Mercury gets the service message

Marketing: if the customer is king, One 2 One aims to find out what each client really wants as it seeks an edge in the mobile phone free-for-all

MERCURY One 2 One's latest marketing offensive, launched with a pounds 10m advertising campaign from Bartle Bogle Hegarty last month, was the result not of increased competition in the mobile phones market but a review of the company's approach to customer service. It is an indication that the days when businesses could simply aspire to "better service" are numbered.

Customer service has become an integral part of marketing. Yet all too often those who claim that the customer is king do not manage their customer transactions effectively. This is partly because of a traditional approach that applies best-practice principles to company-customer relationships - at best an imprecise and misleading tool, reckons Chris Green, the manager at Coba Group, which advised Mercury on its recent changes.

"Nineties businesses are caught in a dilemma," he explains. "They must reduce operating costs but at the same time improve customer service, which invariably requires extra investment." All too often the two are seen as in conflict. "Traditionally, companies look to cut costs and minimise subsequent damage to the customer." However, this need not be so. Closer assessment of customer transactions enables the benefits of each one to be clearly assessed - and priced.

This is just what Coba, a management consultant, did on behalf of Mercury One 2 One, identifying more than 80 separate transactions between customer and consumer. Each was categorised into different types: those that benefited both company and consumer; those that benefited only the company or only the consumer; those that perceived "a negative" by either.

For Mercury One 2 One this has meant re-evaluating the benefits of its previous free-calls offers against the use and value placed on them by various types of customer. It has led to the abandonment of One 2 One's PersonalCall, StandardCall and BusinessCall tariff system, replaced by Bronze, Silver and Gold Service, which allow customers degrees of choice on a range of options. The company has subsequently cut the cost to customers of voice-mail retrieval - valuable to both parties as it reduces "churn", the practice of not renewing a subscription.

The strategy is also shaping a new approach to selling. Registration was previously a "back office function", explains David Harding, the customer services director of Mercury One 2 One. Customers' details were processed behind the scenes. "We now want to move all of this closer to point of sale, with a credit discussion and clear explanation of respective expectations and methods of payment, while still allowing them to walk out of the shop with their mobile phone that same day."

Mr Green explains: "Differentiating types of service is critical if a company is to manage them effectively and build customer loyalty over the longer term." Those that are negative for the company yet positive for the customer can be picked out and charged for accordingly. In contrast, transactions that benefit neither can be axed.

Customer expectations are a critical factor for Mercury One 2 One which, Mr Harding concedes, misjudged the market when it launched two years ago. The mobile phones business then was based on business users.

Mercury set out to target the mass market but underestimated mass-market ignorance about the product and how best to use it, he says.

The company now recognises the need to increase its level of service but cannot raise prices, as it positions itself as offering the lowest running costs of any mobile phone service currently available. "Statements like 'the customer is king' help no one - it's intangible and aspirational," Mr Harding says.

Historically, relationships with customers were more to do with sales than service. Increasingly, in all businesses, especially those which are commodity-based, such as telephony, service is the key distinguishing factor. That is why Mr Harding is now undertaking an employee communications campaign to persuade all Mercury One 2 One staff to view each customer transaction, and its cost and value implications, in this way.

It may sound like common sense, but often companies fail to recognise the distinctions between different types of customer service, says Rick Peel, the managing director of Coba. Coba developed its blueprint, the "Coba Matrix", for Mercury One 2 One, but the same type of strategy could be applied to many other businesses, from airlines to retail multiples, he says. It is now applying the matrix to a financial services group and an electricity company.

"It's beyond cost reduction," Mr Peel says. "It's about maximising the value of customer relationships - understanding what every element of a relationship with a customer does to that relationship by asking, 'What is their value?' and 'Are we adding to or subtracting from these?' "

Mr Green says: "Customers' expectations today are that prices will continue to come down while service gets better. Add to this the pressure of new technology and growing competition, and no one in any sector of business can afford to be complacent: these issues must be addressed."

Start your day with The Independent, sign up for daily news emails
England's women celebrate after their 3rd place play-off win against Germany
Women's World CupFara Williams converts penalty to secure victory and bronze medals
Arts and Entertainment
Ricardo by Edward Sutcliffe, 2014
artPortraits of LA cricketers from notorious suburb go on display
newsHillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'