Being Mindful of Hardship

It has been a hard year for many. Perhaps it has also been hard for you. Some are bereaved, some have lost their livelihoods, some are terribly alone. In circumstances like these, it falls on those who are more fortunate to act with kindness. Whilst our line of work is often associated with cold calculations about money, please keep in mind that real people stand behind the numbers we review on a computer screen, and that some of them are struggling. Recent figures from Ofcom, the UK regulator, epitomizes what is happening worldwide. Their research found that over a million British households have “cut back what they spend on items such as food or clothes to pay for phone, internet or TV”. This is a time of need, but you are also in business, so how can you help whilst continuing to do your job to the best of your ability?

Maintain the Connections

There has been an increase in the number of customers disconnected for non-payment of their bills. This is true globally but figures from the UK illustrate what is happening more generally. UK disconnections actually fell during the early months of the pandemic, but have risen sharply since June. They are now well above typical levels for both fixed-line and mobile services.

Some customers will refuse to engage with you and must be disconnected to prevent them racking up unrealistic debts. However, you will not grow your revenue base by dispensing with existing customers when the whole market is shrinking. If you keep a customer connected you have a chance of receiving revenues from them when their lives turn around. In the meantime, be sure to look at the entire value of the customer as well as their payment history. For example, customers generate value from the calls they receive as well as the calls they dial.

The Right Price for Everyone

One of the biggest mistakes is to make decisions that are more profitable on a spreadsheet than in real life. It does not benefit your business to charge higher fees if the customer is unable to pay. Before you consider disconnecting a customer you should have already advised them to switch to a plan that is more affordable and better suited to their real needs.

Episode 2 of the new season of RAG TV will see me interviewing two experts from Symmetry Solutions on the growing popularity of Personalised Recommendation and Order (PRO) solutions that encourage customers to switch to the best tariff per their historic usage. The UK has been leaders in the adoption of PRO solutions, but Ofcom still observed that tariffs aimed at low income customers have been taken up by “relatively few customers” because they are not aware of them.

Selective Service Restrictions

Nudge non-paying customers in the right direction by taking away some, but not all of their services. For example, you can tweak network settings so indebted subscribers can continue to make voice calls that are within their allowance but are no longer able to access the internet. A similar approach involves switching off parts of the mobile phone’s functionality, as recently advocated by Trustonic CEO Dion Price in an article for Commsrisk. If somebody has acquired an expensive handset you have every reason to want to seek solutions that involve them continuing to pay it off over time.

See the Big Picture

Ofcom’s research makes bleak reading.

Nearly one in five households (19%) – around 4.7 million homes – struggle to afford their telecoms services…

Plenty of politicians have argued that access to communications services is as important as basic utilities. They have a point: the lack of a connection will affect a person’s job prospects, their mental health, and the education of their children. Comms providers are not running a charity, but nor can they ignore the difficulties of the population. Current subscribers may never return if they are mistreated after suffering bad luck. Many services have minimal marginal costs. Maintaining those kinds of services during a downturn may prove to be better business than the false economy of losing a customer today and trying to win them back with promotional gimmicks in future.

It has been a difficult year but your wise judgment will make it easier for some. Acting responsibly will help all of us to anticipate better times ahead.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.