Windstream Communications: A Rural Broadband Leader Extends Its Incumbent Market Position

Local exchange carrier Windstream Communications was created in 2006 when Alltel spun off its wireline business and merged it with Irving, Texas-based VALOR Communications Group. Headquartered in Little Rock, Arkansas, Windstream entered the telecommunications market with approximately 3.4 million access lines in 16 states, 8,000 employees, and $3.4 billion in annual revenues. It is a major wireline competitor focused on the rural United States and provides voice, broadband and entertainment services.

Facing little to no competition from other regional telcos, Windstream enjoys a strong incumbent position in its markets. The company uses this advantage to focus on differentiating its DSL service from rival cable offerings by delivering a more user friendly, cost-effective broadband service.

Windstream has built solid relationships with its rural customers and has introduced more than 400,000 consumers to broadband. The company is continuing to expand its broadband base by making substantial investments in its DSL infrastructure. For example, Windstream has introduced 6-megabit delivery capabilities that will significantly increase the speed with which consumers can access and download information from the Internet. The company also plans to further expand the availability of broadband in 2006 by increasing access line addressability to more than 80 percent.

The Challenge: Serving Non-Technical Customers
The big challenge in growing the broadband market—for Windstream and for any telco—is to effectively serve the needs of customers who are relatively non-technical. “The ability to deliver high-quality broadband service is key to our success,” says Dave Fritz, Windstream’s Senior Vice President of Information Technology. “We’ve passed the point where our typical customers were techies who wanted high-speed access to do the latest and greatest things online. We’ve now moved into adoption by a customer base that includes my mother, who knows very little about what to do with her PC.”

By “high-quality broadband service, ”Windstream means two things: the reliability of the delivery network and a very high level of customer service.

The company meets those two demands through the professionalism of its operations people and through the use of technology from Austin, Texas-based Motive, a leading supplier of broadband management software. Among other benefits, Motive software automatically diagnoses and resolves common customer service issues, ensuring a more satisfying user experience. In addition, Motive software allows Internet service representatives (ISRs) at Windstream’s call center to provide better service to customers when they do need to call for help by providing them with data to quickly pinpoint and resolve issues.

Partnership Approach Speeds Successful Implementation
Windstream chose Motive after a nine-month study of broadband service delivery challenges and available management solutions. Based on this research, Windstream invited Motive and another software vendor to submit proposals. Each competed vigorously for Windstream’s business, but in the end, Windstream chose Motive, in large part because of the company’s proven results with other broadband providers and its ability to act as a true partner throughout the software implementation process.

Fritz recalls: “Motive worked creatively to find the appropriate solution that really was successful for both companies. They believed so strongly in what their software could do for us that they approached this project as a true partner, and made a significant commitment to ensuring our success. As part of the implementation process, we gave the Motive team access to the group president of our company to help clear any roadblocks that could interfere with a successful implementation.”

The Motive partnership worked so well that Windstream’s implementation was completed on schedule, in January 2005.Windstream was more than satisfied that Motive not only met, but exceeded its commitments.

Business Benefits Exceed Expectations
The business benefits of the Motive solution also exceeded Windstream’s expectations. The original business case had projected that Motive’s self-service software would eliminate 25 percent of calls per month; in 2005, the actual percentage was 38 percent. In addition, Motive also exceeded projections on the number of customers that each ISR could assist on a monthly basis. With Motive, call-handling capacity was 125 percent higher, and nearly double original business case estimates.

On average, each of Windstream’s 253,000 non-Motive-enabled customers makes 1.75 calls per month to the call center, while each of the 144,000 Motive-enabled customers makes less than one-half of a call per month. “That 4:1 ratio has a significant impact on the quality of service for our customers and on the number of service representatives we need,” says Fritz.

As welcome as those numbers were, Windstream wanted to confirm that it was actually the Motive solution that was responsible for those improvements.

