Putting the Service in ISP
Over the past 10 years the telecoms sector has been through a boom and bust cycle which has resulted in a number of key players ceasing to exist, while those that remain are undergoing significant changes in their methods of market engagement.
Internet services have become an increasingly important part of the market, but this is a high volume, low margin business and the relentless drive to reduce the cost of service delivery has seen consumer experience suffer. This has now reached a point where customers are voting with their feet, creating high level of churn in the space.
Michael Allen, Director of Service Management at Compuware, says in the early days when the ISPs first started offering services to customers, the main features offered included applications like web browsing, file transfer, e-mail and news group access.
Security issues like viruses and worms were almost unheard of and since the dial-up lines provided a natural control on the maximum through-put of the customer’s Internet connection, poor performance issues happily went unnoticed or were accepted as the norm.
“However, services demanded by today’s Internet consumer and offered by ISPs are very different, resulting in new network management challenges requiring new approaches and new solutions. ISPs are now expected to provide high speed Internet access via broadband for real-time applications such as VoIP, gaming and video streaming. Broadband offers a more seamless experience so users rarely pay it much attention, though with this attitude comes an expectation of a high level of service.
“Minor problems that were previously tolerated with dial-up access are no longer acceptable as they can significantly affect the performance of real-time applications. Delays in upload and download times combined with poor customer service responsiveness from ISPs keen to reduce costs is resulting in dissatisfied customers looking to other ISPs to meet their broadband requirements,” he says.
Arthur Goldstuck, World Wide Worx MD, says a major factor behind customers becoming more demanding is a trend called the experience curve, which World Wide Worx identified in its research of Internet use in South Africa.
“Our research revealed that when people have been on the Internet for more than five years, they gain the confidence and experience to begin using the Internet more actively, moving into activities like online shopping, Internet driven applications like Skype and social media services like blogging,” he says.
Allen says a more demanding customer has also had the benefit of an increased number of broadband providers to choose from. This has resulted in ISPs focusing on attracting new customers with deals and benefits that reduce their already low margins. To counter this, ISPs are trying to build revenues by providing more than just connectivity, offering a range of higher margin services such as Voice over IP or IPTV.
The challenge of a broader offering
“However, performance problems with these higher value offerings are far more noticeable and have a greater impact on customer experience. For example, a lag or disruption during streamed video is far more frustrating for the viewer than a webpage that uploads slowly and poor performance of such a service is likely to lead to customer churn far more quickly than in the more traditional service model,” he says
It seems obvious then that ISPs need to protect profits by finding ways of bolstering customer loyalty rather than trying to lure each other’s unhappy customers away by promising services they may not be able to successfully deliver. The most logical way of doing this is to ensure customers are receiving the standard of performance in line with their expectations.
Goldstuck agrees, saying it’s about understanding the users and meeting their needs effectively. “The Internet is moving to the place where the user decides how sites and services should be used. If a service does not do what they need it to, they will look elsewhere.”
Along with providing services that boost customer loyalty, ISPs need to address any performance issues as quickly and painlessly as possible for the customer, says Allen.
“While this may be the theory, in practise a common scenario is for a consumer to access the Internet or Internet application and find it running slowly for no apparent reason. Possible causes could include a virus or spyware on the PC, or issues with local contention, or with the ISP itself. The real problem is a lack of visibility and control. While call centre staff can provide general recommendations based on experience, they will have no real way of knowing what the problem is, or whether it even lies with the customer’s PC,” he says.
Meeting user experience
It is therefore vital that ISPs increase the visibility of their customer’s experience if they want to improve the service being consumed. By doing so, they can recognise when there is little or no internet service available to the customer or identify issues originating from another source, for example the ISP of the website a customer is trying to access.
If the problem lies with the user’s own equipment, such as some kind of malware being installed, visibility of the customer experience will enable the ISP to advise them of the situation and provide recommendations for tackling it.
Ultimately, visibility gives ISPs greater control so they can determine how best to manage and advance the networks and services offered to clients. This kind of approach can help ISPs emphasise that they are not just providing a commodity product, but an internet service. This is vital for reducing customer churn rates and attracting new business.
Goldstuck says tracking experience and benchmarking acceptable user experience levels will be key for Internet-based businesses moving forward.
“ISPs along with corporate websites will need to meet the needs of their uses, or risk losing them,” he says.
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