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  • Writer's pictureCrisis Shield

Why Telstra is losing its image as a premium and leading brand

We recently wrote an article about how the impact of cyber incidents (data breaches, IT failures etc.) can escalate when a company does not have a crisis management plan in place or does not respond effectively to the incident. The recent series of Telstra (Australia’s largest telecommunications company) network failures exemplifies this, with four outages over two months adversely affecting millions of customers.

The first incident in this recent spate of Telstra network failures occurred on Tuesday afternoon on February 9th affecting more than 3 million customers.

A second, smaller outage followed on March 1st affecting 500,000 pre-paid customers.

The third incident on March 17th was the largest yet, leaving more than 8 million customers (about 50 per cent of Telstra’s customers) without network service for 3 hours.

The fourth outage occurred last week on the 22nd of March when up to 507,000 mobile customers were unable to make or receive calls for an extended period of time.

When a problem occurs repeatedly in short succession, customers – understandably – become unforgiving and impatient. The company’s goodwill bank runs dry and each new promise to do better – ‘we’ll do everything we can to ensure this doesn’t happen again,’ – sounds emptier and weaker than the last.

After the first outage, Telstra’s Chief Operating Officer (COO) Kate McKenzie came out and blamed the occurrence on a human error and offered Telstra customers a free data day on Sunday February the 14th. Following the third outage on March 17th, Telstra’s CEO Andrew Penn made a public statement apologising for the recent outages stating that "one is not acceptable, and more than one is completely unacceptable”. Again Telstra offered customers another free data day on Sunday April 3rd.

Unfortunately for Telstra some customers viewed the free data days as inadequate forms of compensation. One woman posted to Telstra’s Twitter account that a “free data day is not good enough anymore” especially when she “couldn’t make or receive any calls, not just data”. These sentiments were reiterated across social media as seen below. Telstra’s own social media response has also come under fire.

Nowadays customers expect a company’s staff to be across an issue within minutes of it occurring – especially a telecommunications company that provides essential services 24/7. Speed, accuracy and consistency are three of the key principles behind successful crisis communications. To achieve this, outward-facing staff who are likely to field customer or other key stakeholder enquiries, need to:

  • be informed about an issue or incident as quickly as possible

  • know the verified facts as soon as they are available

  • have a consistent authorised holding statement/key messages/remediation offering they can communicate.

In the Telstra case, this would mean that social media, call centre, and other outward facing teams are informed of a network outage as soon as it occurs so they can get their response to customers right. Lack of communication, or lack of consistency in the messages communicated from different departments compounds an issue and confuses customers. For example, a Telstra customer who appealed for help on the company’s Twitter page was directed to turn his phone on and off in an attempt to fix the problem, which was actually the result of the nation-wide network failure.

This type of communication failing frustrates customers and disempowers frontline employees who are made to feel foolish and helpless because they are not equipped with the information they need to serve customers.

The multiple incidents and Telstra’s response to them has displeased customers, attracted calls for an external investigation into the repeated failures, and tarnished Telstra’s reputation.

Telstra has built its business and positioned itself as a premium brand and the leading telecommunications company in Australia. Customers will pay a premium price when the quality of service is high; up until now Telstra has largely been able to justify its high price point with premium service. However, these outages severely undermine Telstra’s value proposition, which brings customers to question how much they spend and look at competitors’ offerings. Telstra will have to work incredibly hard to regain the trust of its customers.

If your company needs training in crisis management or reputation management, contact Briggs Communications today. Our consultations can help your company manage all aspects of a crisis including social media.

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