As he nears the 100-day mark as chief executive officer at Rogers Communications Inc., Joe Natale is focused on the “moments of truth” when it comes to dealing with customers.
The new CEO unveiled key details of his strategy to improve Rogers’ reputation for customer service as the Toronto-based cable and wireless provider reported strong financial results on Thursday.
Mr. Natale says he’s drawing on his past – as both a management consultant with a bent for business transformations and a top executive at wireless rival Telus Corp. – to bring a fresh approach to a task some at the company have described as trying to turn around a slow-moving steamship. The first step, Mr. Natale argues, is acknowledging that customer service goes beyond the employees who deal directly with the public.
Mr. Natale said he wants everyone in the company to think about how what they do affects customers. Employees who launch marketing strategies, design rate plans or provide support on tricky issues such as customer moves all have an opportunity to do something that “makes or breaks those moments of truth with our customers,” he said.
“This is a business where we have 26,000 people,” Mr. Natale said in an interview. “About a third of our team members face the customer every day. The other two-thirds don’t spend their days in front of customers but have a big impact on the success of that one-third that does.”
It sounds familiar in part because it is; Mr. Natale played a key role in the development of Telus’ “customers first” strategy, which the Vancouver-based company implemented years earlier than its rivals. The idea of keeping the customer in mind at all times has become a corporate mantra at that company, and has also paid off through the lowest rates of contract wireless customer turnover – a metric known as churn – in the country.
“It is very likely a new approach for Rogers and something influenced from his time at Telus,” Macquarie Capital Markets analyst Greg MacDonald said. “I think it can help improve the culture and operating results over time.”
It’s not just for the sake of making people happy – improving customer experience leads to lower churn, saving the company money it can reinvest in networks and service, and in turn helping it attract and keep more customers. Any edge it can get is crucial as it fights rivals Telus and BCE Inc. for subscribers to keep growth – along with shareholder dividends – rolling.
On Thursday, Rogers reported 93,000 new contract wireless customers in the quarter – well above analyst estimates of 74,000 – and the lowest churn rate since 2009 at 1.05 per cent.
Mr. Natale – who has been on the job since April – said there’s still room to improve. Rogers has only gone after the “low-hanging fruit” so far, he said, fixing problems that clearly anger customers such as “bill shock” and giving subscribers easy tools to manage their data usage and avoid extra charges.
An electrical engineer by training who sold an IT consulting company he co-founded to KPMG in 1997, Mr. Natale said he also has plans for how Rogers can tackle the tangle of legacy IT systems and processes it has developed over the years. It is that kind of back-end complexity that makes the work of customer-facing agents harder.
“There’s no glory in ripping and replacing large systems,” he said. “The glory comes in creating user-friendly, customer-supportive, consistent front ends that resemble some of the great Web interfaces that we see every day when we’re online.”
There is “a lot of work to be done on this front,” he added, noting that is partly why he recently created the new role of chief digital officer, appointing Lisa Durocher to report directly to him.
Rogers said profit grew 35 per cent to $531-million in the second quarter while revenue in the period was up 4 per cent to $3.6-billion. Profit was boosted in part by $74-million in real estate sales, including the Rogers Media complex at Lake Shore Boulevard West and Bathurst Street in Toronto, which the company sold to developer Canderel.
On an adjusted basis, Rogers earned $1 a share in the second quarter, beating analyst estimates of 93.7 cents.
Its cable business reported slower growth, however, adding just 11,000 Internet customers and losing 25,000 television subscribers.
Revenue at the wireless business was up 5 per cent to $2.05-billion and adjusted operating profit was up 8 per cent to $924-million. Rogers said customers spent more on high-value data plans and added multiple lines to their accounts.
The cable division reported flat sales of $870-million and adjusted operating profit grew 3 per cent to $428-million. The company said revenue was hit in part by a regulatory decision that lowered the rates it can charge wholesale customers who resell its Internet services.
For Rogers’ media business, sports continue to be its primary focus, leading to 4-per-cent growth in revenue to $637-million. However, higher salaries at the Toronto Blue Jays baseball team increased expenses, contributing in part to a 30-per-cent decline in adjusted operating profit to $63-million.