TalkTalk transformation

CASE STUDY: TALKTALK

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In July 2012 the UK telco giant, TalkTalk, agreed a deal that would see HGS take over its contact centre operation in Preston, Lancashire, and continue the work to make it a centre of excellence for customer retention. Today the centre is setting the gold standard by achieving retention rates of up to 92%. The deal is an example of a growing trend in contact centre outsourcing in which the contact centre’s physical and human infrastructure are transferred from the client to the outsourcer, acknowledging that the outsourcer will have the skills, processes and commitment to transform its performance.

For TalkTalk that transformational promise is being delivered. Not only have its retention rates soared,

but its costs have dramatically reduced. The transfer to HGS brought an immediate per-seat cost

saving and the two companies are now working together to achieve additional cost reductions and

service improvements by streamlining processes and improving agent skills.

“Asset re-allocation deals of this kind deliver a double benefit for the client,” explains HGS’ CEO for

UK and Europe, Charles Cooper-Driver. “In the first instance they translate the burden of fixed asset

cost into flexible operational expenditure. In the second they promise an ongoing transformation of

the contact centre’s performance. For TalkTalk we are driving revenue through retention and cross sell

activity, while seeking out the efficiencies that will bring costs down over time.”

Keeping the customer

When HGS took over TalkTalk’s operation in Preston’s historic Tulketh Mill, it transferred a number

of TalkTalk employees and then undertook a rapid recruitment programme to build the team to

over 300 by June 2013. That enlarged team now handles calls from customers who are thinking of

cancelling their contracts but, in a very large number of cases, are convinced to stay.

“Calls are typically of two types,” explains Les Blacker, Site Director for the Preston operation.

“The first are from customers who have taken out a contract with TalkTalk but are thinking about

cancelling before the service goes live. The second are ‘in life’ customers, who have been using

TalkTalk, perhaps for some time, but have decided they might want to leave.” HGS’ retention

performance for each of these two customer types differs. Over 90% of ‘in life’ customers are

retained along with a high percentage of ‘new’ customers. Importantly, however, HGS doesn’t

consider a retention attempt truly successful until the customer has remained with TalkTalk for 38

days after the initial decision to re-engage. “We need to be confident that the customer’s decision

to stay is a determined one,” says Les. Nearly 90% of ‘in life’ customers and a high proportion

of ‘new’ customers are still onboard 38 days after speaking with HGS. These performances are

significantly ahead of target and of save rates before the HGS takeover.

CASE STUDY: TALKTALK

The cost of retention, in terms of the discounts and benefits offered to secure the customer’s

business, has also reduced significantly under HGS’ tenure. “Not only are we holding on to more

customers, we are doing so at a better cost,” says Andrew Crozier, Retention Manager for TalkTalk.

“That means the strength of our offering is being compellingly described by HGS agents who have

excellent product knowledge based on strong training.”

Maximising the revenue

Not satisfied with simply keeping customers, HGS is working hard to increase their involvement

with TalkTalk and the revenue they generate. TalkTalk, already one of the UK’s largest broadband

and fixed line phone providers, now has the UK’s fastest growing new TV service, YouView. By

the end of March 2013 around 230,000 customers had taken YouView from TalkTalk and new

customers are now being added at the rate of around 12,000 per week. “Customers taking TV,

phone and broadband generate more revenue and are happier with TalkTalk, so they are more

likely to recommend services and less likely to churn,” says Andrew.

By offering additional, bundled services to the customers it works to retain, HGS is securing both

loyalty and security of tenure for TalkTalk.

“HGS has achieved very strong results and the fact that they have been achieved during a year

when they have been dramatically ramping up the operation is exceptional and a promise of great

things for the future,” says Andrew Crozier.

During this vital first year of operation, HGS has also supported the migration of customers from

Tiscali TV (acquired by TalkTalk in 2009) to TalkTalk’s new Plus TV service, which includes YouView

and phone services. Thousands decided to shift to TalkTalk Plus TV ensuring TalkTalk’s share of their

communication and entertainment expenditure.

Keeping the customer satisfied

The positive customer experience that is giving rise to increasing retention and revenue-per-

customer is also evidenced by rising customer satisfaction scores. Customer satisfaction is

measured via email and IVR surveys, which callers are invited to complete after every contact with

the centre. It asks, very precisely, for feedback about that particular interaction and the agent’s

success in dealing with their issue. Feedback for agents at Preston is high and ahead of target.

At the same time, first time resolution is rising. Believing that the speedy and accurate resolution

of customer issues is a key contributor to loyalty, TalkTalk measures first time resolution very

rigorously by looking at actual call reoccurrence. It does this by capturing the Caller Line Identifier

(CLI) for every incoming call and then monitoring for its recurrence over the next forty days. If a

second call is received from that CLI within a seven day period, it is assumed that the customer’s

initial issue was not resolved successfully. HGS has maintained consistently good CR7 (call repeat

within 7 days) results and its quality scores are ahead of target at 94%.

Better all the time

The premise behind asset re-allocation deals in contact centre outsourcing is that the provider has

the knowledge and expertise to deliver transformational change. HGS is fuelling positive change at

TalkTalk, not just in the contact centre, but beyond it.

HGS is using agent observation and analytics to identity the root causes of customer dissatisfaction

and feed them back to TalkTalk. “People call us to cancel their TalkTalk contract either because

they do not feel the company has met their expectations or because they are tempted to take

up an offer from a rival company in a very competitive market,” says Les Blacker. “Every day we

are talking directly to TalkTalk customers and the insights we gain can help improve products and

services as well as customer management in the contact centre.”

