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NTP Losing Steam
It would seem that NTP is losing steam in its patent case against RIM.
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Call Center E-Learning
Here is an article I came across that talks about e-learning, call centers and service providers. I thought it was good and decided to pass it along. It will run in a future issue of Customer Interaction Solutions Magazine.
The issue of customer satisfaction is important and when you think of the Vonage IPO you realize that customer churn is a major factor in the success of going public, being sold or doing business in general.
As you may have read in my most recent Vonage blog, 11% of new Vonage customers come from referrals. Anything a service provider can do to increase customer satisfaction rates is important. You may say that high levels of customer satisfaction are indeed crucial to the success of any business. Enjoy:
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Using E-learning in the
By Melanie Stoll
Once a communications provider – wireline or wireless -- wins a consumer, it must continuously deliver rich service experiences to keep that customer. The single most common point of contact: the call center. 92% of customer transactions flow through the call center at a cost of $8-$10 per call. 85% of incremental revenues are initiated through customer calls[1]. And studies have shown that a customer who has a rich experience while having an issue resolved is more loyal than a customer that has had no service problems.[2] Clearly the call center, at the forefront of the provider-subscriber relationship, is critical to driving business objectives: customer retention and lifetime value. With millions of subscribers to serve and support, telecommunications companies must ensure that every center transaction is as efficient, productive and cost-effective as possible.
The most menacing problems in the call center are related to average call handling time (ACHT) and first call resolution (FCR) rates-the former being too high, the latter being too low, and the result being poor customer satisfaction which in turn contributes to churn and increased costs per subscriber. Where efficient, productive, high-quality customer service creates satisfied loyal users who buy more; poor customer service creates a vicious cycle of frustration, costly transactions, and the eventual customer churn. According to a 2003 J.D. Power & Associates study, the percentage of wireless subscribers who said they were likely to switch nearly quadrupled among those subscribers who rated their carriers customer care below average[3]. In a separate study of approximately 20,000 complaints against
The primary culprits in the customer service crisis: complexity and insufficient agent training. Agents are dealing with a wide, ever-changing variety of technical products as well as incredibly complex systems that manage customer data. It just takes longer to get things done…especially if you have not received adequate training on how to navigate through the system. This repeatedly puts agents in high-pressure situations in which they ultimately fail to solve problems. It’s no wonder that subscribers don’t feel loved, which explains high agent turnover rates in the first year. Consequently, critical customer transactions are left to a constantly changing workforce that collectively possesses very little product knowledge or call center expertise.
What can telecommunications operators do about this? Industry research has shown that telcos can greatly improve call center efficiency, employee success and esteem, and costs by implementing e-learning programs that rapidly get call center agents the skills and information they need to operate complex systems, stay up to date with the myriad technical products and services they support, and politely and consistently solve problems. By keeping call center agents in the loop, Telcos can realize the improved customer loyalty and lifetime revenues they desperately need to survive in an increasingly competitive industry.
Employee training isn’t a new concept so why haven’t we seen more success in the telecommunications industry? Rapidity. Where training programs have lacked in the past is in sheer speed. Telcos can’t afford to wait. Technology and offerings change too fast and customer attention spans are too short. Traditional training solutions and learning management systems can’t keep up. Learning has to happen at the speed of business-responding to change quickly, effectively and comprehensively.
Enter e-learning. E-learning allows corporations to deliver faster, contextual, and cost-effective learning-whenever and wherever it is needed.[5] Network delivery makes it easy to roll out updated knowledge and track who has and hasn’t reviewed it. Centrally archived content can be updated immediately and made current for all users. Agents can use quite call times to participate in self-paced training at their workstations to stay abreast of new offerings and develop skills for career advancement.[6] Newly learned skills can be put to practice immediately-reinforcing learning. And stakeholders get feedback on learner participation and knowledge retention.
So how do we successfully exploit these benefits? Here’s a quick hit list for those looking to cut to the chase with rapid e-learning for the call center.
Enable individual contributors at any skill level to develop content
Developing compelling content does not have to be complicated. To shorten the process of getting training information from the people who possess it to those who need it, you need to leverage familiar tools and paradigms. A 2003 study[7] of e-learning professionals found that PowerPoint was the second most frequently used tool for creating e-learning content. Why? It’s practically ubiquitous, familiar to nearly everyone, and quick and easy to use. Virtually anyone can get up to speed quickly. So, unless you have on demand access to instructional designers, web developers, and IT staff supporting a full-blown learning management system, keep it simple by leveraging readily available skill sets and familiar tools to create content fast.
