TORONTO – The telecommunications industry isn’t known for having great customer service, but it’s got to do better in a world where Amazon and others have raised the bar for everybody, Rogers chief executive Joe Natale said Friday.
“I think the industry has been too narrow in the definition of customer service,” Natale said after Rogers Communications Inc. held its annual shareholders meeting in Toronto.
Coincidentally, the meeting was held almost exactly a year after Natale — a former CEO at Telus Corp. — took over the top management job at Rogers.
“I’m trying to create a culture of absolute continuous improvement,” Natale said in an interview. “It’s more of a cultural revolution than just a set of processes to fix.”
He acknowledged that Rogers — which typically is the target of about 10 per cent of all cases processed by the CCTS, Canada’s industry-funded complaint resolution body for telecommuniations — has lots of room for improvement.
But he also said Rogers has laid the foundation for improving its customer service by instituting a policy that links half of every employee’s annual bonus to customer-relevant performance metrics.
“Unfortunately, people on the front line are often left with dealing with the complexity and all the things that have gone wrong, all the way up the chain in middle management and product areas and the like.”
But Natale said that the people defining products, deciding on store merchandising, setting accounting and legal policies and providing customer information have to feel as accountable to the customer as the person answering the phone.
“It’s a team sport,” he said.
During the shareholders meeting at Rogers headquarters, Natale said “the bar is constantly rising. . . . And global players like Amazon set the standard.”
Natale wouldn’t comment on Shaw Communications Inc.’s plan to create a more app-based approach for receiving and processing customer orders, as well as a greater emphasis on customer-installed equipment delivered to their home.
But Rogers believes its value to customers will include delivering and setting up its new generation of home entertainment — called Ignite TV — when it begins to roll it out later this year.
“Because the goal is not just about TV. The goal is to create a platform for the smart home, for the connected home.”
“If the customer had all the knowledge and insight to do it themselves, then they wouldn’t need us.”
In fact, Rogers and its peers in the cable industry are betting they can halt and reverse a years-long erosion of their television customer base to traditional rivals in the telephone industry and new competitors such as Netflix, the leading over-the-top service in Canada.
Convergence Research president Brahm Eiley said in an interview Friday that the success of Netflix, Amazon Prime and other over-the-top services has been their “value proposition” — the balance of price and performance that they offer.
“There’s a big differential between what you’re going to pay for Netflix and what you’re going to pay for Rogers or Comcast or Shaw or anybody else. The numbers just speak for themselves.”
Canadian revenue flowing to over-the-top services — including Netflix, Amazon, Bell’s Crave TV — grew 29 per cent in 2017 to $872 million and it’s forecast rise to $1.11 billion for 2018, and $1.58 billion for 2020.
By 2020, Convergence estimates that there will be there will be more households subscribing to over-the-top services than to conventional TV services delivered by the cable and phone companies.
“It’s a long road ahead. Television’s not going to die tomorrow. Roger’s not going to stop offering TV access. But we’re now into something structural, something secular.”
Eiley said the Canadian network providers probably have better customer service than the over-the-top providers, but global players like Netflix and Amazon will be able to use their deep pockets to deliver a better value for consumers.
“It’s dollar and cents. It’s the value proposition.”
For the most part, analysts said the Rogers first-quarter results announced late Thursday were better than expected, but they remained wary of how sustainable they would be, given the level of competition that Rogers will face.
Companies in this story: (TSX:RCI.B)