How AT&T Could Have Prevented Its DirecTV Now Customer Experience Crisis

The rapid transformation of home entertainment necessitated that the long-established leaders of the telecommunication industry make bold moves to stay relevant in consumers' hearts and minds who were experiencing an equally rapid shift in their expectations. Upstart services such as Hulu, Sling and other streaming services had accurately predicted consumers' hunger for alternative content distribution channels that more actively catered to increasingly busy lifestyles at significantly lower price points than what have been offered by market leaders.

Similar to many aging multinational conglomerates, AT&T had lost much of its nimbleness to adapt quickly to transformational market dynamics. Its DSL network, while transformational in many ways in years past, is slow compared to more modern offerings such as cable internet and fiber. To be blunt: DSL is a dinosaur begging for a catastrophic meteor to put it out of its misery.

AT&T recognized this simple fact. Instead of solely focusing on making a multi-billion dollar investment over the course of many years to transform its extensive DSL network into a fiber one while battling the government over possible regulatory issues, it acquired DirecTV instead in a $48.5 billion 2015 deal.

Why did this matter? It fostered AT&T's ability to mitigate market risk by spreading its home entertainment offering across DSL, fiber (AT&T) and satellite (DirecTV) distribution channels. The merger added DirecTV's 20.3 million subscribers to its 5.7 million U-verse users. It prevented costly, long-term upgrade investments to its network while simultaneously battling regulatory issues.

However, that is where the good news ends.

In acquiring DirecTV, it had not purchased an SVOD (Subscription Video on Demand) expert. It had bought a direct competitor in the more traditional television cable services vein. Neither AT&T or DirecTV had much insight into SVOD previously. True, both had experiences within VOD (Video on Demand), but VOD and SVOD are entirely different consumer mindsets and provider offerings that do not directly correlate with one another.

AT&T's solution to this challenge employed a time-honored marketing tactic: leverage the acquisition and apply its well-known DirecTV branding onto a new SVOD offering to compete directly with Hulu, Sling and other streaming services - DirecTV Now. Before launch, it had been seen a potential game changer to help recapture revenue lost to cord cutters. AT&T's new SVOD service debuted on the final day of November 2016 - a scant 16 months after its acquisition of DirecTV.

AT&T's initial offering (since expired) was appealing certainly. For a mere $35 per month, subscribers would have access to 120+ live TV channels delivered digitally. For an additional monthly fee of $5 each, customers would also have access to premium channels HBO and Cinemax. Subscribers that pre-paid for 1-month received an Amazon Fire stick (a $40 value); those who prepaid for 3-months received a 4th generation Apple TV (a $150 value). Further, AT&T offered a trial period with (presumably) no obligation should the user decide the service had not met his or her expectations.

If one only looked at its subscriber numbers in its first month - 200,000 - one might presume that AT&T had scored a home run. If only.

Almost as soon as DirecTV launched, it was plagued with technical challenges that prevented many customers from receiving access to the service for which they had pre-paid. When troves of frustrated customers began to contact AT&T through its chat support channel to request refunds for services they had paid for but were not receiving, the company's response was less than desirable - no refunds and no credits. But sure, feel free to "cancel anytime."

Moreover, the customer experience was abysmal at best. Under supported agents spoon fed nonsensical answers from scripts that had little to nothing to do with subscribers' anger, requests for access to the service AT&T had promised (and for which it had already collected payment) and desire for resolution!

Understandably, AT&T's already frustrated customers were now pissed! They flocked to social media to air their grievances, warn others to stay away from DirecTV Now, get the FCC involved and frankly, utterly trash both AT&T and DirecTV's brand names in the market!

It did not have to be like this.

While neither TaskUs nor myself would presume to know the closely-guarded inner workings of AT&T and its DirecTV brand, our experiences have shown us that there are ways to help ensure a stronger CX atmosphere for companies that experience a crisis.

If we had been AT&T's outsourced support partner before and during this unfortunate episode, we would have handled it differently. Much differently. In fact, here are three fixes that we believe would have significantly improved the organization's response to the crisis.

Fix #1: Provide Service Teams with Appropriate and Timely Insight

While 16 months is a very short time to test and launch an entirely new service (SVOD) when not a core competency, it is more than enough time for a marketing team to appropriately ideate, design, research, test and implement a full-cycle campaign that informs in-house stakeholders and functional teams of its efforts.

