Price Rises Cost Customer Loyalty

Sky TV - have they picked the wrong time to test customer loyalty?

As the news about the economy gets worse, companies are struggling to maintain customer spending. Some of the big boys act as though they hope to keep our business how ever much they test our loyalty.

Three examples of companies testing our loyalty this week.

They all lost...

British Airways has cancelled my partner's Silver Executive Club membership. For the first time since 2002 she can no longer use the BA lounge during her weekly business flights. Last year she switched to flying BMI during the terminal 5 fiasco when many domestic BA flights were cancelled, so she didn't earn sufficient loyalty points. BA has saved the cost of providing free coffee and newspapers while she waits to board, but lost her loyalty and their share of an annual four figure sum spent on business travel because now she'll prefer to fly BMI - where she can use the Silver lounge.

Norwich Union upped our annual home insurance quotes by a few more pounds this month and lost both our polices. My quote from Churchill is over £120 less, my partner's £80 lower. We're £200 better off, Norwich Union has lost £550 worth of business because it made the mistake of believing we'd keep stumping up for their annual price hikes. When my partner called to cancel NU immediately offered a 15% reduction. If they could do that when the business was heading out the door why didn't they hold the price increase when they quoted - which may have saved a customer?

Sky Television. Just over a year ago Sky feared its customers might jump to a rival TV and Broadband Phone package so it decided to give existing customers their basic broadband package free. This year it has decided to start charging £5 a month. Customers can avoid the price increase if they opt to take Sky Talk. We don't want to buy phone calls from sky - or pay to use 1471. To get this and other BT type services free we need to switch to Sky telephone line rental. Dealing with Sky is troublesome enough, without giving them more of our money.

So we decide to switch my partner's Sky basic broadband to o2. It's faster, gives unlimited downloads, free wireless router, no connection fee, free UK based customer service and its only £2.34 a month more than Sky's new charge (£7.34 to O2 customers). Even better sign up via a cashback site like Topcashback and you get paid £25 to buy which is effectively 3 months free.

Phoning Sky for a MAC - the code you need to transfer the line from one broadband supplier to another is less easy. Sky seems to have moved some of its call handling off-shore. After 22 minutes the call is put through to an officious customer services representative who decides to cancel the broadband rather than issue a MAC. When asked why he has done this he becomes defensive, and then quite hostile. When I ask him to transfer my call he terminates it. Again we call back and then after 20 more minutes on hold the call is terminated.

My partner and I have a quick chat about how much we hate phoning Sky. Then we hit on an idea. What if we only ever have to phone Sky once more? Let's cancel the subscription. How good would that feel? This would not have crossed our mind if Sky hadn't decided to start charging £60 a year (12 x £5) for its slow, rubbish broadband, had spent some more money training its staff and decided not to outsource its call centre. Sky is going to discover the true cost of these three cost-cutting actions - because they're about to lose £258 of existing annual subscriptions and £60 of future broadband fees.

Norwich Union loss = £550

Sky loss = £318.

Savings to annual budget.
Sky £318 (less o2 broadband £63.56 after cashback) = £254.44
Norwich Union £550 (less Churchill policies £335) = £215.00

Total saving = £469.44

Of course wherever there are losers there are winners. BMI for its punctuality, o2 Broadband for its UK call centres, uncapped service and customer discount and Churchill Insurance for its introductory discounts and market leading rates.

When companies test our loyalty make sure to add up the real cost.

02's apology

o2 Broadband: 9/10 customers would recommend us

The story so far: I complained that o2 gave my email address to three different market research companies - without my permission - a breach of their promise and the Data Protection Act.

Today I received an email from o2's Head of Customer and Market Insight. She's sorry to learn of my 'disappointment at the way your personal information has been handled'. o2 stop short of admitting a breach of the Data Protection Act, although the email admits our partner agency's rules were broken when my details were passed from one research company to another.

