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Q&A: Big River Telephone Takes on the Incumbents |
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| Despite reports to the contrary, Tier 2 and 3 markets are still alive and well. Despite the mega-mergers, the rush to cut costs and consolidate assets has created voids in valuable markets that are underserved by the national incumbents. Big River Telephone, a rurally focused, facilities-based multi-service provider is seeing rapid growth as a result of its community focus and customer-centric approach to business. Big River had been a struggling long distance reseller before being acquired from large, incumbent providers by several former executives. Billing World & OSS Today sat down with these entrepreneurs—Kevin Cantwell, president, and Jerry Howe, CEO—to discuss their approach to customer service, how it is helping them to achieve exponential growth and how it distances them from their former employers, with whom they now compete. BWOT: Please tell Billing World’s readers about Big River. Where are your markets, what does your network look like, and who are your customers? Cantwell: Big River Telephone is a privately held facilities-based CLEC headquartered in Cape Girardeau, Missouri, which is about two hours south of St. Louis. Big River has been focused on rural communities, so our market space is Missouri, Illinois and Kentucky, with pending moves into Tennessee, Mississippi, Alabama, Arkansas, Kansas and Nebraska. We provide the full complement of telecommunication services, from single-line residential services to full corporate networks, and we have deployed products that utilize our own network, VoIP, and even broadband over power line services. We have network throughout southeastern Missouri, Illinois and Kentucky. Mostly it’s a fixed wireless radio network with licensed spectrum, and we have built out co-locations. We also have some fiber in the ground, but the backbone itself is reliable, high-capacity fixed wireless. It’s in the 5.8 GHz space where some of the LMDS spectrum is, but this stuff is tried-and-true technology. We use time division multiplexing on that network, and we can provision DS1s, DS3s and such across it. Our customers are about 70-to-30 business to residential. The businesses go anywhere from the largest hospitals in the region down to a two-line business. We don’t have a sweet spot where we say we are a four- or eight-line company. The big hospital can have 350 lines—we deliver anything from DS3 to dial-up Internet, VPNs and so forth. Our largest customer, a supermarket chain, might have maybe 100 locations. We’re under $20 million in revenue and under 20,000 lines. Currently, we’re averaging about 500 new lines per month. We talk about every Friday being bigger than the previous Friday, and we haven’t missed a Friday. We may have one line growth over the previous week or 50, but either way we want to be better than we were the previous week. Compare this to where Big River was. We (the current management team) acquired the company right at the tail end of 2001, and the company had no real strategic direction and was muddling through life. It had a previous life as a long distance reseller, but that business model had dried up and they didn’t know what to do. They didn’t have a strategy or an operational infrastructure to give them direction and a purpose in life. At that time they had about 3,000 lines, and their revenues were about $6 million a year. We came in and gave them some strategic direction with services we could provide like local, high-speed internet and a way to do it with a network, and the back-office capability to support those services as well. We have partnered with cable companies to provide hosted VoIP services to their customer base, and that has just started to manifest itself in some significant growth where we’ll approach 100,000 lines at the end of three years. We see an order of magnitude increase over the next three years, similar to what we’ve seen in the past few years. BWOT: What’s different, in your opinion, about the way Big River perceives and interacts with its customers, versus your experience with large incumbents? Howe: We create our systems, measure our performance and drive our culture all in a way that answers this question. It’s not scientific; it’s an essence and an art. It’s largely driven by our culture and comes from Kevin and myself, and bottom line it’s an understanding and respect for the customer and that they are why we are in business. If one of our customers has a problem, we have a problem. That willingness—from Kevin and myself to everyone in this organization, to engage the customer and understand issues, opportunities and needs that they have—is the fundamental difference. I was a CFO of a business unit at a large incumbent telephone company, and the only time I saw a customer was at a golf event, where usually our most friendly customers were invited, and there wasn’t a real strong dialogue. I didn’t understand their issues, and I wasn’t encouraged to, because it wasn’t a priority for that incumbent to have the whole organization attuned to customer needs. As Kevin and I lead Big River, we have delegated our customer-facing responsibilities to appropriate people in the organization, where our counterparts in big companies have relegated that responsibility. That’s the key differentiator. We’ll say to our staff, “We’ll go talk to that customer with you if you want,” whereas our counterparts in large incumbent telephone companies want nothing to do with it. It’s that approach of delegating rather relegating that is the principal difference in how we approach our customers. Cantwell: The customer is why we are in business, and thus the focus of all of our activities. The large incumbents focus on their networks and publicize through marketing events that their network is better than the next provider. We agree that networks need to be reliable, but the customer will make that decision in the end. Our network is as reliable as the incumbents. What we focus on is the customer experience. We look at the incumbents and see the customers are an inconvenience to them. Just look at them outsource their customers to third-party overseas call centers and manage their vendors to the lowest AWT [average work time] levels possible. We will never outsource our asset. We do not want to get a customer off the phone as fast as possible. We want the customer experience to be at a level that they were happy to call us. We have a customer satisfaction rating of 98.6 percent in an industry where 70 percent is great. We mailed our customer satisfaction survey to the entire customer base. We were very surprised on the hit rate that came back—it was over 