Further, this is also more than enough time for both Marketing and Customer Care teams to have been advised about potential technology challenges by its IT, Product Development, and Quality Assurance teams.

Bluntly: DirecTV's launch disaster occurred before its launch. It simply was not ready to go to market. A single department could have raised a red flag of warning to AT&T's front line - its Customer Support team's agents - so that it would have been prepared adequately for a potential disaster. It failed.

Fix #2: Empower Agents; Do Not Macro Them to Death

While there is certainly a time and place for templated (or macro) responses to common questions, concerns and requests, they must flow logically from what is communicated between customer and agent.

Consider: A customer calls your support line and says to an agent, "I am calling to cancel my service today. I hate your product." The agent replies with the scripted answer, "Your satisfaction is our top priority, so I went ahead and wolfed down a box of Girl Scouts Thin Mints in your honor."

Clearly, this is a silly example but is it honestly any sillier than over relying on canned responses that do little to provide a customer with empathy and a clear indication that they have been heard? AT&T's agents were not empowered to listen to customers and proactively solve tickets with appropriate resolutions. Their hands were tied. The crisis escalated as a result.

Fix #3: Pray for a Sunny Day; Staff for a Category-5 Storm

It is an extraordinarily rare event for a product to launch without any complications or unanticipated events. In fact, one should just expect and plan for something to go wrong. This is not a negative response. Rather, it is a proactive, proper response to help ensure high-quality customer experiences and foster opportunities for customer delight should things not go as planned.

One simple way to accomplish this is to staff appropriately. AT&T should have expected hiccups - and increased its staffing numbers. Neither AT&T nor its acquisition DirecTV owned a core competency in SVOD. The DirecTV was not a simple service launch; it was a push into a new service category!

Simply put: AT&T's support staffing did not reflect this. It did not (effectively) take into consideration ticket volume fluctuations. Is it any wonder that its overworked agents were forced to rely on pre-written scripts instead of providing high-quality care to the most vulnerable of customers?

While many companies don't want to pay for this type of staffing, it is not as simple as turning on a switch should the need arise! An organization must bring in seasonal employees, offer overtime wages, turn your best agents into trainers and SMEs and ensure that they have enough workstations available. In short - all of these items take effective planning.

AT&T could have and should have done better. Unfortunately, it is now too late. Its DirecTV Now launch has been sullied by horrific press and angry consumers. A lack of proper planning has potentially ruined an otherwise very intriguing SVOD offering that had the potential to be a legitimate rival to other streaming services.

How will your business solve a potential customer support crisis in its future? Are you ready? To learn how TaskUs can help your organization avoid AT&T's mistakes and properly execute a customer support program that actually works, contact us today!

References:

1. Perez, Sarah. “AT&T Denies Refunds for DirecTV Now Customers, Despite the Service’s Performance Issues.” TechCrunch. TechCrunch, 16 Jan. 2017. Web. 26 Jan. 2017.

2. DIRECTV NOW | Stream TV – Watch Live TV & On Demand. DirecTV, n.d. Web. 31 Jan. 2017.

3. Smith, Kyle. “DirecTV Now Is a Total Disaster.” New York Post. N.p., 13 Jan. 2017. Web. 26 Jan. 2017.

4. James, Meg. “AT&T’s New Video Streaming Service, DirecTV Now, Boosts Quarterly Results.” Los Angeles Times. Los Angeles Times, 25 Jan. 2017. Web. 26 Jan. 2017.

5. Mills, Chris. “DirecTV Now Is Seriously Broken.” BGR. BGR Media, LLC, 13 Jan. 2017. Web. 26 Jan. 2017.

6. Owen, Malcolm. “DirecTV Now Breaks 200,000 Subscribers in Problematic First Month of Service.” AppleInsider. AppleInsider, 23 Jan. 2017. Web. 26 Jan. 2017.

7. Popper, Ben. “Here’s Why AT&T Is Trying to Buy DirecTV.” The Verge. The Verge, 19 May 2014. Web. 26 Jan. 2017.

8. Bode, Karl. “AT&T Makes It Clear: It Bought DirecTV So It Doesn’t Have To Upgrade Its Lagging Networks.” Techdirt. Floor64, 18 Feb. 2016. Web. 26 Jan. 2017.

Michael Buenaventura

January 31, 2017