"We're investigating what's happened and how we can prevent similar mistakes in future, so I'm grateful that you contacted us."

o2's email goes on to reassure me that the researcher working on the mobile phone survey is:

"fully aware that her contact details have been passed to o2 customers."

(I must have misunderstood her when she told me she would have to change her personal email address as a result). In answer to my complaint about the number of third party emails I received after taking o2's survey, they answer:

"We understand the concern you have raised in being contacted three times in short succession. This is not the experience we want for our customers, and as a result of your complaint we are now looking at our sample management processes in detail and will put some extra rules in place to avoid over contact."

o2's reply leaves 3 unanswered questions, so I phone and leave a message. Later this afternoon I got the opportunity to ask o2's Head of Customer Insight in person.

Question 1: Why doesn't o2 doesn't brand its market research invitations with a logo and o2 email address?
We do, your invitation to take the first Broadband survey has an o2 logo.
I'm sorry to contradict you, but I have it on the screen in front of me, and it doesn't have the o2 logo.
We need to look into that. But we don't brand all our research, because if respondents know who the research is about it skews the answers we get. So the mobile phone research you were invited to take part in, isn't o2 branded.
I'm sorry to contradict you again, but the first line of that invitation reads 'We are conducting market research for your mobile phone provider o2' - no respondent could be in any doubt about who the research is for - so if anonymity is your intention it's failed. Why do you offer respondents small amounts of money to take the one of your surveys - instead of paying £2 to make a phone call, why not just make it a free call number instead?
That's an interesting point, we'll look at that. We don't offer a cash incentive for the first survey because we need to be able to demonstrate to senior managers that customers aren't bribed to give positive scores.

Question 2: o2 warns customers against revealing their email address - why does o2 let third parties make direct contact with its customers?
When we give our agents your email address they are bound by the Data Protection Act and don't use them for any other purpose.
But one of your agents - TNS - did pass my contact details to another party - in breach of the Data Protection Act.
Yes and they shouldn't have done, and we are investigating that mistake.

Question 3: It was very difficult initially to make my complaint heard - despite the fact that any customer phoning o2 has to undergo lengthy security questioning - all in the name of Data Protection. Customer Service don't have any training in how to deal with a Data Protection complaint, even though they ask Data Protection questions in every call. They can't even name o2's Data Controller.
The Data Protection Act is very complicated. We do need to look into that, but I have never received a Data Protection complaint before.

o2 spend a lot of money with research agencies discovering what their customers think. This customer's insight is free - although o2 has generously waived my broadband subscription charge for the next three months (oh, and I cheekily asked for a free usb mobile modem, so I can write this blog on the move... yeah, dream on).

o2's Market Research Data Protection Meltdown!

The story so far: My broadband supplier, o2 invited me to take part in an online market research survey. They promised not to use my email address for any other purpose.

I happily took their survey - they provide a great service but then o2 broke their promise. Since taking the survey I've been emailed by 2 more research companies.


Who else has o2 shared my personal information with?

When I first called o2 to complain that their market research company (TNS) appeared to have shared my email address with another marketing company (Valued Opinions) they denied even carrying out research, 'That's just spam' they said. Then I sent them the emails.

After investigating o2 put the survey on hold while they investigated the link between TNS and Valued Opinions. And I was happy about that.

But almost immediately after I put the phone down on my last conversation with o2's manager I received another email. This latest email invites me to take part in a focus group about my o2 mobile phone. o2 will pay me £60 to hear my feedback. Importantly the email wasn't from o2 - it was from a company called Indiefield.

When I called the person named in Indiefield's email I discovered she didn't even work for Indiefield. So I was interested in how she got my email address - especially as I had just complained to o2. In fact it turned out she hadn't sent out the invitations and she didn't know the email would give out her personal email address and phone number. All weekend she's been inundated by o2 customers hoping to claim their £60. That's not very professional is it o2?

So now o2 has shared my email address with 3 separate companies. Who else do they plan to share my details with?

I checked the privacy declaration I made when I signed up with o2 and was reassured to see that I had restricted access to my email address to o2 - for their use alone, no third parties. (o2's website also advises customers how to avoid spam by - keeping their email address private!).

