Why Telstra’s reputation damage continues to effect the national carrier

60 second intro

In recent news, Telstra’s reputation has yet again suffered another setback due to their most recent service outage. But what does this mean for consumers and will it result in increased investment of the Telstra network? Read on in the following article to learn more.

  • With recent network outages and poor customer reposes to the incidents, will the national Telco’s reputation continue to survive?
  • Competition is fierce in the industry at the moment and Telstra can not afford to be complacent.
  • Telstra customers look to the Telco as the leading national carrier, but if the incidents continue to happen, it’s hard to tell if their loyalty will remain.

Telstra and their angry customers

Another month has passed along with another blow to Telstra’s slipping national carrier reputation. With tens of thousands of current Telstra subscribers expressing their anger at the Telco, after yet another network failure incident. The company has been forced to reassess the way in which they manage their reputation.

It’s been reported that Telstra has begun conducting nationwide studies to discover just how bad things really are. With a long standing reputation as Australia’s number one national Telco, in recent months the brand has taken a serious battering. Discovering just how bad their reputation really is, will be the first steps on a long road to recovery which the Telco will need to take.

Some industry pundits are saying that Telstra’s reputation must have taken a serious battering. While on the same hand, other industry observers are saying that Telstra can quickly get back on their feet and resume being Australia’s premium carrier. Crisis management specialist, Tony Jaques, commented that as an organisation you must know that you are in trouble, when the media starts listing your failures.

Telstra taking a battering in the media

Tony went on to say that when the national media rolls out “failure lists” and they are constantly updated, it’s time for some serious damage control to take place.

With the problems facing Telstra seeming to go from bad to worse, competition is in fact catching up to them.

Competitors Optus and Vodafone Australia are both heavily investing in their networks and making partnership deals.

Telstra simply can’t afford to loose market share, or the existing good will of their customers.

“What’s even more damaging to reputation is not just its repeated system outages but the company’s inadequate communication to hundreds of thousands of angry customers.” – Tony Jaques, Director, Issue Outcomes.

Back in February Telstra suffered from one of their largest ever recorded network outages.

Reportedly caused by what the Telco claimed as “an embarrassing human error”.

Network incidents continue to occur

If this alone wasn’t bad enough for the national carrier, this incident was followed by two more network failures.

The further two failures in March resulted in roughly around 8 million customers being effected.

“As CEO I take full responsibility … and I regret the impact on our customers and the fact that we let them down.” – Andrew Penn, CEO, Telstra

As far as text book apologies go, this one was about as text book as they come, along with a promise from the Telco in reviewing their systems.

But, it was only last month when the network went offline again, affecting around 10% of all Telstra subscribers.

A lack of comment on the situation from CEO Andrew Penn, left most observers scratching their heads.

As suggested by leading analysts, perhaps it was due to the fact that the most recent failure happened only a day after an industry function. Andrew Penn was reported to be boasting at the function that a review of the Telstra network demonstrated its “ incredible strength and resilience”. Not only that, but Telstra moving forward was committed to meeting and exceeding all customer expectations.

Telstra still has a long way to go

But as the recent incident in May has been proven to show us, when it comes to working on customer support, they still have a long way to go.

After the most recent ordeal, it took Telstra in fact an entire week, before COO, Kate McKenzie released an apology to customers.

The Chief Operating Officer conceded that despite previous assurances made back in February, outage events continued to occur. That’s little comfort to the several thousand customers who were offline and effected by the most recent incident. The Telco then went on to explain with a technical explanation, as to why the prolonged outage occurred.

Telstra should have realised that any complex system can be prone to having outages and people generally understand that. The issue then becomes how as a national carrier do you handle that and the way in which it’s communicated makes all the difference.

When a company as large as Telstra is repeatedly under fire due to numerous outages and the media are taking notes, reputation management becomes important. Its how a company manages their reputation in a time of crises, speaks volumes to the way in which it can move on going forward.

In conclusion

Unfortunately this is currently the situation in which Telstra has found itself in now.

When it comes to the role of the CEO in facing a crisis, the question needs to be asked why would you use someone else to explain a company’s position?

Telstra’s latest experiences should provide others with an important lesson on how to best manage important decisions. An industry giant in an ever increasingly competitive market place is starting to look a little shaky. With both Optus and Vodafone Australia investing heavily in their networks, now is not the time for Telstra to be complacent.

As Bishop Joseph Hall once famously said,

“A reputation once broken may possibly be repaired, but the world will always keep their eyes on the spot where the crack was.”

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.