Market Insight

Vodafone UK strengthens customer focus with digital initiatives

July 19, 2017

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Vodafone has announced a series of digital customer service initiatives in the UK, as part of the operator’s plans to recover from its recent and well-publicised problems in this area.

  • Message Us: Built in to the My Vodafone app, as well as customer’s online accounts, Message Us provides an asynchronous way to reach Vodafone customer care teams so that customers can revisit conversations with advisors whenever it suits.
  • TOBi: Vodafone's artificial intelligence Chatbot responds to questions asked within Message Us. If TOBi is unable to answer, the customer is handed over to a web chat advisor. First launched in April, Vodafone has expanded TOBi’s capabilities to provider answers to account specific questions.
  • Voice Recognition: Vodafone’s customer service line is piloting voice recognition, whereby customers will be able to access their accounts using voice recognition when they call. This is a more secure method than pin-based solutions.
  • Natural language call steering: Vodafone has introduced a new call steering system to its customer service line that will route customers to a qualified advisor based on what the customer says, rather than a traditional touch-tone and directed dialog-based IVR.
  • Alexa: Later this summer, Vodafone will launch a skill for Amazon’s Alexa that will enable the digital assistant to answer customer questions.
  • Social Media: Vodafone has become the first UK telco to offer 24/7 support via Facebook and Twitter.

Our Analysis

Vodafone aspires to be either first or second in terms of customer experience in each of its markets. Measured in terms of NPS, Vodafone Group CEO Vittorio Colao said in May 2017 that the operator had achieved this in 13 out of 15 markets. The UK was one of the territories where it had failed to reach this position, however, the telco’s UK operation has made recent improvements in this area.

Largely driven by improved performance of its billing systems, Ofcom’s Q1 2017 data shows that Vodafone’s pay monthly mobile complaints have reduced by nearly 50 percent compared to Q4 2015. The operator is still above the industry average in terms of complaints, but will look to drive further improvements via a series of digital customer service initiatives.

Digital customer service can improve customer experience and lead to cost savings

Vodafone’s AI chatbot, TOBi, is powered by a mix of IBM Watson and LivePerson. Vodafone is the first operator to use a specific version of Watson designed for telco customer service. The chatbot has learned language that is specific to Vodafone, such as product names and tariffs, and Vodafone state that TOBi understands what a customer needs help with more than 90% of the time.

Vodafone will also be the first telco in the UK to have a skill on Alexa. At launch, 50% of Vodafone customer’s most frequently asked questions, in addition to specific billing-related enquiries, will be able to be answered by Alexa. Like TOBi, this new form of communication can differentiate Vodafone’s customer service, and provide customers with a much quicker response to their questions compared to traditional methods. 

The investment in digital customer service presents opportunities for Vodafone to reduce its costs in the UK, as a result of reduced wait time and improvements in first time resolution. At 16.1% in Q117, Vodafone’s UK EBITDA margin is the lowest among the UK MNOs. Like many other telcos, Vodafone UK has struggled to achieve revenue growth in recent quarters and investments in digital customer service may provide an effective route to improved EBITDA margins.  

Digital customer service will become increasingly important for telcos

Telecom operators are increasingly focussed on customer service. Vodafone’s digital customer service initiatives lay the foundations for the operator to deliver an improved customer service over the upcoming years.

As a result of TOBi’s integration into My Vodafone app conversations, the operator’s artificial intelligence Chatbot will learn new information, enabling it to answer more questions in the future. As TOBi becomes smarter, Vodafone could look to extend its reach beyond the My Vodafone app, integrating TOBi into popular apps such as Facebook Messenger and WhatsApp.

Furthermore, the importance of telecom operators developing skills for voice assistants, such as Alexa, will be increasingly important as these platforms become more prevalent and customers become accustomed to interacting in this way. IHS Markit's latest forecast predicts that there will be 7 billion voice assistant capable devices in use by 2020.

Vodafone is not the only telco implementing digital customer service initiatives

TalkTalk was the first UK telco to introduce voice recognition to its call centres in March 2016. Furthermore, earlier this year, Deutsche Telekom launched a customer care bot, Tinka, for its customers in Austria. The operator reported that 50 000 people per month are using the chat bot.

Other European telcos are looking to use digital assistants as part of a wider strategy to look beyond traditional telco services for alternative revenue sources. Orange’s digital assistant Djingo will launch on an Orange home speaker in early 2018, and can be used to control Orange’s TV and connected home platforms, as well as deal with customer service queries.

Telefónica’s digital assistant, Aura, has similar use cases to Djingo, but is cross-platform therefore can be used on a range of mobile and home devices. There is no official launch date, but Telefónica plans to first roll out Aura to its core markets including Spain, Germany and the UK.

UK Western Europe
Vodafone UK
Research by Market
Mobile & Telecom
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