On his first day as chief executive officer of Rogers Communications Inc., Joe Natale made it clear he will tackle the company’s perennial problem: customer service.
Mr. Natale has been noticeably silent since being named by the board in October to lead the company, bound by the terms of a non-compete agreement with his former employer, Telus Corp.
Freed of those constraints on Wednesday and now officially on board as CEO, he highlighted the work that must be done to better serve subscribers – something he worked closely on at Telus, which leads the Canadian telecom industry in its approach to customer service.
“I believe teams only succeed if they obsess – truly obsess – over the customer experience,” he said in a speech to the company’s annual general shareholder meeting in Toronto. He said Rogers has made some “inroads” on customer service in recent years, adding, “There’s definitely more work to do, but there are signs of good progress.”
Mr. Natale said he does not yet have a detailed plan for the company but will spend time in the coming weeks talking to cable technicians in the field and visiting retail stores and call centres to get a better sense of the customer experience on the ground.
The Toronto-based company is Canada’s biggest wireless carrier and has a large base of cable television and Internet customers in Ontario and the Atlantic provinces. Its size alone makes attention to the customer experience crucial, said BMO analyst Tim Casey in a research report Monday.
Better-quality service can help reduce the rate of turnover – known as churn – and keeping existing customers helps boost a company’s net subscriber additions. Plus it’s cheaper than acquiring new customers.
“Rogers consistently has had one of the highest churn rates amongst the Big Three,” Mr. Casey said, referring to competitors Telus and BCE Inc. “This is a critical operating metric for Rogers, given it has the largest installed base. Simply put, churn rates matter more at Rogers.”
Mr. Natale’s predecessors – most recently Guy Laurence and before him Nadir Mohamed – both recognized poor customer experience as a major hurdle at Rogers. Mr. Laurence took a number of steps to address the problem, including easier-to-understand bills, data management tools, unlimited Internet plans and a popular flat-rate international roaming service.
But Mr. Casey said that while Rogers has some momentum behind it now, improving customer service and churn rates are still among the most important tasks if the company hopes to promote profit growth.
“We believe it is no coincidence that Rogers hired Joe Natale, given his leading role in executing Telus’s multiyear ‘customer first’ culture; an accomplishment that is reflected in the company’s industry-leading churn metrics and consistently higher customer and employee satisfaction score,” Mr. Casey said. Mr. Natale was a long-time executive at Telus and served as CEO for about a year before Darren Entwistle returned to the role in 2015.
Rogers’s churn rate among contract wireless customers was 1.24 for the full year in 2013, when Mr. Laurence took over as CEO. For the full year in 2016 it remained stubbornly high at 1.23, compared with Telus’s full-year churn rate of 0.95. (Rogers’s first-quarter results, reported Tuesday, did reveal an encouraging drop in churn, down to 1.1, compared with 1.17 in the same period in 2016.)
The company is also struggling with the consistent loss of television customers as its outdated cable offering struggles to compete with BCE’s Internet protocol television (IPTV) product, Fibe TV. Rogers has used attractive Internet plans and speeds to help slow down the rate of cable losses in recent years – in 2016 it lost a total of 76,000 cable customers, 52,000 less than the previous year. But Mr. Natale will nevertheless be under pressure to execute a smooth roll-out of an IP-based television platform, which Rogers is licensing from Comcast Corp. and plans to begin offering next year.
Mr. Natale also said Wednesday that he wants to promote a culture at Rogers “where people can thrive professionally and personally” and that he plans to use innovation to support “profitable growth.”
On top of operational decisions, investors will be waiting for Rogers under Mr. Natale to resume dividend growth. In a surprise move last year, the company decided against increasing the payout, keeping it at the same level it has been at since 2015 as it tries to rein in its debt-to-income ratio.
The new CEO did not take questions Wednesday, and in response to an inquiry from a shareholder, Alan Horn – who is chairman of the board and served as interim CEO – did not provide a definitive timeline on a return to dividend increases. He said Rogers would take the strength of its networks and balance sheet, as well as shareholder returns, into consideration in assessing its dividend policy.Report Typo/Error