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Tuesday, 14 March 2006 07:37

Telstra - know thyself

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Telstra might do well to heed the advice of the Delphic Oracle. Ever since its strategy announcement last November it has been telling everyone that matters (ie the investment community primarily) how a deep understanding of its customers will be the foundation of its future success, but the fault lines in the bedrock on which this foundation is to be built have been embarrassingly revealed.

The Australian newspaper has got hold of a Telstra internal document purportedly revealing that details of up to 500,000 Australians are incorrectly recorded on Telstra's triple-0 database; that 28 percent of Telstra's customer contact details for service orders on its copper network are deemed "unusable", with 25 percent of changed appointment orders containing "junk data".

According to The Australian, "The report also lists the duplication of records, obsolete product codes, a shortage of internal expertise and a lack of quality control as key problems with Telstra's database."

Yet repeatedly in recent months, ever since the landmark November 15 strategy briefing, we have been told that Telstra will know its customers better than any other telco on the planet and that this intimate knowledge will be a key to future success.

Thus CEO, Sol Trujillo, at the half year results briefing said: "We have completed over 22,000 interviews across our consumer and small and medium enterprise base. We now have a much greater depth of customer research from which we have identified seven needs-based segments, 18 product segments and 126 microsegments....no segmentation work like this has ever been done in the industry... It's going to enable us to be very, very targeted in terms of how we interact with our customers, how we sell to our customers, how we define a customer experience and then ultimately how we operate our business."

When asked now Telstra proposed to squeeze more growth out of the flagging mobile market, this, Trujillo said was the answer. "You will see that in the consumer side and in the SME side [of the mobiles market] we are going to have much more precise knowledge of who to target with what offers and how much."

It was the same message repeated last week by CFO John Stanhope at a Goldman Sachs JB Were Australasian Investment Forum in New York.

"The goal of market-based management is for us to know our customers like never before and deliver integrated services personalised or tailored to them. Our strategic marketing initiatives are the key plank in changing Telstra into a customer-driven organisation. We're putting the customer at the centre of everything we do, and this will be reflected through improved market shares, higher average revenues per user, and reduced churn...And those are not just words coming from me or on a page. We'll be demonstrating some of this at the Commonwealth Games shortly to be held in Australia."

Not just words? Too right. If Telstra does not even know precisely who 28 percent of its customers are and where they live, it's more like wishful thinking.


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