Carlos Graham Explains How Customer Service Is Driving Growth and Success at ETB

In Colombia, ETB is playing in few crowded markets. But the Bogotá-based telecom has seen growth of late, particularly in the capital, due to some promising investments.

Carlos Graham is ETB’s chief customer officer, and his area of the business that has been undergoing some dynamic change. While users will be more familiar with the new forward-facing product offerings and service upgrades, he has been spearheading a customer service overhaul that is leading to some impressive returns that can be measured in dollars and cents.

To detail some of the improvements, explain ETB’s current strategy for growth, and tease some upcoming product announcements looming for later in 2016, Graham recently sat down with Finance Colombia Executive Editor Loren Moss.

Carlos Graham, ETB’s chief customer officer

Finance Colombia: ETB is one of the major telecom carriers here in Colombia, and you have experienced tremendous growth over the past few years — especially over the past year. You have an impressive offering in Bogotá and have been rapidly capturing market share against some of the other bigger carriers. What has been the key to growth in this challenging environment?

Carlos Graham: Just to give you a few numbers based on our first quarter results of 2016, we’ve gained a little bit over 1 percentage point in market share in our TV business, we’ve gained around 0.3 percentage points in our basic, copper-line broadband, and we’ve gained 0.3 percentage points in our mobile business. All those increases in market share in TV and broadband are basically in Bogota, which is our “battleground,” so to speak.

On mobile, that figure is nationwide, and our offering is kind of new. In mobile, it’s like you’re the new kid on the block. Recently there was an article in the Dinero magazine in which there was an analysis of the presence of certain brands in social networks, and ETB was among the first five. This was influenced by our branding of our mobile services.

You’re going to see some very interesting surprises in the second half of the year, during which we’re going to re-vamp our mobile offering. So that has helped us push those market shares in those three product lines. It’s a combination of customer service and actual product experience.

As far as TV is concerned, our offering — our IPTV and real broadband — has received a very attractive uptake from customers. The product is great. I mean, nobody else offers the quality of broadband that we provide or the TV experience. It’s pushing a lot of the product. In Colombia, still, this type of TV experience is something new compared to in other countries. And our offering is very attractive, not only as far as the quality of the product is concerned, but also the pricing.

In broadband, our copper-line broadband is kind of the first. We are seeing a rise in market share, primarily due to improvements in our customer service as far as broadband customers, and mainly copper-line customers, are concerned. For the first time we’re seeing a reduction in churn from our copper-line.

From the close of July, as far as churn is concerned, we’ve reduced churn by maybe 3% in basic copper-line customers. But most importantly, we’ve reduced our customers’ intentions to churn by 46%. Even though our retention rate has pretty much stayed the same, that’s what we see.

Finance Colombia: Fascinating. In a business like telecom, where you have a choice between service providers, it’s going to come down to: Why do people churn, why do people leave? Sometimes it’s cost, but a lot of times people get angry. They get angry because they’ve had a bad experience with an outage or they’ve had a bad experience calling for service.

That has been less of a factor in markets like Colombia but it seems to be becoming more of a factor as more of the population gets used to doing things online and more of the population “becomes banked” and actually has the means to go and pay bills online. How have you made customer support and customer service more robust to help to reduce that churn?

Carlos Graham: I will first share some figures. In the first semester of 2015, in our revenue mix, our copper revenue was 61%. Now it’s 54%. Our fiber revenue, from our IPTV product or broadband, in the first semester of 2015 was 3%. Now that has gone up to 11%. And our mobile services in the first semester of 2015 was 3% and now it’s 8%. So we’re seeing a shift in the revenue mix, with more-sustainable revenue, so to speak.

As far as customer experience is concerned, towards the end of 2014, we realized that we were entering the market with some very interesting products — our fiber-optics product and our mobile product — but we still had something of a “to do” list left. That was customer experience and customer service. We wanted to make that a differentiator.

And it’s not only Colombia. It’s worldwide. Telcos’ customer service ranks at the bottom of the pile, so we figured that we could differentiate ourselves with a better customer service that will, in turn, reduce our churn, increase our retention rate, increase revenue, and increase market shares.

So we set up a program, which is called “Customer Service Excellence” in 2014. We analyzed what’s most important within our customers’ journey, in all our customer segments. Mobile was still a new area — a “green field” — at that particular moment. So we came up with quite a number of initiatives along the customer journey that needed to be fixed.

First we began focusing on fixing the basics to just be competent. We not only identified those issues, but we also designed a customer experience ecosystem in which we monitored the customer on a permanent basis, based on the voice of the customer. We used customer satisfaction, customer effort score, and net promotor score (NPS), and we correlated with our KPIs.

We did our homework. We did our customer journey. We identified where the “hurt points” are for the customers and we designed certain initiatives, and for residential there are nine initiatives. For corporate initiatives there were five big initiatives, such as making sure the installation process work, making sure that there were no network outages on a permanent basis, making sure that we would improve our customer service contact-points, and making sure that the billing was right. We call it the “Five I’s” to actually change the culture of the company more towards the customer: Inform, Inspire, Instruct, Involve, and Incentivize.

