and/or "the brand of more experience". Food for thought. Comments (2)
Hi John,
Your answer is here. http://www.ozbargain.com.au/node/1758 Comment (1)
Thank you - I was aware of that offer being made but haven't been able to find any details.
It's a good deal - apart from the 24 month contract and seeing what the actual ts and cs define. Exetel's Optus based ADSL2 plan at $60.00 pretty much beats it in most respects - and assuming the customer uses VoIP provides much, much lower cost calls. Comments (2)
Perhaps it would be a good idea to ask leaving Exetel customers why they're leaving and why they chose their destination ISP?
It could be included as part of the user facilities termination form. Comment (1)
Could it also be in response to their 30Mbit rollout and marketing? People will often see the "30Mbit" figure and fail to see the "up to" in small print, just like for ADSL2+ where people complain they are "only getting 12Mbps speeds out of their 24Mbit line".
Comment (1)
I don't know about customers churning away from Exetel, but I'd reckon that one of the reasons why the number of people churning to Exetel from Telstra has dropped, is because as time goes by, there may be fewer unknowing people stuck on Telstra's 24 month poor value contracts.
Comment (1)
I'm a bit late to the ball on this one. I had one customer churn from Exetel to Telstra for a few reasons.
1 - Telstra rang them and offered them Homeline Ultimate with free local and STD calls. 2 - They were one of the first customers I had signed up with Exetel, and still had SIPme for VoIP, via a Billion modem. (A bad combination back then) 3 - They thought they'd be saving money by getting FaxStream, but in the end their fax was not compatible with it. So, it was a short sighted impulse decision based on telemarketing that primarily caused this change, coupled with a bad VoIP service (which I had offered to fix by changing them to the (now cheaper) Exetel), but the telemarketer beat me to it.) I lost one other to Telstra, I think only for ease of billing or something. (It was a pub business.) Cheers, Mike. Comment (1)
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