Fritz explains: “We carefully considered other factors. But we concluded that there is essentially no other difference between a Motive customer and a non-Motive customer. They use the same network and, for the most part, the same PCs, so we have concluded that most of that 4:1 difference is to Motive’s credit. In other words, Motive is delivering a better experience for our customers.”

Motive software was also able to help Windstream streamline the work of its ISRs. One recent analysis found that in February 2006, each ISR, on average, could handle 50 percent more accounts than in January 2005. Fritz concluded that a combination of process improvements and Motive’s software helped make service representatives more effective in their phone calls.

The Business Case for Automated Management
Windstream’s decision to design Motive’s management automation software into its broadband offerings was the culmination of a multi-year process. In 2003, the company studied ways to improve the customer service experience and efficiently manage ISR headcount growth. As a result, Windstream built a business case for using management automation to help achieve both of these objectives.

“Specifically we looked at the cost of calls into our call center, the number of calls we were receiving, and the number of representatives that we needed to support those calls,” says Fritz. “We also looked at our truck rolls—how many times we needed to dispatch trucks to resolve problems.”

Windstream recognizes that delivering high-quality service is its top priority, and never stops looking for ways to serve its broadband customers better. Some ideas are big breakthroughs, while some are incremental improvements. A key criterion is that they all contribute to Windstream’s ability to attract and retain customers long-term. For example:

• Producing an improved installation CD for customer service technicians.
• Repackaging the self-installation kit for broadband customers— making the user experience more positive and successful.
• Developing additional workflows that drive self-service capabilities to help customers improve the performance of their PCs when accessing and utilizing broadband services.
• Rolling out interactive chat functionality as an alternative way for broadband customers to ask for assistance. In the first six months that the service was available, customers used it 13,000 times.

“In its consultative role, Motive helped us achieve these and other improvements,” says Fritz. “Expertise was a major reason we selected Motive. It has proven to be a wise choice.”

To ensure all its customers enjoy a quality service experience, Windstream strives to increase adoption of Motive’s automated management solutions. Currently, all new broadband customers receive an installation disk that contains Motive software. In addition, Windstream is working to encourage approximately 200,000 legacy broadband customers to adopt Motive technology. For example, whenever an ISR helps a customer over the phone, the representative briefly explains how to download the Motive solution or how to use it on Windstream’s portal.

There is tremendous profit leverage in the Motive adoption rate. Going forward, if Windstream can cut the number of customer phone calls in half, it will have a significant impact on the company’s cost base, while also improving the customer experience and the quality of its service.

But cutting calls isn’t Windstream’s only objective. In the future, Windstream wants to use Motive’s diagnostic capabilities to gather even more data about the customer’s processing environment—such as the kinds of modems consumers are using—to help ISRs resolve service issues more efficiently and effectively. The company also plans to integrate Motive with its contact-tracking system in order to analyze call patterns and discover additional ways to serve its customers better.

In addition, Windstream is looking more closely at home networking services, which are increasingly attractive to its customer base. “Setting up a wireless network within somebody’s home always sounds so easy,” says Fritz. “But it turns out to be very difficult, and we believe that Motive will be able to help us there.”

Merging Two Software Franchises
VALOR, which was also a Motive customer, streamlined its broadband activation process using Motive software. Windstream is now in the process of integrating its Motive-based broadband management solution with VALOR’s automated activation solution. “We see this as a real opportunity to extend our use of Motive for customer service in the VALOR market,” says Fritz. “And we hope to achieve the same types of benefits there that we’ve seen with our own customer base.”

As broadband services increase in importance to Windstream’s business, the company plans to expand its efforts to improve the broadband customer’s experience. “Delivering a highly-differentiated customer experience is crucial to the growth of business,” says Fritz. “Broadband is unfamiliar to most customers, and sometimes it’s confusing. Motive has helped us improve the consumer experience. So, while we’re very happy about our financial savings, we’re at least as happy, if not more so, about the ability to attract and retain loyal customers.”