Finance Colombia: Are you seeing the benefits in terms of numbers and revenue figures?

Carlos Graham: We’re not doing this to improve only our customer satisfaction scores. There has to be a direct correlation with the finances of the company, either to reduce cost or increase revenue. So all of these initiatives, as far as the overall impact of these initiatives, two-thirds of those customer experience KPIs improved by more than 5% from the first semester of 2015 compared to the first semester of 2016. Our NPS score in the residential segment went from -14 to 4. Right now we’re at around 6. Our corporate NPS went from -10 to 18. Right now we’re more or less at the same level.

Customer service costs reduced. For all our residential customers, we reduced our customer service costs by 2%. And only for the copper-line customers, we reduced it by 14%. We have our fiber-optics customers increasing at a dramatic rate, and with our copper-line customers, we’re maintaining that base.

Sometimes it’s difficult to correlate these initiatives to revenue. But, for example, a lot of initiatives in the corporate segment were focused on our premium customers, which generate more than 50% of the revenue in the corporate segment. And that segment increased by 11%. So you could actually feel safe to say this initiative had a lot to do with that increase. And the ROI of the program, we’ve made some investments in this program as far as capital expenditures and OPEX expenditures are concerned, and during 2015 that ROI was like 622%.

Finance Colombia: ETB has made tremendous investments — spent a lot of money — but now it’s kind of a time of austerity, as your president has said publicly. So how do you continue to improve upon those metrics? How do you continue to grow market share and improve the customer experience — and make the customers more loyal — when you’re at the same time in this austerity mode?

Carlos Graham: Oh, that’s a huge task. That’s a huge challenge. We have three strategic priorities now, starting this year with the new executive team on board.

One of them is to be able to maximize that profitability of the investments that we have made, especially in fiber. Two is austerity. And three is customer service.

Those are our three pillars. And how do you improve customer service and at the same time reduce your costs? I think that a lot of customer service costs are attributed to bad service.

From infrastructure to branding, ETB is growing its presence throughout Bogotá. (Credit: Jared Wade)

Finance Colombia: Exactly. It costs more every time. If somebody has to call four or five times, not only are they mad — but you’ve got four times, five times the expense.

Carlos Graham: Exactly. So just to give you a few numbers, we project our customer service costs to decrease by 12% at the end of the year. And we expect our NPS to increase. So we have found a lot of opportunities within the channels. It’s the whole process, starting from the installation, the billing process, and the fact that people cannot resolve at the different channels.

So therefore we continue to get involved at the beginning of the chain to be able to find the root cause of why customers call us or why customers complain, and therefore reduce costs. So when they tell me, “Well, we don’t have any money,” I say “No, we have a lot of money — the thing is that there is a lot of waste within the money that we’re spending.” And I project in the next two years to reduce our call center costs by 20% because I’m going to reduce the amount of calls that customers make.

Finance Colombia: So ETB has this tremendous fiber and ITV offering here in metropolitan Bogotá. And you have 4G LTE mobile service nationwide. What’s the strategy from here? How do you continue to grow and differentiate yourself? Are there more products to be developed? Is there an expansion of your geographic footprint? How does the company continue to compete against the competition, some of which are much, much larger than ETB?

Carlos Graham: Well, right now it’s a very tough competition. During the second semester of the year you’re going to see a launch within our fiber-optic product proposition, a combination of product and pricing — better product and pricing combinations. And also on our mobile service you’re going to see, like I mentioned before, a very interesting type of product-type combinations: more products with more pricing options.

As far as increasing our fiber-optic portfolio, as far as coverage is concerned, we’re still going to concentrate on Bogotá. We still have a lot to cover in Bogotá, so we don’t have any plans on expanding as far as our fiber-optic network is concerned, and that’s part of our main focus in increasing the profitability of what we have already invested. It’s starting to pay off. We are looking into what other types of products we can put into that pipe of maybe 150 megas to provide at home. And we might have some interesting alternatives as far as OTT-type options are concerned.

So, yes, we see in the future maintaining our copper-line customers as happy as possible because they are the future of the rest of the products, and we have to still continue fixing the basics on those. And on the other products, there are some new things coming.

Finance Colombia: Great. I’ve already seen the innovation. Your plans are different. What you’re doing here in Bogotá is also very innovative. Very few cities in the world — I don’t care where the country is on its scale of development — have 150-megabyte fiber into the house. So, you know, I think that’s probably a bragging point for Bogotá.

Carlos Graham: Yes. Remember that we were born with kind of like a focus on data, 4G. Of course, that market has also taken us slowly also into the 3G-type market, but yes, our mobile-type proposition is to be completely different — completely different — from what the market is doing, and we would like to do that.

Our fiber-optic network is the fourth largest in Latin America, taking into account what they have in Mexico City and in Sao Paolo. We’re kind of neck-to-neck with one in Montevideo. But yes, as far as the offerings are concerned, this offering is probably one of the most aggressive.

This interview has been edited and condensed for clarity and length.