Incorporate rich content to accelerate and enhance knowledge retention
Numerous usability studies have shown that multimedia presentations deliver maximum knowledge in minimum time while achieving the highest retention and recall rates. Used in conjunction with readily available and easy-to-use content authoring tools, a familiar medium like PowerPoint can be readily transformed from boring text and bullets to engaging learning courseware complete with audio narration, graphics, quizzes, animations and simulations. These features are especially effective when the subject matter is complex or technical (such as communications technologies and service pricing schemes), and when your training goals stretch beyond simply broadcasting information to learning new skills (such as how to find and review a subscriber’s call history) and achieving certifications. But don’t over-design: Content should be user friendly and intuitive to navigate, not intimidating and frustrating.
Make learning content accessible
The value and impact of rapid training dissolve instantly when learners spend more than five minutes attempting to join or log in to a training session. Training content should be readily accessible regardless of browser, platform or operating system. Find out what’s required on the learner’s end to participate. Do they simply click on a URL or must a client be installed? Which platforms, browsers and operating systems are supported? Factors such as client size and interoperability limitations can significantly impact how quickly and broadly rapid training initiatives are adopted and accepted by learners, managers and executives.
Measure and tie achievements to the business
Only by measuring can you justify the e-learning investment by tying it to achievement of learning objectives such as new product competency and reduced training costs. The online aspect of e-learning makes it easy to track learner participation and performance, and report these metrics to key stakeholders in a timely manner. But to tie e-learning investment and achievement to all-important business goals, such as customer satisfaction and increased sales, it’s important to establish metrics and consistently measure before and after the e-learning initiative is implemented.[8] Short-term value such as training cost reductions can be measured as a one-off, but to illustrate long term and recurring value and encourage ongoing investment requires a little more planning and commitment.
[1]Automated Self-Service Comes to Telcos, The McKinsey Quarterly, Web exclusive, February 2005
[2] Achieving First Call Resolution, The Ascent Group, Inc., 2003
[3] J.D. Power & Associates Reports: Wireless Customer Switching Intent is Nearly Four Time Higher Among Users Who Rate their Services Provider Below Average in Customer Care, August 28, 2003
[4]
[5] Metadata in Corporate E-Learning, The Seybold Report, October 20, 2004
[6] Justify e-Learning Investments in Three Phases, Gartner Research, October 13, 2005
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IMS Forum News
I recently wrote about the name change at the IMS Forum and followed up with an interview with IMS Forum founder Michael Khalilian. The momentum is indeed building in this association and the market as I just learned that Convedia will be a founding member of the IMS Forum and moreover Peter Briscoe from Convedia will be named to the board of this leading industry association.
Certainly this is great news for the IMS Forum, Convedia and the IMS market in general!
By the way, I just did a search on TMCnet and found that Sonus is also a founding member.
Here is a recent interview I conducted with Sonus CEO Hassan Ahmed on IMS and other topics. This interview is also going to appear in the first issue of IMS Magazine which is mailing soon.
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Ferrari Enzo Destroyed
Today is a sad day. A Ferrari Enzo was destroyed by a driver going 120 miles per hour in
A Ferrari is a terrible thing to waste. :(
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Vonage IPO Analysis
Here is my March 2006 Publisher’s Outlook in Internet Telephony Magazine. This is a follow up to my last entry on the Vonage IPO.
If you’ve been following INTERNET TELEPHONY Magazine for a while, you have probably read how challenging it was to start this publication. The challenge wasn’t financial, mind you, but psychological. In 1997 when I attended Comdex and told many of the exhibitors about the new magazine title INTERNET TELEPHONY, I was more or less ridiculed. Of course, I believed in my heart that IP telephony was the future of telecom. It just seemed obvious to me at the time. Others, of course, couldn’t shake the ham radio perception of the technology.
I have learned since that just because something will obviously happen, it doesn’t mean it will happen the way you think it will or when you think it will. VoIP has absolutely revolutionized telecom and at the same time took a tired and old industry with small amounts of innovation and turned it upside down and inside out.
