Will charging customers to skip call centre queues become common practice?

19th Sep 2014

In 2009, upon being asked by a journalist how he planned to keep spiralling airfares down, Ryanair’s CEO, Michael O’Leary said he had a cunning plan: "One thing we have looked at is maybe putting a coin slot on the toilet door so that people might actually have to spend a pound to spend a penny in the future. If someone wanted to pay £5 to go to the toilet, I would carry them myself. I would wipe their bums for a fiver."

Perhaps put off by the idea of having Ryanair’s imperious leader stood next to them as they attempted to use the loo, consumers and the media reacted to the idea with acrimony; how could anyone be expected to pay for a service as rudimentary as using the toilet? How dare someone test our basic human rights?

Fast-forward a few years and step forward telecoms giant, EE, which announced last month it was introducing a 50p charge to anyone wishing to jump the queue for their customer service phone line. The backlash was equally rancorous, however the difference between the two ideas was profound; EE wasn’t entertaining the idea to gauge public response – they were announcing that the process was being introduced with immediate effect.

Sign of the times    

OK, Michael O’Leary announcements always come with some subsequent baggage, but Andy Smith, head of customer insight for EvaluAgent believes EE’s decision is a ‘sign of the times’:    

“From hospital parking to airport trolleys, organisations are increasingly trying to persuade their customers that a high quality service is something we should be willing to pay for.

“Charging customers to jump queues is already becoming commonplace across the service industry. Consider that since 2008 a number of UK airports have charged for the use of luggage trolleys - the justification given was that it was in order to improve the service.

“The pressure to cut costs while meeting customer expectations and delivering shareholder profits are all factors driving the trend to add a premium for service elements that used to be free. Ultimately it allows service providers to reduce the quality of the overall service and levy a small fee for that which they used to provide for ‘free’.”

No satisfaction?

Whatever the chosen method, there’s no denying that the telecoms sector is in need of a customer service revamp. Ignoring the recent turmoil caused by Comcast in the US, telecoms operators in the UK are currently suffering from a negative public perception, with the recent Institute of Customer Service (ICS) UK Customer Satisfaction Index (UKCSI) rating telecoms in ninth place for industry-specific service quality.    

According to Jo Causon, chief executive for (ICS), this is something that is forcing telcos such as EE to test new initiatives with the customers, with some of them asking more questions than they answer:      

“A focus on the customer experience can have a definite impact on a business’s bottom line and it is clear from the latest UK Customer Satisfaction Index that the telecoms sector must endeavour to improve.

“In the case of EE’s newest initiative it needs to be clear what the supplementary charge involves: what are customers paying for, what are the added benefits which will be received and what happens if they choose not to pay? If customers choose not to pay will they still receive a high level of customer service?

“These are important questions as a basic level of service should apply for all customers especially if the option is added to any lines which are used by customers who may have problems. It is inappropriate to charge for service recovery.”

Standing out for the wrong reasons

David Sheridan, director of operations at mobile engagement company, mGage believes EE’s decision can only place the company in a negative light during a period of increasing public pressure, regardless of the improved service people who pay the 50p charge might receive:

“The argument that charging a fee will improve customer service just isn’t palatable from a customer perspective - there is an expectation from paying customers that this is already priced into the services they are paying for.

“That the UK mobile market is so mature and competitive makes this decision all the more surprising - it makes EE negatively stand out from the competition and provides consumers with the sense that EE are profiteering when they should be focussed on improving customer service. Social media feedback since the announcement has been very clear on this point.”

Driving customers online

Charlotte Waller, marketing manager for Visebility recently wrote a blog post on MyCustomer suggesting that the 50p charge may be less about encouraging people to pay for basic service, and more about pushing their customers into other channels to lighten the strain on telephone services.

“By 2018, it is expected that one in every seven pounds spent in Britain will be spent online; this shows a huge move from traditional in-store buying to comfortable and accessible home shopping,” she says. “If businesses are able to trade online then they should be able to manage customers online and the customers themselves expect this.

“Having online chat capabilities is a huge benefit for most e-commerce businesses as it allows them immediate one on one communication with customers as opposed to lengthy queues and foreign call centres which only serve to frustrate customer who, up until that moment, had received quick and easy service via online sites.”

This could be seen as a risky strategy, regardless of the benefits of channelling customers online. A recent survey in the finance sector by Smith & Milton stated that nine out of ten customers still rank the service they receive via the telephone as most integral to deciding whether to stay loyal to their bank or not, and that brands as a whole might actually need to focus more attention to their telephone services in coming years, as opposed to less.

Premium service?

Research from ICS also suggests that it is far more likely that EE’s charge is attempting to play on customers’ desire to find a balance between service and price. Despite 65% of people in the recent UKCSI study stating they may not be happy paying for ‘an enhanced level of customer service’, 20% stated they would be willing to pay more for the highest level of service, and it may be this 20% EE are focused on.

EE stated that its telephone charges are designed to give its customers the option of a premium service, as the finances gained would be channelled back into allowing staff to deal with customer queries better. Jo Varey, MD at Granby Marketing Services suggests customers will buy into this concept, but only if EE is able to show an improvement in the training its staff have had:

“What brands should be focusing on…is ensuring they are investing in comprehensive training across their call centre operations,” she says. The agents are effectively the brand guardians, responsible for delivering a high level of customer service, which is in keeping with the overall brand experience.

“Alongside this, the operations must be correctly managed and set up to manage the volume of customer calls in efficient time. Above all, they need to have flexibility to react and adapt to spikes in activity to avoid risking customer facing delays and loss of earnings. Do this well, and brands are more likely to see a far higher level of customer loyalty, and reap the financial returns as a result.”

Ultimately, the customer will have the final say over whether the 50p charge for customer service queue jumping is something worth paying for. Early signs suggest that a business aiming to charge a premium for standard service is playing a risky game with its most valuable assets – its customers:  

“It is vital that organisations take time to understand their customers and ensure different customer needs are recognised and catered for,” Jo Causon adds. “What is clear is that information about any additional charges must be accessible and, where possible, introduced to the customer at the beginning of the relationship.”

Perhaps Ryanair’s brand story may serve as a guide for how EE’s approach may yet pan out. Having spent over a decade announcing service surcharge after service surcharge to keep overall flight costs low, the airline published details of its first profit dip in five years in May, and subsequently, Michael O’Leary declared the business would be changing its approach, ditching the complexity around the charges to become far more customer-centric.

The result? Almost instant success, with passenger numbers up 4% in August. Proof that brand perception, above all, usually guides service price at any level.  

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