Will the BT-EE deal change telco content strategy?

The BT saga rolls on. Now it appears to be confirmed that they will takeover EE, the biggest mobile network in the UK. This would create a British giant by combining the largest landline network with the largest mobile network  – possibly under one brand, but certainly working together within the same group.

The Daily Telegraph has some insight into the financing of the deal, which they suggest will require a rights issue – and debt. Regulatory issues may delay the deal – especially regarding the potential creation of a telecoms monopoly. Analysts believe that because of these complications it is unlikely that any takeover could be completed in less than a year.

This means that if the deal does go ahead, it might be well into 2016 before any new and combined products could be launched.

The potential benefit of bundling services together is only mentioned in passing in the Telegraph article. A Moody’s analyst suggests that the combined company would be the largest integrated telecoms player in the UK, able to offer TV, landline, mobile, and Internet all in one package – the so-called quad-play.

But, as I wrote last August on this blog, the development of quad-play services in the UK has been patchy to say the least. British customers have generally preferred to pick out individual services with Virgin being the only big operator marketing this kind of bundle at present.

If the BT-EE deal does go ahead and the company starts planning new services that will launch in about 18 months then they need to think carefully about what the customers really want. A lot can happen in that time and I believe the wind is already blowing in the direction of telcos focusing on the content they can provide rather than competing on network access or price.

What do you think about the proposed BT deal? Leave a comment here or tweet me on @simondillsworth.

BT Tower, London

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Managing the Modern Retail Omnichannel

Omnichannel is one of those business buzzwords that is often used and seldom understood. Many use it interchangeably with multichannel, but I would argue that these are quite different concepts.

First, what is the multichannel? This is really just the explosion in the number of ways that customers can engage with retailers. Think back a decade and the channels for interactions were limited – voice calls on an 0800 number and a customer service email address were about the extent of what most companies offered.

Now the multichannel environment allows customers to use Facebook, Twitter, chat, voice calls, emails, and various review and rating sites, such as Tripadvisor. And this multichannel environment is changing all the time, so it’s an important part of what anyone in retail customer service is working on, but it’s not the omnichannel.

The reality is that retail is more complex today than ever. Customers want to blend their in-store experience with on-line in a way that allows them great flexibility. They might view a product in-store and order it online for delivery, or order online for collection in-store, or receive a product at home that they are not happy with, but they go to a store to change it.

Creating a true omnichannel environment means that the customer is no longer differentiating about how they shop with your organisation, they are just shopping with you. The distinction between the online and instore becomes blurred to the point that there is just a single view of the experience with your brand.

This is not easy. It requires your supply chain to be able to cope with a new environment, but the customer doesn’t care about your need to improve a back office ERP system. If they order a product online for collection in-store and it’s not in the store on time then it’s your entire organisation that has failed – not just the website team.

This example can be even worse if the in-store team admit that they have nothing to do with the website, know nothing about the web orders, and really can’t help other than telling you to go online again to complain.

There has to be a single channel to the brand that does not distinguish between the physical stores and the online environment – this is how the omnichannel should really be described. You fulfil orders in anyway the customer requests.

Have you seen any retailers that are empowering customers by offering them more choice around how to order, and are getting it right on the ground? Leave a comment here or tweet me on @brownsourcing.

Japanese Shopping Alley
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Creating a Single View of Your Customer

As customer service has become more complex, it has become more difficult for retailers to capture and work with a single view of their customer. The explosion in channels over the past five years means that customers will often be communicating with companies using Twitter or Facebook, or via a review on a rating website, rather than just calling the customer helpline.

This has led many customer service experts to talk about the retail omnichannel as a target state – moving on from just being able to handle all the various channels customers want to use to a situation where then can be blended into a single service channel.

A good example is how a customer might call a company after previously emailing about a problem and possibly also sending a tweet. If the customer has to explain their problem from the start then that may lead to frustration – even anger. If the agent can see on their system that this customer has been in touch recently via two different channels with details on the earlier communications then it will make the call run far more smoothly.

