Feb 21, 2020
 in 
ISPs

Customer Service is a Key Differentiator for ISPs in Brazil

I

Investing in Brazil is a difficult task, as it turns out to be a country that concentrates countless peculiarities for those who come from abroad.

According to the World Bank's Doing Business Rankings, which measures the ease of conducting business in each country based on the conditions of the regulatory environment, Brazil is in the 124th place (out of 190). This is scary information for anyone looking to start a company there. But not all hope should be lost.

The World Bank's Doing Business Rankings has Brazil in 124th, out of 190 countries. Source: World Bank

Despite all the bureaucratic tasks they might face, technology companies remained mostly an outlier from the difficulty curve of incorporating there. Take for example the field of telecommunications, and the explosion of growth in Internet Service Providers (ISPs) outside of large metropolitan areas. Most of the difficulties in creating and maintaining operations in Brazil did not reach regional companies.

Instead, these smaller operations thrived on a sector that featured an enormous demand and a limited or poor offer, and on top of that a service culture where low quality customer care can go largely unchecked.

About 10 years ago, there was this exponential growth in the number of providers due to lack of alternatives to serve customers in smaller cities. But today, the difference is made by providing an excellent customer service, with a more human touch and care for the local community.

As the support quality increases, so does trust and the amount of problems solved. So it is no surprise that this is an area most companies are trying to strengthen.

It is evident that new technologies can help augment this effect, as we are seeing in the space of service automation and chat-based support with applications that enrich the experience of getting help. But there are barriers to implementing new solutions. For instance, in emerging countries such as Brazil, there is a problem with lack of market sophistication.

Despite growing Internet penetration rates, we can still find a wide number of analog-minded customers, most of whom are not particularly fluent with digital processes or transactions.

About 20% of the Brazilian population still does not have access to the Internet, but this is quickly changing. In the last year alone, 10% of the population gained access to the Web.

14+ million FTTH/B Homes Passed in Brazil, a leader in Latin America. Source: IDATE DigiWorld

That is a great trend, but these new Internet subscribers often come from demographic areas where basic needs are not met. In these places, rectifying a problem is often the cause of long, painful process that has them for another number in the large pool of grieving customers.

That is why we must keep in mind the real desires of our customers and their needs as consumers. It is an opportunity.

Those Internet Service Providers who understand why they were chosen to provide a specific service to their customers will continue to grow.

The rest will slowly wilt for a simple reason: Why would someone choose a more expensive service from a small company, if they can pay for the same service in a large company, for two thirds of the price?

People seek to have an exclusive service, and not feel just like one more in the crowd. When a company treats a customer as one more cog in the machine, that customer will treat the company as detachable, forever.

According to the Microsoft 2018 State of Global Customer Service Survey, 95% of the respondents indicated that customer service is important to their choice of brand and their ongoing loyalty. And that most people agree the most important aspect of a good customer service is the ability to resolve issues in one sitting. The second most important? Having knowledgeable support agents.

Startups and advisory companies have already understood this, and are putting it into practice. A well-known example is Nubank, a leading financial services provider in Latin America with a digital edge and a modern approach.

Nubank understands that belonging, being part of the community and providing solutions is a central element of their user experience. Source: Nubank

Its service processes are pleasant, they are part of a service quality experience. To do this, they employ well-trained customer support agents who truly care about the type of assistance they provide.

It is a stark contrast to the traditional banking experience of having distant, cold people who keep a corporate speech on repeat, aimed at deterring a true solution. Take a number and wait. Take this temporary solution now, and some other day we will solve your needs.

Instead, what we should think about is: What service would I like to receive? Would my client be able to use this information channel? These answers might be found in the success of chat-based platforms that put customer happiness at the core of the experience. What users demand is transparency, realness and speed.

After attending APRONET, a regional event aimed at ISPs, I had the perception that the current market leaders seek to mirror the companies that preceded them. As if forgetting that they succeeded in this sector for being different from the monopolies.

In this regard, I believe we should stick to Heraclitus’ premise: you can't step in the same river twice, for other waters are ever flowing to you. And that goes for the market currents and technologies used.

Heraclitus would probably be very upset with the customer service offered by ISPs in Brazil.

The policies of the past served the people at that moment, in those market conditions. Following our proverbial example from Heraclitus, the market segment might be the same, but the services and consumers have changed, as they are ever-flowing.

Currently, regional providers lead in more than 3,500 cities in Brazil, followed by bigger carriers such as Oi, Vivo and Claro / Net. Put together, these small companies represent far more than the obvious commercial value of the big 3. This shows the potential and power balance in the market, with more than 9.49 million subscribers nationwide.

These "competitivas" have established themselves in small cities, but together hold more market share than the big carriers. Source: TELECO.

It is important to note out of those figures for Brazil, that the customers outside of metropolitan areas did not have a local provider before, or were serviced poorly by large companies who did not have an interest or proper infrastructure in small, disaggregated demographics.

So in essence, while technological advances are essential for any company, the cost efficiency gained through the use of automation makes the case stronger by significantly boosting profitability. It would be foolish to go after bigger companies without first doing what you can do better than them: Excellent Customer Service.

However, we must be careful with the entire customer process, and remember that the main objective is customer loyalty and not just a sale to beat the goal of the month.

If done properly, an excellent customer service from a small company can go a long way in capitalizing the opportunity that the market development currently represents.

-William Beckhauser