The Future Looks Bright For Orange

Sydney Morning Herald

Tuesday October 10, 2000

Dorothy Kennedy

Aussie telcos are going mad for CRM, writes Dorothy Kennedy.

Hutchison Telecommunications, through its Orange brand, took a seat on the customer relationship management (CRM) juggernaut in July when it signed up with SAS Institute for data mining software and consulting services.

Orange's travelling companions include Telstra, Cable & Wireless Optus, Primus and just about every other telco in the land, as theindustry rushes CRM with anenthusiasm second only to that of the financial services sector.

Orange hopes its arrangement with SAS will help propel thenumber of customers using itsOrange One home and mobileservice from 25,142 in August,to around 400,000 by the end of 2002. The initial implementation will take six months, with software configuration due for completion by the end of September.

At first, Orange will use the SAS software to extract and analyse its data, but the obvious next step is to integrate this information with its sales call centre.

Orange's public affairs manager, Trisha Fox, said the call centre had 90 staff, but there may be 150 hands on deck by early next year.

It's all part of an expensive, industry-wide rush to hang onto customers in the face ofintensifying competition. A recent survey from callcentres.net, forinstance, found that Australia's top 1,000 companies spent an average of $2.14 million apiece on CRM strategies in the 1999/2000 financial year, with a 36 per cent increase expected this year.

Some companies indicated they were spending hundreds of millions of dollars on an ongoing basis to implement effective CRM across their organisations, said callcentres.net CEO, Martin Conboy, when the report wasreleased in August.

Like just about every other CRM play in the telecommunicationssector, commercial detailssurrounding Orange's project are closely guarded, and senior Orange personnel are either unwilling or unable to talk about relatedstrategic matters.

All communications with Orange for this column, for instance, wereresolutely funnelled through the public affairs area. Even themarketing director wasn't up for a chat. The press release announcing the recent agreement came from SAS, not Orange.

According to Michael McDonald, information communicationstechnologies (ICT) sector manager for SAS South Pacific, the software that Orange has bought has also been taken up locally by each of the major telcos.

Implementations, he said, start in the low hundreds of thousands of dollars, and go up to $2 million.

``The telcos are really hitting the analysis of their customers very hard at the moment because, as you know, a lot of the valuation of these companies comes from theircustomer base," McDonald said.

``You can see how share prices get hit very hard if there's a perception that they're losing their customer base, so the customer really isbecoming a very key metric for the valuation of these companies."

Mobile phone number portability, when it arrives, will add to thecustomer retention frenzy, as itbecomes easier to move between carriers. Impenetrable pricing plans and customer service rhetoric may, at last, become relics of a simpler age. The telcos have talked about it (customer service) for a long time, but they're getting very serious about it now, McDonald said.

dorothy-kennedy@hotmail.com