The Marketing Bureau

Specialist Marketing & Communications Resourecs



Vodafone Needs Greater Understanding

By Brian H Meredith
First Published in NZBusiness Magazine

The following is an extract from a story in the NZ Herald in mid-January:“Vodafone may lose around 100 permanent customer care staff, with plans to almost halve the size of its consumer mobile service team, extend the graveyard shift to 7.30am and increase outsourcing to a call centre in the Philippines".

The proposal, outlined in an internal document obtained by the Herald, is part of a restructuring expected to bring 200 to 250 job cuts.


The Story continued:

“The consultation document, provided to Vodafone customer service staff last week, said average revenue per customer was falling and the firm was forecasting a 2 per cent year-on-year revenue decline.

"As this pressure continues, we need to accelerate our plans to transform our costs and reduce our costs to serve, sell and deliver our products to customers," it said.

"Therefore we are going to be reducing our employment costs across the board."”

So, in simply terms, Vodafone New Zealand are losing customers and revenue so they are going to respond by cutting costs and reducing service levels and service quality.

Wow. That’s a no-brainer isn’t it – revenue is reduced so let’s cut costs.

Has it occurred to Vodafone, I wonder, that one major contributor to their customer and revenue reduction could be that their level of performance and service delivery is already below par?

Craig Young, chief executive of the Telecommunications Users Association of New Zealand, said he was always concerned when providers downsized in customer service.

"That's the one area that directly relates to users," he said. "But ... consumers will make a choice and if they end up getting bad service from one supplier then they've got plenty of other suppliers to go to."

Yes, Craig. That’s correct. Its not rocket science, eh?

Vodafone New Zealand reported a full-year loss of $27.9 million last year. And this in a market that is growing and becoming ever more innovative, creative and driven by new product & service development through technology. The opportunities are clearly significant but if Vodafone can’t even keep their existing customers, there is clearly no hope of them doing any of this.

My personal experience with Vodafone is pretty darn poor and I have heard from many others who have suffered similar experiences. The Customer Service response times, for example, are dreadful with 40 minute or longer waits to be answered being the norm and not the exception. When Vodafone first arrived in New Zealand their Customer Service performance was excellent. Indeed, amongst the best. And now it has reversed completely. And has been deteriorating for some time.

I wonder if I might, with all due humility (haha), offer Vodafone some advice, insight and guidance?

A business is a marketing organism. Everything that it thinks, says and does drives a marketing effect – good or bad and never neutral.

Customers are the only place the money comes from. Period.

In order for a business to benefit from these simple but vital realities, it must be market oriented. It must design everything that it is, says and does with the markets needs, wants and expectations, at the forefront of its mind.

It must never (ever) treat the customer with contempt (“Your call is important to us and we are going to keep you waiting for 45 minutes” – that’s contempt for the customer).

It must take its senior team from all departments to a twice yearly, day long, brainstorming session where the only question to be addressed is “What, that is impossible to do today, if it could be done, would fundamentally improve how we serve our customers

It must train all of its staff, at every level and in every department, to recognise and understand that they are, in reality, MMDs – Mini Marketing Directors and that everything that they think, say and do, directly or indirectly to customers, will have a marketing effect – good or bad but never neutral.

They must develop a Business Plan that is market orientated. Not shareholder orientated. Or operationally orientated. Or any other kind of orientation. Failure to orientate towards the market and to understand, connect with, build relationships with, and meet the needs and wants of, the market is the only way a business can achieve success. There is no other way.

They must never set out to attract the customers’ attention for just long enough to extract money from them. That’s not marketing. That’s mugging.

Vodafone clearly has a lot of work to do to turn its performance around, beginning with developing a real understanding of what creates, drives and delivers business success. And it clearly needs to grasp the reality that the wider concept of marketing is at the centre of the business universe and the business needs to be designed, structured and operated with that reality clearly in the forefront of their mind. Constantly.


Let us know your thoughts
Captcha Image