TalkTalk transformation
CASE STUDY: TALKTALK
1 www.teamhgs.com
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
www.teamhgs.com 3
CASE STUDY: TALKTALK
Your next move
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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