Telstra sets new standards

Telstra is asking thousands of resellers and branded retail shops to sign on to tough new customer service standards, and is offering cash bonuses to stores that reach performance hurdles.

Telstra is asking thousands of resellers and branded retail shops to sign on to tough new customer service standards, and is offering cash bonuses to stores that reach performance hurdles.

The country's largest telecommunications carrier is rolling out a measure known as net promoter score, a closely watched industry figure that tracks customers' willingness to advocate for a brand. The new standards will apply to more than 2000 resellers and 350 Telstra-branded shops. Telstra will pay its retailers not only sales commissions but also for their customer service performance.

The move follows Telstra boss David Thodey repeatedly saying improving customer satisfaction was a core company strategy and that he wanted to create a "culture of advocacy".

"We've had a company-wide rollout of the net promoter system. Now NPS is both a system but also a cultural change and this has been one of the largest change programs that we've really ever undertaken in the country," Mr Thodey told an analyst briefing.

The telco has conducted more than 5 million customer surveys so far this year and is devising new sales strategy based on the data.

A Telstra franchisee told BusinessDay Mr Thodey was serious about customer services. The franchisee said he could get paid for getting a good customer service score without necessarily having to sell a product or sign the customer up to a Telstra contract.

The net promoter score to be rolled out by Telstra measures the ratio of advocates to detractors on a scale of one to 10. Telstra has been asking shops to score eight or above to be in positive territory.

"Sales incentives are used by many companies to remunerate and steer their sales and service channels to what's important," a Telstra spokesman said.

"While sales incentives are effective, alone they are not enough to make lasting change. That's why we use a range of metrics - including the net promoter score - to differentiate on service and become a leader in customer advocacy."

Telstra is not alone in the rush to improve customer services as the mobile phone industry enters a period of stagnation after years of breakneck growth. Deutsche Bank estimates mobile penetration has reached 135 per cent in Australia.

The bosses of Optus and Vodafone have also named customer service as top priorities.

Vodafone boss Bill Morrow recently went as far as revealing the company's own closely guarded net promoter system.

Mr Morrow said long-term customers who signed up before the carrier's well-publicised network failures problem rated the company at negative 11. But customers who signed up during or after the crisis gave Vodafone a worse score of negative 27. The industry average is between negative one and two.

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