2 www.teamhgs.com

TalkTalk’s commitment: To be the UK’s best value for money provider of broadband, landline, TV and mobile services.

CASE STUDY: TALKTALK

Andrew Crozier, who spends at least half of his time in the HGS centre, is the conduit through

which that information and insight flows back into the TalkTalk organisation. In particular he values

HGS’ input to the development of retention strategies and approaches. “Nobody spends more

time talking to our customers than our contact centre agents. They understand what customers

want and what’s on offer from the competition. Developing and testing retention strategies in the

field makes us responsive to every shift in our fast moving industry.”

HGS is also determined to develop an agent body of experienced and committed advisors. HGS works

with a third party education and training provider to enroll every new recruit onto an apprenticeship

programme in contact centre operations. This leads to a nationally recognised qualification and

opportunities for even more advanced training. “We want our agents to feel they have opted for a

career with us rather than just taken a job,” says Les Blacker. “Helping them to build skills that will be

valuable to them in the marketplace builds employee engagement and boosts retention. Agents that

successfully negotiate their apprenticeship and have a degree qualification, can also choose to undertake

Six Sigma Lean training, a widely recognised operational improvement training that is recognised across

both service and manufacturing sectors.

Employee satisfaction scores are monitored regularly and are extremely high, while 80% of

employees say they would recommend the centre to family and friends as a great place to work.

Track record

TalkTalk’s decision to transfer a complete contact centre operation to HGS was supported by three

years of experience working with HGS’ contact centre in Chiswick, West London. “HGS had worked

for Tiscali for seven years when we acquired that business in 2009,” explains Andrew, “and played a

major role in migrating Tiscali’s customer base to new TalkTalk services.”

Nic McAllister, TalkTalk’s Head of Customer Retention at the time, knew the switch would be

complex. “Tiscali’s services were priced significantly below the market rate and their tariffs were

complex and variable. We needed to move Tiscali customers onto TalkTalk tariffs and standardised

pricing. We would be moving away from, literally, hundreds of pricing structures to just one.”

The vast majority of customers would see no increase in prices, but for a minority, there would be

an increase. TalkTalk worked closely with HGS to understand how customers might respond to the

retention packages on offer and to devise the best way to present them. In the end, the vast majority

of customers chose to re-contract with TalkTalk. “HGS exceeded the target we set for them by 9%,

says Nic, “and at a time when the broadband market in particular was at its most competitive.”

Clearly, HGS has proved its understanding of the telco market and its ability to hold on to

customers. Both companies recognise the importance of customer retention in a competitive

market. “What was once a numbers game has become a value game,” says HGS’ Les Blacker.

“Yesterday’s objective was to add customers rapidly. Today’s is to hold on to those you have and

maximise their value through cross and upselling.”

Given this pressing business imperative, creating a retention centre of excellence with a trusted

provider that had proven skills was a logical step for TalkTalk. The decision to hand over its contact

centre assets as part of the deal was entirely new. “By putting the contact centre in HGS’ hands we

have achieved an immediate step change in customer management capability, as well as a real and

sustainable reduction in cost, says Andrew Crozier. “What’s more, the responsibility for maintaining

a state-of-the-art operation – with all of the investment in technology and resources that implies –

now lies with HGS.”

This re-allocation of assets, combined with a commitment to transform TalkTalk’s contact centre

performance is, according to HGS CEO UK & Europe, Charles Cooper-Driver, a natural

next step in the evolution of outsourcing. “It brings fresh hope to organisations

struggling to keep pace with the investment in skills and technology needed to

meet customers’ growing demands for 24-hour multi-channel service.”

“Retaining customers and maximising their value is the biggest challenge any company faces. Over several years HGS has proved that they not only understand that challenge, but can address it with creativity and pragmatism.

Geoff Smyth, Consumer Operations Director,

TalkTalk

“Through the contact centre we’re hearing what some customers find frustrating or compelling and we can take action to position ourselves more powerfully in the marketplace.”

Andrew Crozier, Retention Manager, TalkTalkk

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CASE STUDY: TALKTALK

Your next move

Talk to us about how we can help you transform your performance and hold on to customers.

Contact us at:T: 44 (0)845 194 9295E: UK&Europesales@teamhgs.com

Visit our web site at: www.teamhgs.com

Or write to us at: 250 Gunnersbury Avenue, London, W4 5QB, UK© 2013 HGS

Results summary

• Retention rates of over 90%

• Significant reduction in cost-per-retained customer

• Strong cross and upsell success on retention calls

• High CR7 score indicating a strong ‘first time fix’

• 94% quality score

• Significant reduction in per annum seat cost generating sizeable annualised savings

• 80% of staff recommend centre as great place to work

• Exceeded the retention rate target by 9% during rebrand from Tiscali to TalkTalk

Key facts

• Providing customer retention services to TalkTalk and Tiscali UK since 2003

• Created a Retention Centre of Excellence in 2012 after taking over TalkTalk’s contact

centre and staff in Preston, Lancashire

• Transferred TalkTalk staff to its own employment

• Ramped the team to close to 300 advisors within a year

About TalkTalk

TalkTalk Telecom Group plc is one of the leading fixed line voice and broadband

telecommunications businesses in the UK. With 4 million broadband customers and over

230,000 TV customers, TalkTalk Group markets to residential customers through the

TalkTalk and AOL brands and to business customers under the TalkTalk Business brand.

TalkTalk’s network covers 95% of the UK population.

TalkTalk operates the largest fully unbundled network in the UK.

www.talktalk.co.uk