05
d'Octubre
de
2015
Act.
05
d'Octubre
de
2015
"Our aim is to make money without getting on people's nerves," says Pedro Serrahima (@serrahim), director general of Pepephone. This Mobile Virtual Network Operator (MVNO) now boasts more than 500,000 clients, a turnover of 60 million euros and nine million in profit in 2014. However, the company provides something beyond what the sector normally offers.
In fact, it was the first telecommunications company to be ranked highly by its clients, according to OCU polls. "It is sad that things should be like that," says Serrahima, who never tires of repeating the phrase that his company "just wants to do things normally." And it has, with a team that had no experience in the mobile telephone sector.
Pepephone was set up at the beginning of 2008. Initially, it was part of the Globalia tourist group, with the idea of being a low cost business, like it already was with PepeCar. However, they have been going it alone now for some time, and Serrahima says that the company was set up with a peculiar philosophy. "We knew that to compete with a large company you have to know much more about the market, or know nothing at all. So we decided to compete, admitting that we did not know anything about the telephone market."
This lack of experience had a positive effect in that it broke the mould. "We don't give offers or gifts to our client. That just brought us total failure for two years until brave people began to join who wanted to see if what we were saying was true," says the company director. And what were they saying? The same thing they say now. "Since 2008 we have not had a strategy. Or rather, our strategy are the principles on our website. We don't do anything that we cannot explain," he says.
Non-negotiable principles
Pedro Serrahima recalls that until then "there was no competition, and everyone was used to a model without ethics or principles." In fact, he is convinced that "if we had been a company with a normal model, set up by a group of small investors and if we had had to live off that, things would not have worked out for us."
Positioning itself as an "honest" company creates the difficulty of not being able to say so "because they all say it, and hoping that people believe you in this market is not easy." Faced with this, Serrahima explains that the company's tactic consisted of "keeping quiet, working in silence and getting on with it. Luckily, as it was not a normal company, we managed to just get on with things until they started moving forward."
However, to talk about Pepephone is to talk about customer service. Basically they do not have a marketing, commercial, or communications department. They are made up of 20 employees, almost all of whom work in customer service. "From the beginning we decided to place 100% of our call centre in Palma de Mallorca, with attention in Spanish and Catalan," the director general stresses.
Nor does the company collect client information in order to do segmented analyses. "We want old school marketing to work: we have a product and we hope you like it. If you don't like it, instead of trying to change your thinking, we change the product," says Serrahima.
In the end, he continues, "we treat the client normally." That translates into a series of norms that are "a little suicidal, but that work for us." Their agents only work for Pepephone and are not allowed to pass a call on to another agent. "There are no machines, a person answers your call and attends you until the end. Your are also forbidden from selling anything, nor can you offer a different rate or product." In fact, any improvement in rates are applied automatically to all existing clients.
Serrahima also stresses that each agent in the call centre has the same level of privileges as the others. "If a client calls you and says that there are 20 euros on the bill he or she does not agree with, the first thing that the agent does is reimburse them. Once they have returned the money, the complaint can be dealt with." If they see within a week that the client was not right, they charge him or her again. But if the next bill arrives and the problem has not been resolved, the client keeps the money. "It is a question of proximity, of talking person to person. In offshore call centres the agents do not know the company's services and the problems that can arise; and that is something we don't want," he insists.
"There is no small print, and if you treat the client as a normal person you understand them much better. We do not send them publicity or anything else. Our aim is to leave the client alone and not interfere in their lives, which is what all companies should do," reflects the director general of Pepephone.
He admits that "people think that the way we do things is strange, but we do what is considered normal in a relationship between people. Sometimes, as part of a company we forget that we are people, we change the way we speak and communicate, and we become defensive even when we are wrong." To his way of thinking, "if neither the company is on the defensive with clients, nor the clients with the company, everything is much simpler."
An alternative tactic
"I don't know how many visits I have on the website, nor if the clients in Barcelona are married or how old they are. This information ends up limiting you when it comes to making decisions," insists Serrahima. The head of Pepephone is critical of the fact that many companies in the sector "have decided that it is more profitable putting a permanence clause in the contract rather than working every day to keep the client.
This means that "instead of trying to keep all of the clients happy once you have them, what they find more profitable is waiting and calling them when they want to leave to bribe them with something," laments Serrahima. In his opinion, "you insult the clients who are with the company because you treat them worse than those who are not or who want to leave; and you also insult those who want to leave because you are telling them that you have been charging for something when you could have offered them something better."