I'm happy to take part in market research, after all that's how companies gain customer insight to help develop and improve their services. I took part in o2's broadband survey willingly. I was reassured that o2 wouldn't use my email address for anything else. If o2 want to ask me about my mobile phone that's fine too - but only if o2 has the courtesy to ask first. Don't just go handing out my email address o2 - if you make so freely with my personal information how can you be sure the people you give it to will won't do the same?

Today I've emailed o2's Chief Executive Matthew Key to ensure o2 is aware of its obligations both to its customers and under the Data Protection Act.

Of course I could type Mr Key's email address here in case o2 has been careless with your email address too. But I have more respect.

I'll let you know how o2 reply...

More telephony misery

It's all telephony problems today. An executive calls from the Chairman's Office at BT (see previous post and update). He explains they will investigate the poor customer service I have received and respond. Just for fun I set a deadline of 4pm before I notify Ofcom.

O2 have an altogether different customer service approach. UK based call centres, no endless menus to select from and people who know stuff (or more accurately have been trained). Unfortunately the bit of my O2 broadband service which delivers email to my mobile has abruptly stopped delivering. After an hour on the phone I discover that this is a freshly emerging fault at O2 HQ. I am assured they will come back to me when they know more.

A couple of hours later and I start receiving test emails to my O2 inbox (but sadly not my mobile). Then O2 call me to discuss my broadband service. They offer helpful general advice and reassure me they are working fast to resolve the email issue. I also have a 100 day money-back satisfaction guarantee on my side (but I doubt I'll be exercising it).

Meanwhile BT are very quiet. If o2 ever decide to offer home phone packages I will happily give BT the boot. I see from the various forums I visit that BT has lost a lot of loyalty over the sneaky way they've introduced the new price hikes.

Call Centres - Don't you just love 'em?

I've just been watching Channel 4's Cutting Edge 'Phone Rage'. The producers have managed to gain amazing access. First Direct bank obviously think so too - because they've paid for ads in the break around their section to advertise that they'll give you a £100 to switch your bank account to them. As you'll know from my previous post about Abbey's dwindling customer service I'm in the market for a new bank. £100 is quite a tempting offer. I've heard great things about First Direct - and they did come top in the BBC Watchdog poll. However I was a bit unconvinced by the sight of the team members (no bank managers at First Direct - just team leaders. Paddy's team is called 'Paddy's Power House') 'sumo wrestling' in a paddling pool filled with coloured balls, to one side of the call-centre. It may be an effective way to promote team bonding but looked more like an unruly kids' birthday party - not quite what I had in mind for my cash.

Incidentally I'm no great fan of South African call centres after my recent Madasafish experience (see previous post) and some of The Cutting Edge film's cruel cuts between UK and offshore did highlight real cultural communication problems - but having recently visited Cape Town I can testify that workers are friendly and ambitious - and not quite as world apart as protrayed in the film. That's editing for you.

Call centres have a bad image, often deservedly so. Some of them are terrible - British Gas is probably my all time worst. Energywatch say so too. British Gas has the worst customer service record. After endless menu options I found it took up to 20 minutes to speak to a person and they couldn't often help. Every year BG say they'll improve, every year (so far) they've failed. I closed all my accounts with them - and wrote to the chief executive to explain why. I didn't recieve a reply - but that was the year they lost a million customers. Corresponding with an average of 4000 departing customers every working day would be beyond the means of even the most communicative of chief execs. I switched to Southern Electricity. It's free to phone them and they answer right away. I will remain loyal while they keep it up. The other call centre I'm impressed with is O2. That's one of the main reasons I signed up for their Broadband. So well run call centres can help grow the business.

On the subject of O2 - this is a late post. My new O2 broadband connection only went live at 7pm tonight. A full report next time.

