Regular readers of this column know that I like to divide carriers into bandwidth providers and service providers. The latter focus on delivering solutions while the former provide pipes.
Here’s the funny thing. Remember Garrison Keillor’s quip about every child being above average? Virtually every service provider thinks it’s in the “solutions” camp, but IT executives violently disagree. In recent Nemertes benchmarks, the lowest three ratings for all service providers were in billing, service-level agreements (SLA) and management.
What gives? Why do carriers find it so difficult to focus on customer solutions? And what should they be doing about it?
For service providers, the critical shift lies in recognizing that your business model has fundamentally changed. If you’re a provider, you’re no longer selling capacity on a network. You’re selling capacity in a customer-service organization.
That means completely rethinking how you approach your business, at every step of the way. Assume your core resources are your people and processes – not your network infrastructure. That means you lose money every time a billing statement or an SLA is contested, or a circuit wasn’t provisioned properly, or your customer experiences an outage. Every time a human being gets engaged to fight fires, in other words, your margin takes a hit, so your strategy should be to reduce unnecessary customer interaction.
How? Automate. Integrate. Look at every interaction – system-to-system, human-to-system, and human-to-human – and assess how it can be streamlined, improved and made more foolproof. Yes, it’s an investment, but it pays off downstream big time in reduced human overhead.
That doesn’t mean failing to talk to your customers – au contraire. High-level interaction is necessary and desirable. Use the time that you’re no longer spending on reviewing inaccurate bills, fixing flawed circuits and troubleshooting chronic problems, to learn more about your customers’ business requirements and propose innovative solutions. One of the biggest complaints IT executives have about carriers is that they don’t understand the IT executives’ businesses. One of the biggest complaints I have with carriers is they fail to take the time to understand how their own portfolio of products might profitably meet customer needs.
In summary: Drive down your unit costs as low as you can without affecting customer service, but keep in mind your “units” are engineer-hours (not megabits or minutes). The way you keep them low is by strict adherence to well-thought-out processes (and ironically, by paying your thought leaders highly competitive wages). Focus your resources on understanding customer requirements and creating highly automated and highly reliable systems and processes to deliver on those requirements.
And finally, don’t expect to charge your customers for your own operational or business enhancements. Carriers love to try to “upsell” customers to more expensive, higher-margin managed services to justify the cost of the automation investments. Don’t expect customers to jump for joy at the prospect of paying more. You need to be sure your managed services offer a clear and compelling value proposition to them (not just you).