For example, just look at how Skype - a company that gives away free software - has become a telephone company overnight. Imagine having tens of millions of users so quickly and with miniscule acquisition cost per subscriber. Skype is a phone company. In 1997, if I had even suggested such a thing was possible, I would have been laughed out of Comdex for sure. And yet, it happened. More incredibly, other companies, such as VocalTec, Dialpad, and Microsoft, all had a business model similar enough to Skype that they could have been Skype. Just as many companies were dancing around Google’s business model before they came onto the scene, Skype really showed us how you become a phone company serving tens of millions with not billions of investment, but instead, mere millions.
And yet, communications and VoIP, in particular, has not led the industry up a smooth and steady path. We are now seeing the third ramp in interest in IP telephony. This time, however, companies like Skype have sold for over two billion dollars and there is so much real purchasing taking place in the VoIP market that our future looks brighter than ever.
Perhaps having lived through “the bubble” has made us more sober. The post-bubble mentality implores us to look at things more carefully and to analyze them: Not just the positives but the negatives as well. Perhaps with some analysis we can guide the VoIP market ever upward ensuring the technology continues to help billions of people and make corporations more productive. And of course in the process, help lots of companies make money.
Vonage - God bless them and Jeffrey Citron in particular - was responsible for educating the market about VoIP and what it can do. They have managed one of the best marketing campaigns of any company in recent memory and, in so doing, they woke up business customers and their competition as well. Vonage, however, has been spending on a pace not seen for a startup since Pets.com. Many bloggers and people at industry conferences have told me Vonage is spending too much money and can’t have a sustainable business model unless they change their strategy.
Others told me that that Vonage was going through customers at a rapid rate and their churn was in double digits. Negative rumor after rumor circulated throughout the Internet as well.
But recently Vonage put an end to many of the rumors by filing to go public. The company is growing so rapidly and has taken in so much capital that the success (or failure) of its IPO is important for the entire industry.
In reality, it shouldn’t be this way, as Vonage is serving but a single sector of the market - consumers. The service provider and enterprise markets will spend far more on VoIP technology and services in the short term. Still, Vonage has attracted lots of attention and, indeed, its performance will affect the industry.
Here is an overview and some analysis on the S-1 documents filed by the company when announcing they will go public. I have done my best to not bore you here but rather instruct you on the potential of Vonage to do well and the hurdles the company faces.
Vonage has 95% of their lines in the
Of course, this spending ate into profits and revenues - although growing spectacularly - cannot mask the fact that losses are growing as well. Revenues were $18.7 million in 2003, $79.7 million in 2004, and $174.0 million for the nine months ended September 30, 2005. From the period of inception through September 30, 2005, the cumulative net loss was $310.0 million. The company’s net loss for the nine months ended September 30, 2005 was $189.6 million. During the same nine-month period, marketing expenses were $176.3 million.
Vonage goes on to talk about strengths such as a number one market position in broadband telephony. They even point to market research stating that Vonage is synonymous with the word VoIP in the minds of many consumers.
Another important point the company makes is that their churn has only been 2.11 percent for the first nine months of 2005. More amazingly, 13 percent of overall net subscriber line additions resulted from customer referrals!
Future Strategy
In order to grow, the company will roll out new services and work with chip and equipment providers to come out with unique products and services. In addition, the company will improve customer service, expand distribution, and enter new geographic markets.
Risk Factors
Vonage points out that it will continue to focus on market share first at the expense of profits. This could continue racking up losses for the foreseeable future. Other risks are from competitors that could come up with dual-mode phones using VoIP and, thus, make Vonage unnecessary.
Still other risks come from competing with cable companies and LECs that can bundle services and even offer telephony at a loss. In addition, these other companies might offer superior service levels or some other features that Vonage does not offer.
There is also competition from Internet companies such as AOL, Google, and Yahoo!, who, as the company says, could push prices lower.
E-911
There is also talk of potential problems with E-911 service and how the company may not be able to deliver emergency calls for some reason. They may also fail to deliver 911 calls to the right PSAP in the case of someone calling from a portable client such as a softphone or WiFi telephony device. In addition they may not be able to comply with the FCC and will subsequently be fined or potentially not be allowed to offer service.