20 percent, as opposed to 2 or 3 percent normally—and of that 20 percent we were rated very highly. The ones that came back negative were so few that we were able to go out and address their concerns individually. In some cases people filled out the survey wrong, in others we went out and worked through the problems. For those that gave us the lowest rating, I went out and saw them personally, and in other cases we had the account reps follow up with them. They were shocked that we read it, and even more so that we followed up on it—and could not believe an executive from Big River knocked on their doors to discuss their issues. BWOT: You mentioned that you each worked for an incumbent for years before Big River. What can you say about who you worked for and what you did that gave you this perspective on how customers are treated? Cantwell: We came from the big guys where you slap yourself on the back because 7 of 10 people like you. A 30 percent customer dissatisfaction level is unacceptable at Big River. Even the 1.4 percent that we have needs to be improved. I worked for AT&T, and Jerry came out of SBC. I think the big difference for Jerry and ourselves, this is our livelihood, our stuff. But when you work for a large company you don’t have personal ownership. In our case, all my customers have my home phone number and can call me 24 hours a day, 7 days a week. That’s why we’re in business. We’re not just here to work and get a pension and a gold watch. There are good people at the incumbents, but the bureaucracy just beats them down after time. They care but can’t do anything about it, and in the end just accept it as status quo. The cycle just keeps repeating itself. Howe: Kevin was a large account manager at AT&T and would travel across eastern Missouri calling on health care institutions to get their business for AT&T. Kevin would call on a hospital and drive down the road and see another business—say, a large distribution company—and could not call on that customer because they didn’t generate much revenue with AT&T. AT&T saw them as a small customer because they actually had most of their business with MCI. AT&T didn’t have a clue what the business did or what kind of communications needs it had. Kevin drove by and could see what they were doing. He could stop by and talk to them and could have won their business, but the rule was he couldn’t touch that business, they weren’t the right kind of customer for the sales channel he was in. It just didn’t make sense. Here’s one of their best sales assets ready, willing and able to address a customer and their needs, but instead that business had to be contacted via a low-end telemarketing group, and you couldn’t do anything about that. Nothing was going to change. Cantwell: They would rate people in call centers on AWT—average work time. You’d have a customer who contacted you, and your goal was to get them off the phone as fast as possible. That doesn’t make any sense. They would never talk to customers that didn’t like them, and that whole philosophy didn’t make any sense. I want our reps to know everything about that customer, because you are building a relationship. BWOT: What does Aviator, your operations platform, consist of, and how is it designed to support your customer-focused approach to business? Cantwell: Aviator is the name of our internal OSS platform that pilots the business. All activities that we do are logged to the system every day. The system is built with the customer at the center of everything we do. The platform we work off of is Sage Software’s SalesLogix. Our system integrator, Strategic Sales Systems, has worked extremely closely with our team to provide what we think is the premier OSS system in the industry today. This past year we have won Gartner Group’s top CRM Implementation worldwide for organizations under $500 million in revenue. Nucleus Research/CIO Decisions named us one of the top 10 installations for return on investment in 2005. And more recently 1to1 Magazine honored us as one of the Top 13 Customer Champions. While all of these awards are nice, we make sure everyone understands internally that our actions are not intended to win awards, but rather the awards help to validate our actions. Howe: We use Aviator as the core of our OSS because the customer information is at the center, so all communication with the customer is there in the system, and we wanted that to be the central point of our operations. It will drive orders, record trouble tickets, record sales interactions—all the key interactions are tracked in that system. That’s why it became the core. It did contain our order management process at one time, but we got a bit more sophisticated with that and moved it out of Aviator into a subtending system. Aviator tracks sales, trouble tickets, and maintains the customer service record. We pulled network management off to the side as well, although it interfaces to Aviator. Aviator also has a direct interface to our billing system, which we built internally. Kevin and I have both been in prior organizations where more money was spent implementing systems than was spent on the initial purchase, and both prices were astronomical. Before Big River, in prior organizations where we worked, software was purchased and consultants were hired to install it. But on system projects we have undertaken here, we have sat down with Big River personnel and have scoped out the data model, the info we need, and then defined the process model. Once you have that, you can build the system. It’s not that difficult. For example, we found six months ago that we had to automate some of our provisioning steps, and we met with some companies that have that automation capability—automating porting updates, 911, etc. But when we sat down with representatives from those companies, we were scared that they did not seem to know how any of it would happen. So we created our own, and because we had the data and process models, it was very simple and we did it quickly and easily. We’ve successfully used that approach over and over at Big River. BWOT: What kinds of things have you done to convince your employees to see customer interactions as opportunities and not as a burden, and to ensure that those interactions are positive as often as possible? Cantwell: Again, we stress everyday that the customer is why we are in business. Employee paychecks have printed on them: “A customer makes this happen.” We have posters throughout the business that state “Treat people like you want to be treated,” “The difference is in the details” and “Zero defects.” Every day at 4:30, everyone in the organization stops what they are doing and checks that they have entered all the customers’ information, notes, and discussions