Empowered by Efficiency: Telefonica Increases Customer Satisfaction and Savings with Minitab

 
 

Handheld devices have transformed our daily lives. Tablets and smartphones with Internet access have become necessities for success, social networking is essential to maintaining relationships, and our increased accessibility through email spurs efficiency and productivity in the workplace.

As the importance of staying connected increases, so do our standards for mobile services. Ultimately, the quality improvement efforts of companies such as Telefonica Group—the world’s fifth largest telecommunication services provider—help us fulfill our own obligations.

When Movistar, Telefonica’s corporate brand in Argentina, evaluated its customer service process for mobile business, it revealed that the front line of representatives—the ones who first answer a customer’s call—had a low success rate for resolving callers’ issues. The resulting high rate of service call escalations was costing the company $7.5 million each year.

Movistar’s Lean Six Sigma project team set out to determine the causes of service call escalations, and used Minitab Statistical Software to analyze their data and identify a solution. Their efforts reduced off-line escalations by 59% and increased yearly savings by $2.9 million.

The Challenge

Improvements to Telefonica’s call center process increased front-line service resolutions and reduced off-line escalations by 59%. Data analysis with Minitab Statistical Software increased Telefonica’s yearly savings by $2.9 million as well as customer satisfaction.

Movistar offers three levels of assistance for mobile customers who call the company’s service center. At the first level, a front-line service representative answers the call and attempts to resolve the issue. If unable to resolve the issue, the front-line representative connects the call to a second-level customer service agent. This is called an “on-line” escalation. If second-level service cannot provide an acceptable solution, they send the call to the back office help desk, which is an “off-line” escalation.

If second-level help is unavailable, or the issue requires input from a specialized department, front-line service transfers the customer to management for assistance, an action called a “direct off-line” escalation.

The team used process maps, similar to the one above, to help visualize the customer service workflow and identify factors contributing to the high off-line escalation rate.

Every call escalation consumes additional resources and decreases customer satisfaction. Because calls sent to the back office--both directly from the front line and indirectly from the second level—must be transferred “off-line” from the main customer service phone line to management at the help desk, they involve more employees and longer wait times. These off-line escalations generate the greatest negative impact on Movistar’s revenue and efficiency.

With 12% of customer service calls being escalated to the back office, Movistar’s project team needed to evaluate the call center’s process and identify the root causes of these off-line escalations. The team sought to reduce the percentage of off-line escalations to 5% by increasing front-line resolutions on first contact—an objective that would increase both savings and customer satisfaction.

How Minitab Helped

The team first needed to use Movistar’s data to conduct root cause analysis.

They used a bar chart to highlight the departments responsible for the greatest number of escalations, helping them prioritize escalation issues according to their impact. With this analysis, they discovered that two departments accounted for 60% of monthly escalations.

Further evaluation identified 17 possible causes of escalation, which the team ranked by risk index—a value calculated using the number of occurrences, method of detection, and severity of escalation—in order to measure the impact of each root cause. The analysis eliminated several potential issues with minimal impact, and validated 12 contributing to high escalation rates with statistical tools including hypothesis tests and Pareto charts. Ultimately, the team’s ranking method identified the most critical escalations as those resulting from speech-impaired customers.

Once the team confirmed the root causes, they participated in workshops and brainstorming that generated hundreds of possible solutions. The team assessed each one’s potential benefits, and selected 8 for additional study—three of which were handled by other departments, and five that underwent pilot-testing and additional data analysis for validation purposes.

Pilot-testing of the proposed solutions yielded promising results. With the help of graphical tools such as control charts and boxplots, the team showed that implementing proposed solutions would generate the benefits they had suggested. For example, simplifying the cellular network diagnostic flow reduced the number of required steps from 36 to 11, resulting in the average number of escalations greatly improving.

The control chart above shows a reduction in the average number of escalations after unnecessary steps in the cellular network flow were eliminated. Streamlining this process lowered the rate of front-line escalations by 90% during the pilot test.

Rearranging the network flow made essential second-level service tools accessible to the front-line representatives. Their increased effectiveness minimized the need to forward customer calls.

A new photo system for unallocated payment claims further decreased escalations by eliminating errors caused by manual data entry. With the new system, customers sent a photo of their payment stub to a free number for processing by an integrated service desk. Payment photos reduced the resources required to correct such claims and increased customer satisfaction.

The boxplot above summarizes escalations due to unallocated payment claims, and reveals the improvement resulting from a new photo payment system.

Testing not only confirmed the process improvements achieved the desired results, but allowed the team to move forward with implementation. In addition to simplifying the cellular network diagnostic flow and using a new photo payment system, the team also modified procedures for providing solutions for system failure, developed a virtual classroom for IT training, changed online password criteria for customers, created data sheets for products and customer service procedures, and designed a measurement system for critical errors. The team then used Minitab to analyze data collected before and after the improvements, in order to verify their effectiveness.

Results

The project team achieved the targeted off-line escalation rate of 5%—a 59% reduction from the original 12% escalation rate—and met the expected 80% resolution rate for first contact. In addition, the on-line escalation rate fell from 28% to 16%, and the average service time decreased by 80 seconds, improving customer satisfaction.

The project’s yearly savings of $2.9 million exceeded the team’s expectations by $1.1 million—an increase they plan to sustain by monitoring key performance indicators with a specially- designed measurement and control system.

Monthly reports track off-line escalations, first contact resolution, cost of employees’ paid time, customer satisfaction, critical errors, and average handling time. These are checked against company goals, and the team is notified when deviations occur. To further ensure the changes are maintained, a specific contingency plan will be implemented for each deviation detected.

Movistar continues to empower its customers by maintaining a focus on process efficiency. Escalations have continued to decline since the project’s completion, and the team’s success encouraged Movistar to replicate some of the same solutions in its landline business operations.

 

ORGANIZATION

Telefonica Group

OVERVIEW

  • Fifth largest telecommunications providers in the world
  • Subsidiaries in 25 countries
  • Employs 285,000 worldwide
  • Owns the largest fixed-line operator in Argentina

CHALLENGE

Improve customer satisfaction and increase savings by reducing customer service call escalations

PRODUCTS USED

Minitab® Statistical Software

RESULTS

  • Reduced off-line escalation by 59%
  • Reduced on-line escalations by 48%
  • Saved $2.9 million per year
 

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