O2 have launched giffgaff which is allegedly a Scottish word meaning mutual giving. There are lots of innovative elements to this MVNO-like proposition but one that all the mobile operators will be watching closely is: no call centres. Giffgaff is based on the premise that people on the web already help each other for nothing through blogs, forums, etc. so why not outsource support of your base to them and pay them a (tiny) fee for doing it. Its an interesting idea that could save a good deal of cost, but I can understand why O2 didn't do it with the parent brand!
The second is an application that used to be called SnapIn and is now called Nuance. This clever bit of code is installed by the handset manufacturers on behalf of the operator and intercepts calls to customer services and forces the customer into self help on the (mobile) web. This is currently being rolled out by Vodafone across many of its new handsets.
Calls in to customer care cost the operators money; an awful lot of money. Its also very difficult for the operator to put a value on the interaction with the customer unless they can sell them additional services or a contract extension while they are talking to them.
But customers value being able to talk to another person. Customers value being able to talk to a person to the extent that some brave organisations lead with a promise of real people in UK call centres.
So, a couple of years ago we were discussing the depth of relationships that operators have with their customers (especially business customers) and how that could be monetised.
I painted the picture of a business traveller sat in an airport lounge accessing his or her corporate email via mobile broadband. Something goes wrong so who do they call? Dell? Microsoft? Google? BAA? No. Unless they work for a big corporate organisation with an IT help desk they call their network provider.
The problem, of course, could be anywhere in the stack of hardware, applications, services and access but we seem to be genetically programmed to call the operator. The same goes for when things go wrong on the handset, a scenario that Apple have been delighted to make the most of, owning the relationship and the route to market but foisting the costs onto O2 (and now Orange and Vodafone).
So the operators are fighting back by working out ways of not talking to their customers.
On a spreadsheet I'm sure this looks great. The operator takes a load of costs out. Customers can "self care" on brilliantly intuitive care portals (sic!). Everyone is happy.
But that already weakening relationship finally gets severed. Customers have even less loyalty to their operator because the network now really is only a bit-pipe with nothing to differentiate one from the other except for the ever dwindling differences in coverage.
Is there "another way" as Nat West famously suggested? One that the operators can make pay?
I believe that there is, but its not straight forward. First Direct have made a brilliant success out of their (fabulous) customer service delivered through UK call centres. They have an online alternative and they gently point customers in that direction but always seem happy to talk. However they do limit themselves to high-value customers and don't go squandering the love on the hoi poloi! In addition, its all very well supporting everything from hardware to software but if everyone else in the eco-system is trousering the cost savings at the operator's expense then its not a scenario that can last forever (just like handset subsidies).
Maybe giffgaff will be a success and the market will naturally polarise into those who are willing to pay for a more personal service and those who aren't. Or maybe it will be along the lines of those who are technically savvy enough to be able to do without it and those who aren't. Either way I'm still firmly of the belief that there is value to be had out of looking after the technology stack if you can avoid others pushing their support costs on to you and you can find a customer who is willing to pay for it.
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