The FCC (Federal Communications Commission) defines Cramming as “the practice of placing unauthorized, misleading or deceptive charges on your telephone bill”. Crammers are telecom service providers who purposely create confusing telephone bills in an attempt to “trick consumers into paying for services they did not authorize or receive, or that cost more than the consumer was led to believe.” Studies indicate the problem of cramming has been going on for years, and apparently it is still widespread on wireless invoices.
A few months ago the FTC (Federal Trade Commission) alleged that a large US provider was pulling this trick on its customers. In this instance, the provider was receiving 35 to 40 percent of the total amount charged to its subscribers for 3rd party subscriptions to content such as horoscope information or celebrity gossip that typically cost customers $9.99 per month. According to the FTC’s complaint, the US provider in some cases continued to bill its customers for these services years after becoming aware of signs that the majority of customers didn’t want them. Moreover the provider made it almost impossible for its customers to identify what these charges were for, and how to stop them.
Customer experience is the sum total of all the interactions a customer has with a brand during the customer lifecycle. It has become the critical differentiator in today’s hypercompetitive, hyper connected global marketplace.
To optimize both market share and margins, communication service providers (CSPs) must provide customers with consistent, compelling experiences - before, during, and after their purchases - across all channels. The tremendous impact that customer experience has on business performance is also evident on the downside.
The problem in most organizations is that they too often spend time focusing on the desired financial performance, rather than taking in consideration the inputs that drive those financial results. Because company stakeholders demand an objective way to measure performance, we tend to focus on the (financial) results without really understanding what caused those results. Rather than just looking at the financial metrics, organizations should also take in consideration the operating metrics, since they are the INPUTS that can help correlate or drive the desired results of a specific business. Looking across the business at operational metrics will help these stakeholders understand if there are areas for improvement, even if everything looks good from a distance.
Let’s go back to this Cramming scenario:
- You don’t have revenue issues here, because the services were being billed correctly (even if the customers aren’t happy with them)
- You don’t have the typical fraud issues with a negative financial impact, like what occurs with international revenue share fraud (IRSF)
- Customer Complains - The customer signed up for the service and it can be typical to get these kind of complaints
- Could there be a partnership issue? Who monitors the Partnership Impact? As long as you get paid are you assuming everything is going well
There is a big difference between having a year with good financial results, and an ongoing sustainable business model that allows for more predictable year-over-year results. Fortunately, today’s technology allows businesses to have a better understanding of the ripple effect that these types of decisions can cause. While the accountants may see cramming as a nice revenue stream worth the risk of FTC fines, they often don’t see the disastrous downstream impact.
Enterprise Business Assurance systems are designed just for this purpose – to connect the dots between a decision like ‘cramming’ and the real business impact it can cause.
- How many calls to customer care are related to a specific issue like cramming and what is the cost of time handling these calls?
- Is the rate of churn higher amongst those who are paying for these ‘cramming’ charges?
- Are these subscribers not paying their bills on time or cancelling their contracts?
- Are unhappy customers sharing their complaints via social media and with friends and family, and is this creating additional churn or lowering new subscription rates?
- Are you able to track usage and subscriber behavior, looking for outlier patterns?
- Are you able to integrate customer service feedback with billing and collections?
- What is the cost of lost trust? Are these subscribers less likely to buy other services and content from you in the future?
Enterprise Business Assurance does more than just look at revenue. You may be able to charge, bill or even collect for services and content subscribers don’t actually want to pay for, but there are other metrics that are not financial based and these systems will alarm you to signs of trouble in the future. Organizations that can combine historical and forward looking indicators in their audit and monitoring processes are able to identify existing issues and, at the same time, spot negative trends before they expand into real problems. And lastly, take your mother’s advice and stay away from the wrong crowd. When it comes to partnerships with 3rd party content providers, we suggest choosing your friends wisely. Just like in the movie Goodfellas – consorting with the wrong types will only get you into trouble.
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