When media company British Sky Broadcasting announced plans in July 2014 to buy Sky Italia for £2.45 billion from its own largest shareholder, Rupert Murdoch’s 21st Century Fox, analysts in the City of London were quick to question the value of the deal.
During the most difficult years of Italy’s economic crisis, they pointed out, Sky Italia had struggled to maintain subscriber numbers and revenues. And the move would see BSkyB moving into a country where fewer householders buy pay-TV and those who do spend less on it, they noted.
But BSkyB went ahead anyway, closing the deal in mid-November 2014 and changing its name to Sky plc, to reflect its new international outlook. (At the same time, it also acquired a majority interest in Sky Deutschland.)
Since then, Sky’s financial results have revealed signs of improvement at Sky Italia, although there is clearly some way to go. In the second quarter, ending 31 December, Sky Italia gained 30,000 new subscribers, its highest growth in 12 quarters, to reach 4.734 million customers. But on an annual basis, this was still down 26 percent from the corresponding 2013 quarter and substantially down on the company’s 2012 peak of 5 million subscribers.
On the positive side, customer churn fell to 10 percent, down from 13.1 percent in Q2 of the previous year.
The pressure is now on for Sky Italia not only to keep signing up new subscribers, but also keep its existing customer base happy.
With those two goals in mind, it embarked last year on a strategy to give its customer acquisition, customer service and change order management processes a cloud-based makeover, explains Sky Italia chief technology officer Umberto Angelucci.
The first stage, he says, involved an implementation of Salesforce.com to speed up the process of customer acquisition - tracking leads and closing deals - through field sales, telesales, partners and online channels. That implementation went live in July 2014.
Deciding how to deal with customer service and change order management was more tricky, he says. The discussions began shortly after Sky Italia went live with Salesforce.com and took three or four months:
For our go-to-market strategy, we’d used Salesforce. But, in our business, customer service and change order [management] is much more complex than customer acquisition. What we wanted, in particular, was to become more efficient and to reduce customer call times and we knew that would require us to change the user interface and reduce the steps that call centre agents need to take, without having to navigate a lot of screens.
Here, for this part of our business transformation, we decided it was better to put the budget required to make these changes into a different solution. In particular, we evaluated the importance to us of a vertical solution, rather than a more horizontal solution like Salesforce - and that’s how we discovered Vlocity.
Sky Italia has many industry-specific needs, it was agreed, and would get more coverage, in terms of features and functions, by choosing cloud apps designed for the communications market, rather than going to the effort of customising a more horizontal offering to fit its processes. After three months of consideration, a decision was made, says Angelucci:
We considered time-to-market and we considered flexibility, as well as the key features and capabilities our system needed to have, and we decided on Vlocity.
The deal between Vlocity and Sky Italia was announced by the cloud apps provider this week at Mobile World Congress in Barcelona. The Vlocity Communications solution is built on the Salesforce1 platform and will be implemented at Sky Italia by Deloitte Digital, the management consultancy’s digital arm.Vlocity’s cloud apps will give Sky Italia customer service agents a unified service console that offers them a complete view of each individual customer, including their active services, billing and service interaction history. The apps will provide clear actions and workflows for agents to follow in resolving customer inquiries, with the goal of shrinking resolution times. And they will integrate closely with Sky Italia’s legacy Siebel CRM system.
Once in place, Vlocity Communications will assist more than 5,000 contact centre agents and store-based users in handling more than 30 million inbound customer interactions per year.
Getting to that point will take some time. Sky Italia plans to go live with its applications for customer service in July this year. Change order management, meanwhile, should be in place by March 2016. Angelucci says:
But once we arrive at the end of that process, we’ll have covered our transformation goals for customer management
By standardising on Vlocity and Salesforce, we now use best-in-class, industry-specific cloud applications to engage our customers in new ways that enhance the customer experience, loyalty and profitability.
As Sky Italia strives to overcome the challenges of its recent past, these are all critical goals for it to pursue - and the company’s new owners will doubtless be tracking its progress against them closely.
Disclosure: at time of writing, Salesforce is a premier partner of diginomica.