Despite recognising that these can be "very profitable" strategies, Pedro Serrahima insists that "we have shown that we can be, too. We have 20 employees and we compete with companies that have thousands. We are probably the most profitable company in Spain and we do it by using normal strategies."
And it is true that, "all of us know as people what is good and what is bad. If I call you and I con you, you might accept it if the offer is interesting, but you know that I am conning you and the person calling also knows it. We believe that it is better to avoid this and to do things normally."
The 4G changes
Pepephone is a Mobile Virtual Network Operator (MVNO), in other words, it does not have a concession to a frequency spectrum. Thus, it does not have its own radio network and has to use the coverage of another company with whom it has an agreement. It had an agreement with Vodafone until a few months ago, when it migrated its clients over to Movistar coverage. The reason? To provide access to 4G.
"We had an agreement with Vodafone in which it had to give us 4G, but the large operators decided to keep it for themselves. In fact, today almost no MVNO has 4G," laments Serrahima. "We understood that we could access 4G because of the contract and we took it to court. Vodafone didn't think we would be brave enough to do it, because if we did not win the case we would surely have to close down. But we did it; it was a question of principle," he says.
In the end, they arrived at an agreement with Movistar and have had to face the challenge of changing network. "When you have 500,000 clients with Vodafone coverage, perhaps some do not want Movistar. It was unavoidable. It is tough but we had to do it so that our clients can have 4G".
The challenge of electricity
After the success with mobile telephones, the company's latest challenge is to repeat the formula in the electricity supply sector, and since September 30 PepeEnergy has been available. "We also looked at the banking sector, but it was frightening and so we decided to start with electricity," says Serrahima. "The same Pepephone people have done it, almost in our free time. It is a market that is perfectly designed so that no one can get into it," he says, highlighting that "if you are a small company, you have little margin and it is so regulated that you almost can't do anything."
In all, compared with Pepephone, PepeEnergy has no great expectation of earning large profits. "If everything goes well, perhaps we will earn 15,000 or 20,000 euros a month; while with Pepephone we make more than a million," admits Pedro Serrahima. In fact, they almost see it as a sideline in which they continue to apply their business principles. "We think that as longas we are in it we won't lose money, we like the idea of trying it out and so we will give it a go so that people see what competition in the electricity supply sector is like," he concludes.
In fact, it was the first telecommunications company to be ranked highly by its clients, according to OCU polls. "It is sad that things should be like that," says Serrahima, who never tires of repeating the phrase that his company "just wants to do things normally." And it has, with a team that had no experience in the mobile telephone sector.
Pepephone was set up at the beginning of 2008. Initially, it was part of the Globalia tourist group, with the idea of being a low cost business, like it already was with PepeCar. However, they have been going it alone now for some time, and Serrahima says that the company was set up with a peculiar philosophy. "We knew that to compete with a large company you have to know much more about the market, or know nothing at all. So we decided to compete, admitting that we did not know anything about the telephone market."
This lack of experience had a positive effect in that it broke the mould. "We don't give offers or gifts to our client. That just brought us total failure for two years until brave people began to join who wanted to see if what we were saying was true," says the company director. And what were they saying? The same thing they say now. "Since 2008 we have not had a strategy. Or rather, our strategy are the principles on our website. We don't do anything that we cannot explain," he says.
Non-negotiable principles
Pedro Serrahima recalls that until then "there was no competition, and everyone was used to a model without ethics or principles." In fact, he is convinced that "if we had been a company with a normal model, set up by a group of small investors and if we had had to live off that, things would not have worked out for us."
Positioning itself as an "honest" company creates the difficulty of not being able to say so "because they all say it, and hoping that people believe you in this market is not easy." Faced with this, Serrahima explains that the company's tactic consisted of "keeping quiet, working in silence and getting on with it. Luckily, as it was not a normal company, we managed to just get on with things until they started moving forward."
However, to talk about Pepephone is to talk about customer service. Basically they do not have a marketing, commercial, or communications department. They are made up of 20 employees, almost all of whom work in customer service. "From the beginning we decided to place 100% of our call centre in Palma de Mallorca, with attention in Spanish and Catalan," the director general stresses.
Nor does the company collect client information in order to do segmented analyses. "We want old school marketing to work: we have a product and we hope you like it. If you don't like it, instead of trying to change your thinking, we change the product," says Serrahima.