What is really needed is a holistic view of all interactions between the customer and the organisation. It could be via electronic communications, email or social media, or in-store. However it takes place, you should know everything about how the customer has interacted with your organisation.

But the reality is that most in-store employees don’t have information on customers from the contact centre, or from the team managing social interactions and vice versa. We know what is needed to improve so there is a single view, but it’s a difficult process for most retailers because all these systems and processes are different, unconnected, and managed by different teams.

In a retail utopia there would be a single button that any employee can push and information about the customer in front of them would appear, including their recent interactions and the sentiment they generally use – are they often complaining or praising the company?

This single view is not easy to achieve, but as more complex analysis tools become available it is possible to achieve more than ever.

Leave a comment here or tweet me on @brownsourcing and I would be happy to talk about how close the reality is getting to the utopian vision.

el ojo y el reflejo/ the eye and the reflection


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Developing Rural Broadband Increases Customer Loyalty

In a recent blog I explored some of the potential routes to improving broadband speed across the country, but it seems that I forgot to mention the sea. BT has just completed a 250km subsea cable project that connects several islands in the Scottish Highlands to the mainland, dramatically improving local broadband speed.

BT said that this was the most complex subsea cable installation they had ever completed in the UK. It involved 20 seabed crossings with distances ranging from just 1 mile to over 50 miles. This cable rollout was a part of the Digital Scotland Superfast Broadband scheme, aiming to deliver high-speed broadband to 84% of the Highlands and islands by 2016.

Building this network infrastructure was expensive, but essential for the customers in these areas of Scotland. It is one more example of the innovative solutions that network providers are exploring in their desire to ensure that customers can access high speed Internet.

Any operator that can offer access to a high-speed network and also supplies great content on their network will almost certainly have happy and satisfied customers.

In some remote parts of the country, this is going to mean thinking hard about how best to deliver a high-speed solution. There are many competing strategies for rural broadband, but the bottom line is that customers do not care. They want the network operators to offer a solution that gives them access and content – how the service is delivered does not matter.

The initiative is with the network operators. Customers will stay loyal to companies that provide access and content, so there is a long-term incentive to investing in some short-term network development.

Have you seen your own rural broadband boosted by a network provider looking to the future? Leave a comment here or tweet me on @simondillsworth.

Skandi Navica


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Telco M&A Speculation Heats Up in the UK

I recently wrote about market speculation that BT may be about to buy mobile network o2. The speculation has increased and there is a BT board meeting today with acquisitions on the agenda – Bloomberg reports that o2 is at the top of the ‘potential purchase’ list.

This type of acquisition would provide a strong quad-play offering for BT by boosting the mobile service they can offer along with their existing phone, TV, and Internet services.

But the analysts and business press are not only focused on BT and o2 at present. More market speculation surrounds Vodafone and their reported interest in acquiring Liberty Global (LG). LG owns Virgin Media and therefore if deals such as this with Vodafone and BT start going through then the UK could see a complete shake-up of the Internet and Pay TV markets in a very short period of time.

The Premier League has been one of the key drivers for the growth of Pay TV in the UK and the value of broadcast rights has grown exponentially in recent years. When BT Sport entered the bidding war for football rights it already shook up a market that Sky has dominated since the 1990s. If another player enters the next auction for Premier League rights in 2015 then some analysts believe the cost to screen live football may increase by as much as 50%.

This is an exciting time to be watching these companies. If BT does manage to acquire a good mobile phone network then it will boost the BT Group, probably leading to more confidence inside BT Sport when bidding for rights. And if Vodafone does end up owning Virgin Media then they will start competing with a similar range of services.

As I have said before, customers have lost interest in the network itself. They don’t care how the Internet is delivered to their home or how a TV service is delivered, but they are interested in the content. Sky has had a good run as the leader in the Pay TV market, but it now looks like broadcast media companies are combining with phone and Internet providers, creating a bundle of services that makes life easier (and cheaper) for the consumer.

