Telstra Backflips on Fee for Paying Bills

Telstra, Australia’s largest telecommunications provider, has withdrawn a controversial A$2.20 fee imposed in September for customer payments made over-the-counter or by mail for monthly phone bills.

“This decision has been taken because it is the right thing to do by our customers,” a Telstra spokesman said. Telstra CEO David Thodey announced the decision to cancel the deeply unpopular fee at the company’s annual general meeting last week.

In our Monday Morning Marketing Memo dated 7 September, we wrote “If Mr. Thodey and his colleagues at Telstra are truly serious about improving customer satisfaction across the company, they need to have a serious look at the fees and surcharges that are not only driving customers crazy, but are also driving customers like me away.”

It appears that the senior management of Telstra has listened to customers like me, who spoke out vociferously against the imposition of this new fee, particularly at a time when Telstra’s corporate reputation and customer service levels are both being hammered.

One leading journalist in Australia referred to “the friendless Telstra” in an article last month, while the headline in an article last week read “Telstra arrogance towards customers exposed as Thodey moves on admin fee.”

As Mr. Thodey told the Telstra annual meeting audience, “We tried to impose this charge without first listening to the people it would affect.” He also admitted that the payment fee has caused customers to defect. [Nothing surprising in that!]

Removing this fee is a major first step in renewing customer preference for the Telstra brand. Hopefully Telstra has learned a great lesson about the need to listen to customers and engage its customer base in a proactive, two-way dialogue.

The other critical lesson here is the need for Marketing to have a presence in the Corporate Boardroom. Telstra’s Board is stocked with lawyers, accountants, financial managers and technical experts. Someone with a marketing focus could have easily advised the Telstra Board that this payment fee was not going to be readily accepted by the company’s customer base.