In the end, he continues, "we treat the client normally." That translates into a series of norms that are "a little suicidal, but that work for us." Their agents only work for Pepephone and are not allowed to pass a call on to another agent. "There are no machines, a person answers your call and attends you until the end. Your are also forbidden from selling anything, nor can you offer a different rate or product." In fact, any improvement in rates are applied automatically to all existing clients.
Serrahima also stresses that each agent in the call centre has the same level of privileges as the others. "If a client calls you and says that there are 20 euros on the bill he or she does not agree with, the first thing that the agent does is reimburse them. Once they have returned the money, the complaint can be dealt with." If they see within a week that the client was not right, they charge him or her again. But if the next bill arrives and the problem has not been resolved, the client keeps the money. "It is a question of proximity, of talking person to person. In offshore call centres the agents do not know the company's services and the problems that can arise; and that is something we don't want," he insists.
"There is no small print, and if you treat the client as a normal person you understand them much better. We do not send them publicity or anything else. Our aim is to leave the client alone and not interfere in their lives, which is what all companies should do," reflects the director general of Pepephone.
He admits that "people think that the way we do things is strange, but we do what is considered normal in a relationship between people. Sometimes, as part of a company we forget that we are people, we change the way we speak and communicate, and we become defensive even when we are wrong." To his way of thinking, "if neither the company is on the defensive with clients, nor the clients with the company, everything is much simpler."
An alternative tactic
"I don't know how many visits I have on the website, nor if the clients in Barcelona are married or how old they are. This information ends up limiting you when it comes to making decisions," insists Serrahima. The head of Pepephone is critical of the fact that many companies in the sector "have decided that it is more profitable putting a permanence clause in the contract rather than working every day to keep the client.
This means that "instead of trying to keep all of the clients happy once you have them, what they find more profitable is waiting and calling them when they want to leave to bribe them with something," laments Serrahima. In his opinion, "you insult the clients who are with the company because you treat them worse than those who are not or who want to leave; and you also insult those who want to leave because you are telling them that you have been charging for something when you could have offered them something better."
Despite recognising that these can be "very profitable" strategies, Pedro Serrahima insists that "we have shown that we can be, too. We have 20 employees and we compete with companies that have thousands. We are probably the most profitable company in Spain and we do it by using normal strategies."
And it is true that, "all of us know as people what is good and what is bad. If I call you and I con you, you might accept it if the offer is interesting, but you know that I am conning you and the person calling also knows it. We believe that it is better to avoid this and to do things normally."
The 4G changes
Pepephone is a Mobile Virtual Network Operator (MVNO), in other words, it does not have a concession to a frequency spectrum. Thus, it does not have its own radio network and has to use the coverage of another company with whom it has an agreement. It had an agreement with Vodafone until a few months ago, when it migrated its clients over to Movistar coverage. The reason? To provide access to 4G.
"We had an agreement with Vodafone in which it had to give us 4G, but the large operators decided to keep it for themselves. In fact, today almost no MVNO has 4G," laments Serrahima. "We understood that we could access 4G because of the contract and we took it to court. Vodafone didn't think we would be brave enough to do it, because if we did not win the case we would surely have to close down. But we did it; it was a question of principle," he says.
In the end, they arrived at an agreement with Movistar and have had to face the challenge of changing network. "When you have 500,000 clients with Vodafone coverage, perhaps some do not want Movistar. It was unavoidable. It is tough but we had to do it so that our clients can have 4G".
The challenge of electricity
After the success with mobile telephones, the company's latest challenge is to repeat the formula in the electricity supply sector, and since September 30 PepeEnergy has been available. "We also looked at the banking sector, but it was frightening and so we decided to start with electricity," says Serrahima. "The same Pepephone people have done it, almost in our free time. It is a market that is perfectly designed so that no one can get into it," he says, highlighting that "if you are a small company, you have little margin and it is so regulated that you almost can't do anything."
In all, compared with Pepephone, PepeEnergy has no great expectation of earning large profits. "If everything goes well, perhaps we will earn 15,000 or 20,000 euros a month; while with Pepephone we make more than a million," admits Pedro Serrahima. In fact, they almost see it as a sideline in which they continue to apply their business principles. "We think that as longas we are in it we won't lose money, we like the idea of trying it out and so we will give it a go so that people see what competition in the electricity supply sector is like," he concludes.