With some new market entrants, competition will be fierce, but I believe it will be this focus on quality content that differentiates the players. Who ultimately wins and maintains a loyal group of customers will be the company that offers the most compelling content and entertainment.

What do you think about the current wave of M&A speculation in the telecoms sector? Leave a comment here or tweet me on @simondillsworth.

Vodafone taxi


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Are the energy companies just buying new customers?

The Telegraph carried a fascinating report this weekend that explored the possibility that it is now cheaper for energy companies to ‘buy’ new customers, by offering great deals for switching, than to offer great service and keep the customers that they already have.

This is a business school classic and the conventional wisdom is that it is far more expensive to use advertising and sales to attract new customers than it is to just keep your existing ones happy. If the suggestion feature in The Telegraph is true then one of the natural consequences would be a very poor level of customer service – why invest in good support if you can just ‘buy’ in more customers?

But we saw this a decade ago with the banks, where poor service was excused for many years because it was easy to move to a new company. Today this is no longer possible in retail banking as several challenger banks have arrived and are challenging the established order. Metro Bank is one example where their differentiation from the competition has focused entirely on a different approach to customer service.

Customers across any industry have a right to fair treatment. Even if The Telegraph has identified a problem with the energy suppliers and their approach to customer service, I don’t believe that this issue can remain for long.

Customer service has been identified as a key issue for the utilities. Customers are switching company, seeking out better service, and as more and more smaller firms challenge the big players this focus on working hard for customers will only increase.

Even if it’s possible to win customers today by offering a few discounts then eventually letting the customer down, that has never been a long-term strategy in any business and it will not work for the utilities now.

What do you think about the comparison between service in banking a decade ago and energy suppliers now? Leave a comment here or get in touch via my LinkedIn.

Metro Bank launch - a lot of lollies


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Food retailers are competing on customer service

Food retailers are facing a tough time in the UK at present. The biggest of them all, Tesco, is facing up to some very unusual problems related to accounting errors (still under investigation) and Sainsbury’s has seen sales fall in each of the past three quarters. It’s tough out there on the British High Street right now.

But in some areas of food retail, things are going OK. At the budget end of the market there is Aldi, where the last set of reported profits were up 65% and they plan to open 65 new stores in 2015. At the more luxurious end of the food retail market, Waitrose has seen both sales and market share increase in the past year.

So there is a complex market developing in food retail where high-end stores can differentiate themselves with free cups of tea or coffee and free food samples at in-store delicatessens and at the other end of the market, a limited range of products that are sold at the lowest possible price.

Both these models appear to be working well, but all the stores in the centre ground have a problem trying to plan where they should be, competing with the value retailers or improving their service and not worrying about the price? They also face changing store preferences as British customers are switching their habits to shopping for a small amount more often rather than loading up the car at a hypermarket just twice a month.

A new study published by the Institute of Customer Service suggests that the answer may be to explore a stronger focus on customer service. 58% of customers in this new research said that they would not sacrifice the quality of service for the price of the products they purchase.

This is quite important as it shows how almost 6 in 10 customers really do care about customer service in the food retailers they use. What is even more important to add is that 26% of customers are so focused on service they are actively prepared to spend more to receive a better service from their food retailer.

That’s three-quarters of customers who have a strong focus on the level of customer service demonstrated by the food retailer they use. It is clear that brands such as Waitrose or Marks and Spencer are already targeting these customers, but when considering whether service or value is the place to focus, it is interesting to see the 3 out of 4 customers see the quality of service as more important than price.

This is just one study and it is likely that if every British mid-market food retailer tried to go up-market at the same time then it would not work as suggested. The overall national situation is far more complex, but it is interesting to see just how much food customers value service when many media reports assume that the path to success is just to stack it high and sell it cheap.

The chairman of Tesco, Sir Richard Broadbent, made a great observation back in late 2013 when he said: “The company that provides the best relationship with the customer will win — not through product, but through the best experience.” All of us are customers of food retailers. How do you balance the desire for great service with good value when you are shopping?

Please leave a comment here or tweet me on @brownsourcing.



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