into our systems. They check if they have followed up on commitments, made the extra call to close out any trouble tickets, informed anyone internally of any issues, etc. The little things make the difference. The managers also secretly stop our customer service and sales representatives everyday. And we mean everyday. Was the call answered quickly and correctly? Did the issue we explained as a potential customer to the account executives drive them to providing a correct solution? Did the sales representative ask the right questions? We stress to employees that you are either a revenue producer or an expense eliminator. If you are not doing either one of these activities on a daily basis, we simply ask why. If you are not doing either of these activities you are not with Big River Telephone. Every customer gets the executive’s home and cell numbers. Employees see that we stand behind what we do and provide people with our home numbers. They know we will jump into a fire with them. We will go see any customer at any time. They realize that we are a total team working together and not a dysfunctional group that blames others. Even if the problem is not ours, we will commit the resources to fix the customer issue. We can work our way through the “what happened” after the fact. By the executive team and managers living and breathing the superior customer service level every day, it permeates throughout the organization. Everyone is committed to making the customer experience a positive one. We do little things, like Jerry and I sit in cubes. One of the first concerns of people was that we’d take people’s offices. But we said we were going to sit in cubes, we’d spent enough time in offices, and move around. People said, “But if you do that, you’ll know what’s going on.” We said, “Exactly.” I don’t have to wait six months or a year to sit down and evaluate people. We do little things every day. BWOT: What have you done to make Big River an active part of the communities you serve, and what has that done for you? Cantwell: Big River Telephone’s tag is “Real People, Real Service, Real Simple.” Our approach to the communities we serve is for our people to be involved. We like to hire people who are born and raised in the community. We look for someone who has been a “high school hero,” is educated, has a good name and wants to be involved in the community. We encourage them to become active members in local service organizations and to be a positive asset in the community. People do business with people they know and trust, and people will pay more to have a comfort level with a local organization. When you call an incumbent, you may end up talking to someone in India, but with us you’ll know the person personally from church or a Chamber meeting or a Rotary club or a Little League game. So if I have a problem I’ll see him in the community and know he can deal with my problem. In that rural market, the big guys have closed offices, shut down, laid people off, and we’re filling that void out there. In terms of community events, we do a Relay for Life—the cancer organization, and Ronald McDonald House. We’re huge in the March of Dimes. There’s a big Christmas parade in Cape Girardeau, and we sponsor it. There’s a barbecue contest that goes to a national competition that we sponsor. We sponsor all kinds of Little League baseball, basketball teams. We encourage classes to come to our central office for a tour. You can’t get into a Bell central office, but I want every class I can coming in here so kids go home and talk about it. That’s part of our commitment to the area. There’s no special thing there, it’s just a matter of being involved in different ways. We have different employees who get involved in these events, and we support them in doing it and encourage them to take a leadership role. We encourage them to take time during the work week to volunteer and actively work events. This is not vacation or personal time. This is customer time and Big River giving back to the community time. Why would I be concerned about someone being out with 30 of our customers and charge them a vacation day or personal day? That makes no sense to me. BWOT: How do you manage the risk associated with new technologies and overcome the customer impact when things don’t work out? Cantwell: We are constantly looking at the next best thing for the customer experience. We are currently testing VoIP web conferencing with some customers. It allows them to hit one button on their browser and be in a live video call with our customer service representatives. We will take risks to improve customer service. The customers do not mind if we try something new and it does not work as advertised. Why? Because they know from our experience and efforts that we do care and we are only trying to make new improvements to meet their needs. Howe: A case in point: a year ago, we rolled out some new network equipment—some access equipment—to terminate lines to equipment in central offices. We rolled it out and it didn’t work. It only took a couple of weeks to realize the equipment we deployed was defective, had a fundamental design flaw, and we had to pull it out and reconfigure our network. It would have been a complete disaster had it not been for our ability to communicate with our customers through these difficulties. In other organizations, there is a general disinterest or lack of desire to want to talk to the customer. And in those organizations, not only don’t they want to talk to the customer, if there are problems, then they really don’t want to talk to the customer. We operate in a way where that’s exactly when you want to increase your communications with the customer. You tell the customer, “We’re upset that your service is not working properly, here is what we are doing to fix it, and here’s when we believe it will be done.” Here’s another example. Unbelievably, we had a beaver chew through a fiber line in a swamp in southern Illinois, and it took out 300 of our customers. We were on top of those customers telling them when we’d fix it, so we significantly intensified our communication with our customers during the few hours of the outage. Kevin and I were trying to calculate how many customers this would cost us, but despite the disruption, they appreciated our communication. Our communication about the disruption was a service that we provided to them. We did not lose a single customer, because they said they knew what was going on. When it got spliced back together, we called every customer personally to tell them they were back up and running. Our systems facilitated our response through the entire incident, but our customer service attitude is what drove it. |
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