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Vodafone

Can Vodafone justify blaming record complaint numbers on an IT glitch?

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1st Apr 2016
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According to Ofcom data released this week, the UK telecoms sector received 10 complaints per 100,000 customers in Q4 of 2015.

The figure is slightly up on previous 2015 quarters, but much lower than the record figures of Q4 2011, which topped out at 19 complaints per 100,000 customers.

And the current figures pale in comparison with corresponding levels for broadband providers and fixed phone line provider complaints, at 19 and 15 per 100,000 in Q4 2015, respectively.

Despite this, one brand sticks out amongst the telecoms figures published.

Vodafone has seen complaints spike three-fold in the last two quarters of 2015, hitting 32 per 100,000 in Q4 and far exceeding the figures for the other brands in the sector (zoom to enlarge):    

Vodafone

Whilst many brands might have already adopted a preemptive firefight mode, Vodafone’s response has been to lay the blame at the door of a recent IT glitch, saying customers had become frustrated by a billing system switch.

"The points highlighted in this report largely relate to a major programme we undertook last year to transfer customers on to a new billing system, aimed at simplifying the operation of their accounts and opening up a range of better services, such as 'click and collect'," said a spokeswoman, in response to the Ofcom figures.

"Unfortunately, there were some problems during the highly complex migration. Now that the migration exercise is essentially complete, we expect our £2bn investment in our network and services will start to deliver a step change in customer experience."

Declining satisfaction

The question is whether this is an acceptable response to such a customer-related issue, and why Vodafone has waited for regulatory figures to be announced before issuing any statement.

Jo Causon, the CEO of the Institute of Customer Service says the response merely brings widespread publicity to a sector that’s been in decline for a while:

“According to the latest UK Customer Satisfaction Index, the telecom sector is the least well performing of all industries monitored. 

“There has been some improvement over the past twelve months, but this should not lead to complacency because customers are telling us that attention needs to be focused on how enquiries are handled and how they are kept informed about changes.

“It means that, in a world where customer priorities are changing and where continued consolidation is affecting customer choice, the boardrooms that focus on improving customer experience will be the ones to increase loyalty and, with it, market share.”

And customer experience consultant and CXPA co-leader, Ian Golding issues further warning to the industry as a whole, adding that the trends occurring in telecoms mimic those experienced by other, historically state-run sectors in the UK:

“The telecoms industry has been going the same way as the energy industry. The difference is that, historically, the energy industry has always been pretty poor at delivering customer experience, whereas 15 – 20 years ago the telecoms industry was at the forefront of delivering great experiences. Over time the focus on delivering financial returns to shareholders has completely taken away the ability to remain customer-centric.

“The situation with Vodafone is no different to what happened to Npower. Vodafone’s reputation has been in decline for a while from a customer perspective, as has many of the other telcos. But to blame a publically available piece of information on an IT system is not what anyone wants to hear. Npower did the same thing – they lost 350,000 customers because of the ‘billing system’.”

Consumer watchdog Which? condemned Vodafone’s statement. In its 2015 mobile satisfaction survey of 3,530 members of the public last February, it was Vodafone (345 users polled) who achieved an average customer score of (53%) – the worst score of all eight UK mobile phone providers rated. Richard Lloyd, executive director for Which? says this research, coupled with Ofcom’s latest findings and the Vodafone response, highlights a company currently uninterested in its customers’ opinion:

“We all increasingly rely on mobile phones in our daily lives, so to see so many complaints about billing and customer service problems is deeply worrying.

“Vodafone also performed poorly in Which?’s 2015 annual mobile customer satisfaction survey. Vodafone must listen to their customers and resolve these problems as quickly as possible.”

Indeed, Golding adds that until the company starts to recognise issues such as its complaints spike and is proactive with its customers, it is only likely to experience further decline in the near future.

“For all of the rhetoric, are Vodafone really making strategic decisions that put the customer at the heart of what they do? I don’t think so. If I’m a Vodafone customer, hearing this news just makes me think, “when my contract is up, am I really going to stay with this company?” Blaming something like this on an IT fault just doesn’t fly.

“Vodafone should’ve admitted there was a problem earlier and reassured customers that these problems were due to be fixed. The current rhetoric does nothing to resolve what is clearly an inherent problem.

“A customer-centric business would’ve spoken to its customers properly before Ofcom released the data. The customers already know there’s an issue because they’re complaining in record numbers. Don’t wait until it’s too late before doing something – it puts a nail in the coffin of customer experience. It’s defence rather than offence. It shows a lack of care. As soon as that spike in complaints went up, there should’ve been activity in place to deal with the issue. As soon as there’s something wrong, you should start communicating with customers to establish the problem and devise strategic solutions.”

The telco giant will continue to argue the fact that it is investing heavily in its service to try and rectify the current mood among customers, however it may need to change its culture too in order to completely turn the tide. If Golding is right and it does follow the trends that occurred at Npower, it may be in for some difficult times in the near future.   

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