Finally Madasafish live up to their name

I succumbed to the lure of a Broadband connection in August 2005. I'd just come back from Canada and finally realised that dial-up was stone-age after experiencing always on, super fast Internet. However having come to such a breakthrough decision I promptly made a big mistake. I signed up with Tiscali. Tiscali were TV advertising a market leading low price and I had previously used them for a very cheap dial-up package. Tiscali was a Bad Choice. After over a month of waiting several 'live dates' came and went so I called their ever so unhelpful off-shore call staff (why is it that when you sign up the operators are all in the UK, but when it all goes tits up you're speaking to someone 5000 miles away who's working the night shift?) to cancel as they were in breach of contract. "No problem" they said.

That was when my problems began. It's now well known that you need a MAC code to migrate your broadband to another provider. Would Tiscali give me a MAC code? Silly question. I tried to order with another provider 'And your MAC code?' I haven't got one. 'Phone us back when you have'.

So Tiscali were 'squatting' on my telephone line. I couldn't shake them off and I couldn't sign up with another Broadband supplier. These are the situations regulators are dreamt up for. In my time I've complained to quite a few regulators and threatened to complain to quite a few more. It doesn't always work - there can be quite a lot of hurdles to jump through before they'll help. But when it came to evicting Tiscali, Ofcom - the telecoms regulator - were more than up to the job. One phone call explaining the problem and I got a phone call from Tiscali and a letter from Head Office explaining that following contact from Ofcom they were releasing their marker on my telephone line.

It was then that I began my love affair with Madasafish. However like many love affairs it would one day turn stale. That day arrived late last year when Madasafish 'The Friendly ISP' got involved with someone else. Then there were three of us in the relationship and sadly the 'other party' was BT. It may have been a co-incidence but after BT went shopping for small successful broadband suppliers they managed to screw up the very thing which had made them successful in the first place - excellent customer service.

A few minor niggles with Madasafish turned into a string of disasters during which their customer service team (based in South Africa) managed to undo all the good work of two and a half years of service with barely a glitch. My speed had dropped - I needed a new computer they said, a new router...a new service provider I began to think. I began to research (the first stage to any complaint) and discovered that I had been taken for a mug. New customers were being offered a far lower price - not just as an introduction (as I had been) but forever! Now I noticed that the forums where techy types swap broadband horror stories - in particular the excellent www.thinkbroadband.co.uk weren't so glowing about Madasafish as they had been when I signed up.

It was while I was following the posts on Thinbroadband that I realised Madasafish were actually providing better customer service via secret PM's (private messages) between an omni-present poster named 'Samara - proud to be part of the Madasafish team' than they were from their own customer service centre. Suddenly my speed problems were being investigated, a new deal was on offer - cheaper than any on offer to other new customers. I received telephone calls, and attention. Madasafish were courting me again. But then their new systems intervened to destroy the best efforts of their loyal staff. I didn't receive the crucial email confirming a new deal and my technical problems didn't get resolved. When their metering of my broadband use appeared to be broken (I was away from home but my 'usage' was sky high) they suggested I sign up for a higher allowance - at a special nudge, nudge, wink, wink rate of course. I had made my mind up, the love affair was over. Not only that, I was now feeling just a little bit 'mad' with them. Not perhaps 'madasafish' but certainly they had driven me 'mad'.

Finally after two and half years 'madasafish' lived up to their curious name.

Two and a half years is a long time in the broadband world. Now there are deals for under a tenner a month which will give you a free wireless router, super-fast speeds up to 8mb and unlimited downloads. Sign up for a package bundled up with satellite TV, cable TV, a home phone or a mobile phone and you can even get broadband for free (although of course I do believe you get what you pay for - free is very rarely the least hassle - ask any Talk Talk customer about their 'free' broadband).

Tomorrow I expect to be rid of Madasafish, their broken promises, their secret whispered messages and offers of token gifts. For the last week I've been receiving lovely texts, emails and gifts from my new interweb partner. I hope my new found love affair with O2 won't end in tears. At least BT sold off O2, so there's little chance I'll ever find myself back in bed with BT...