By Lee Rickwood
Do you think their ‘Friends’ rating is going up?!?
You can tell them, if so.
Long the target of open Internet lobbyists and consumer protection advocates, that government group that manages telecom services in Canada, the Canadian Radio-television and Telecommunications Commission (CRTC), may finally have done something right in the public’s eyes.
The agency’s appointed members have ruled that the process for people who want to change their TV, home phone, mobile or Internet service providers must be a whole lot easier. Once it has obtained the proper consent, the new provider will make all the service switch arrangements on behalf of the consumer.
‘Not bad, CRTC!’ applauded one advocacy group, congratulating the CRTC on a decision it sees as undermining big cable and telecom tactics.
(In my case, I’d be a whole lot happier if the CRTC had done this, like, three weeks ago!
I recently contacted one of the major phone providers in order to cancel my account. You’d think I had murdered my grandmother or something! They wanted explanations and justifications for my action. They offered all sorts of other services if only I would stay. Eventually, they promised to let me go if I would kindly return all materials in a soon- to-be-provided mailing kit. After my second call to the company to remind them to send it, well, I think I am free now!)
Under the new rules, customers no longer have to notify the current provider that they plan to switch to a competitor, but you can let them know if you want to.
A single call to the competing company will be sufficient to switch providers, the CRTC said.
The new guidelines released by the CRTC also will require companies like Bell, Rogers, TELUS, Shaw and others to switch customer accounts within two days when a customer opts to leave for a competitor’s services.
That’s been the case with phone services for a while, but now the two-day limit aims to cut the red tape for customers trying to switch from one TV or Internet provider to another, as well.
There’s also a 2 1/2-hour limit for mobile companies to transfer your account to another provider once you tell them that’s your intention.
Now, you as a customer are still responsible for all termination fees, penalties and other costs associated with breaking any contract you have with a service provider.
(The so-called ‘early cancellation fee’ charged by many providers if service is terminated for any reason, can be quite substantial. At FIDO, for example, it can go ‘to a max of $300’. A ‘data early cancellation fee’ can reach $100, depending on the contact and the provider. On the other hand, some companies offer a ‘port-in’ credit when you bring in your old number and open up a new account. WIND, for example, has a $100 promotion, but good only up until the end of March.)
In any case, the CRTC says, those contracts must abide by customer transfer and service cancellation requests from a prospective new service provider acting on behalf of a customer (so you can get out without having to explain yourself).
It’s called “churn” in the telecom business. The seemingly continual movement of customers in and out of different services plans, and – heaven forbid – out of one company’s arms and into another’s.
It’s been estimated that a telecom company spends like $200 bucks in ‘acquisition’ costs for each new customer – advertising, marketing, promotion, sales and fulfillment, etc.
Keeping an existing customer is a lot cheaper.
And if a customer does leave, that’s not just $200 bucks down the drain, it’s all the potential revenue from that customer.
So telecoms hate churn. There are industry tactics, strategies, conferences and consultants whose main goal is to reduce churn.
Of the top ten or so ways a telecom company has to keep a customer, offering special deals and new price points can be an enticement to stay. So, too, dangling bundled services (the so-called triple or quad play, with landline, mobile, Internet and cable TV services in the mix) and touting ‘better, faster, higher’ services and speeds.
Suddenly you’re offered lower rates, higher caps, maybe a free month or two of service, maybe a new car!
It’s a highly competitive time in the industry now, with new companies, new services, and new technologies being offered.
But customer contact strategies for on-going relationship building – making ‘touches’ as the industry calls customer contacts – are still one of the most successful ways to reduce churn.
Of course, there are also highly technical remedies for churn, such as complex predictive algorithms and real time analysis tools that track usage habits in real-time, so as to anticipate new service needs or to predict potential customer changes or defections!
Along those lines, the CRTC will put in place safeguards that prevent a company from sharing confidential customer information during the transfer process.
It’s the concern for consumers contained in the new telecom ruling that has some CRTC critics changing their tune – slowly, hesitantly, cautiously.
As John Lawford, lawyer and research analyst the Public Interest Advocacy Centre (PIAC) in Ottawa, said recently, “Customer service, unfortunately, on its own, is a problem with cellphone companies in particular. They have a lot of front line staff to deflect questions, to tell people that they’re wrong, and that they need to pay these bills. It’s a business model predicated on disrespect really.”
Harsh words, perhaps.
But whatever the business model, it’s a successful one – the Canadian wireless association reports its industry generated nearly $17 billion dollars in revenue in 2009.
submitted by Lee Rickwood
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So, what’s your tech?
Do you have a horror story about switching cell phone companies?
Do you think the new CRTC rules would have helped? Are these new rules good for consumers? For the industry?
Should the agency, as has been called for, be eliminated?
You can always leave a comment here at whatsyourtech.ca, or you can tell the CRTC!
The CRTC has launched another public consultation, and the government agency is calling for submissions about consumer protection and telecom service provision.
You can fax, write or fill out an online form to tell them your thoughts by April 18.
- More of Lee Rickwood’s CRTC coverage