Here is a paragraph on this topic lifted directly from the document itself:
Our ability to provide our service is dependent upon third-party facilities and equipment, the failure of which could cause delays or interruptions of our service, damage our reputation, cause us to lose customers and limit our growth.
Our success depends on our ability to provide quality and reliable service, which is in part dependent upon the proper functioning of facilities and equipment owned and operated by third parties and is, therefore, beyond our control. Unlike traditional wireline telephone service or wireless service, our service requires our customers to have an operative broadband Internet connection and an electrical power supply, which are provided by the customer’s Internet service provider and electric utility company, respectively, and not by us. The quality of some broadband Internet connections may be too poor for customers to use our services properly. In addition, if there is any interruption to a customer’s broadband Internet service or electrical power supply, that customer will be unable to make or receive calls, including emergency calls, using our service. We also outsource several of our network functions to third-party providers. For example, we outsource the maintenance of our regional data connection points, which are the facilities at which our network interconnects with the public switched telephone network. If our third-party service providers fail to maintain these facilities properly, or fail to respond quickly to problems, our customers may experience service interruptions. Our customers have experienced such interruptions in the past and will experience interruptions in the future. In addition, our new E-911 service is currently dependent upon several third-party providers. Interruptions in service from these vendors could cause failures in our customers’ access to E-911 services. Interruptions in our service caused by third-party facilities have in the past caused and may in the future cause us to lose customers, or cause us to offer substantial customer credits, which could adversely affect our revenue and profitability. If interruptions adversely affect the perceived reliability of our service, we may have difficulty attracting new customers and our brand, reputation and growth will be negatively impacted.
Local number portability too was cited as a potential problem as porting a customer’s telephone number can take up to 20 days or more. Other potential challenges are having access to more capital or having access to capital at favorable rates.
In addition, the company cites the potential of regulation as a risk to the company, as they may be forced to leave markets or raise prices as a result of new regulations. The company also mentions that it may be forced to contribute to the Universal Service Fund, which, of course, would increase costs.
Where is the Money Going?
As you guessed, the money raised from this IPO will be used for marketing and further expansion. The company mentions it may use some of the proceeds for an acquisition as well.
Other notable facts are that revenue per subscriber has decreased over the past two years due to price decreases and is now $26.63 per month.
The Vonage IPO was thought to be a multi-billion dollar event and it turns out now that it will only be worth $250 millions dollars. The reason for this lower amount is primarily due to the market share at all costs attitude. I am concerned that this attitude will generate many impatient investors who will push the stock to very low levels. Of course, if Vonage can’t pull off financing their operations for some reason, they can simply cut spending on marketing and make instant profit. On the other hand, if they can get the financing they need, at some point they could become a worldwide telecom giant.
Still, I grow concerned that the rest of the VoIP industry will be judged by what Vonage does or doesn’t do. The company certainly represents a sector of the VoIP market - but not all of it. Furthermore their business model sucks up much more money than that of, say Packet8, who is forming partnerships with companies around the world and allowing others to share marketing costs as well as rewards.
For those of you that remember when the VoIP industry was full of doom and gloom (circa summer of 2003), who would have thought then that we would hear the words VoIP IPO again? Who would have thought that the business would be where it is today? These are indeed exciting times and I wish Vonage a spectacular IPO that exceeds expectations.
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Another Net Neutrality Article
There isn’t too much that is new in this Net Neutrality article but it does give a good summary of what is happening and assembles some good quotes in a single place so you can see what high profile people are saying about the matter.
If advocates of an open Internet have reason to be concerned it is because of comments such as the following from Bob Goodlatte a Virginia Republican, “Such a law could also discourage broadband providers from improving their networks.” This comment was in reference to a new Net Neutrality law.
By this very same resonating , broadband providers could easily say that Google and other content providers are causing undo levels of network congestion and subsequently not allow their customers to access Google. They could point to the fact that consumers spend 30% of their time on Google and subsequently this is a tremendous burden on their systems.
One has to wonder why consumers are paying for DSL or cable modem service if this amount of money doesn’t not cover the cost of providing service. Is this whacky or what? The cable and DSL companies could price their service any way they want and they decided to price it in such a way that it doesn’t cover their costs and now they have to go after content providers?
The whole situation seems out of whack and lawmakers who buy such arguments should question the motives of underpricing broadband service so they can extort money form content providers.
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