Category Archives: Telstra

Is Telstra Australia’s Amazon? – Its Customer Centric Strategy is Paying Dividends

Making Customer Connections

While some may argue you cannot compare a telecommunications company with an online shopping mega star like Amazon, I beg to differ.

There is one core element both companies now share – their absolute commitment to being customer centric.

In 2009 when David Thodey took over as CEO of Australia’s largest telecommunications company, Telstra, he was asked what would differentiate his tenure from his predecessors. He said:

“I want to be an agent for the customer”.

It was a time when Australia’s highest profile company was being criticized on all fronts for its arrogance, poor customer service, unjustifiably high prices and monopolistic practices.

Thodey set about changing the culture at Telstra to a customer focused culture and invested heavily in defining and communicating internally a vision, values and strategy that had the customer at its center and customer service as its catch-cry. It included intense training of its 5,000 people leaders in Australia, India and the Philippines as well as new systems and processes that empowered customer facing staff to provide much better service to customers and solve their problems with least fuss. A new division was set up that enabled staff who heard of a friend’s problem at a barbeque to give them a direct line to a solution if they were having trouble getting it solved. Telstra embarked on a program to create advocacy with its customers and its staff. Use of the net promoter measurement system with daily feedback from thousands of customers fed to the areas in Telstra responsible was a trigger for focus on customers. Other customer feedback measures and progressive culture assessments have supported Telstra’s customer-centric journey.

Telstra: Improving Customer Advocacy

Now it is paying dividends. The company has posted seven successive half years of earnings growth to AUD$2.1 billion for this latest half – up 21% on last year. Dividends have been steady, but are now set to increase. Telstra is on a roll with its customer-centric strategy and stronger customer culture proving Thodey’s stance. Stock price is at an all-time high at around AUD$6.50 per share with steady and continuing growth up from around AUD$4.50 two years ago.

Telstra posts 22pc net profit rise

David Thodey is the first to say that Telstra still has some way to go. But his leadership of a strategy and culture in which the customer is at the center of decisions and service delivery is creating a highly sustainable profitable business.

If you want to see how it all began you will find it was originally initiated first in the Finance Group at Telstra and described in a case study about the CFO’s value service culture initiative. See Case Study Highlight: Telstra Transformation.

Telstra’s transformation story can also be found in “The Customer Culture Imperative: A Leader’s Guide to Driving Superior Performance”

3 reasons why customer centricity’s time has come

the_time_is_now The world of business has rapidly transformed over the past 15 years. From a world where businesses controlled supply, controlled the message and could dictate terms to customers to one where customers have a much louder and more influential voice.

While we have always been advocates of businesses that act in the best interests of their customers, it seems market forces are now compelling all businesses to behave this way.

So why do we believe 2015 is the year for Customer Centricity? 3 reasons.

1. Customer Feedback Systems are going enterprise wide.

Companies have been measuring customer satisfaction levels for many years. Often these surveys have been conducted once a year, presented and then forgotten about. This type of survey methodology is rapidly changing, becoming real time and supported by great technologies to get the right feedback to the right person at the right time. In fact technology is enabling enterprise wide feedback mechanism that were never previously viable.

While this is a great positive trend for companies that realize they must become more customer centric, it is not enough for these to remain only the domain of customer service or marketing.

Being customer centric is a way of doing business that is not only about sales, marketing and customer service. It involves every department understanding their role in creating a great customer experience. Many forward thinking CEOs recognize this fact and are working on transforming their organizations to meet this challenge.

2. Convergence of customer experience and employee experience.

Today there is a recognition that employee experience impacts customer experience. If employees are not given the opportunity and tools to change the way they work, the customer experience will suffer. Being customer centric means understanding that every interaction with customers allows them to form an impression, good, bad or indifferent. It truly requires everyone in an organization to be engaged in delivering great experiences.

The bottom line here is that you cannot create truly engaged customers without truly engaged and passionate employees.

3. Recognition that Customer Centricity is a Leadership Competency. 

Being customer centric, requires leadership that is customer centric. Leaders need to be engaged with customers first hand. Leaders need to immerse themselves in the customer’s environment and experience what customer’s experience. I wrote about Telstra’s (A $20billion telecommunications company) Executive team engaging in this practice previously here. We are seeing this become the norm in many other large businesses around the world.

There is also increasingly a realization that leaders of all disciplines need to develop their customer centric thinking and leadership competencies.

We were recently honoured that our Book, the Customer Culture Imperative  was nominated as one of the Top 20 and later short listed after a public voting period to the final 5 for the Marketing Book of the Year – 2015. Perhaps some further proof that Customer Centricity’s time has come!

The Customer Insight Lab of the Future

Uncovering customer insights

Telstra, Australia’s largest telecommunications company, like other large organizations has a powerful research, analytics and insights hub. Liz Moore, who heads that group in Telstra says

“You need deep seated curiosity to develop insights.”

So she has hired people with those characteristics and developed an operating model that links the data supplier with an “insight manager” and the stakeholder (decision-maker) to solve a particular customer problem and gain real insights into current and future customer needs.

This group provides insights from customer value analysis, churn analysis, market share changes, communication effectiveness of the company and its competitors’ marketing campaigns, financial modeling of key competitors as well as analysis of qualitative customer feedback.

Liz says “In research we have changed from the rear-view mirror to headlights” and with access to a panel of 15,000 consumers whose behavior is tracked, she can put together focus groups within a day of the request. Her group proactively shares analytics and insights on customers and competitors throughout the company using weekly bulletins. It also reacts to requests from decision-makers in the business to research, analyze and develop insights on particular customer and market situations.

Above all this group is action oriented. Liz says “We don’t build anything unless there is a pathway to execution and measurement.”

This really is a great model for the customer insight lab of the future. Rather that seeing this as an isolated research function, forward thinking companies are building a multi-disciplinary team of people focused on using deep customer insight to help move business forward.

Does your organisation know more about customers than your competitors?

The customer focused CFO

Congratulations to John Stanhope, recognized as this year’s CFO of the Year in Australia at the CFO Dealbook Awards for 2011 , an event sponsored by Australia’s professional accounting body, CPA Australia.

The CFO Awards recognize the achievements of the very best in Australian finance over the past 12 months.

There are a broad range of categories and specific criteria, with entries judged at a finalist and national winner level.

In John’s last year at Telstra it appears he is leaving on the top of his game. He has been instrumental in driving and leading positive customer focused cultural change inside the finance function. An initiative that has since been taken on by other parts of the business and has started to have an impact on customer perceptions of Telstra.

Telstra recently refined its efforts further with the creation of the Chief Customer Officer role and increased investments on improving service across the organization.

See more of John here in this video interview on the journey towards customer focus from a CFO’s perspective.

What legacy will you leave as CFO?