Why Onstar is a bad business.... an insiders perspective.
Out-sourcing talent, declining customer satisfaction
Got Onstar? If you drive a GM vehicle, surely you HAD a free year, then had to ask yourself one simple question - Should I renew for $200.00 per year? Good question, here's the complex answer.
Onstar started in 1996 with good intentions, creating the first and only telematics business for the automotive industry. Combine existing cellular phone technology with Global Positioning System (GPS) technology to offer a unique array of services to select customers. In 1996, Onstar was only available to the best GM customers, those that drove Cadillacs, then the epitome of GM innovation and high price vehicles. For the first couple years, the operations were provided via a call center in Troy, MI where agents were able to perform requests for customers without restraint. The customers loved having a "personal assistant" at their finger tips.
Fast forward about four years, 2000 to be exact. This is when GM decided that they could offer even more vehicles the "option" of Onstar in their vehicles. The system started to be installed in greater numbers in the Cadillac Escalade -- the reason for a huge ramping up of the business... again, Troy, MI was the best at providing services to the client base via contract through EDS (Electronic Data Systems). Business boomed for the first year of subscription services, one year Premium (Directions and Connections), then renewal rates declined after the initial "free year." Involved in the installation of the Onstar hardware was a hidden cost of $1200-1500 per vehicle, yet the customer was to believe that they were getting Onstar free. Now, ask the customer to pay for what they were getting, and the real story starts to unfold.
Customers call in for a variety of reasons, primarily for directions to their destination. Ask for an obscure business, or residence, and the Onstar agent looks up the information via a computer, then they talk you to your destination. Short routes were provided live, longer routes were given in a route preview format, where the agent gave the directions and encouraged the customer to call back when they got closer to their destination. Simple enough, right? Let's move this to the next level, starting in 2001.
Onstar customers are introduced to a new service provider, unbeknownst to them, Sitel Corporation in Charlotte, NC (CNC). The reaction to this new provider was lukewarm at best. The agents were nowherewhereas capable of providing service, the complaints by the subscriber to Onstar started to skyrocket. Calls for routing that happened to arrive at the CNC call center were quickly disconnected in hopes that the subscriber would get an agent in Troy, MI instead. This occurred so much that Onstar started to collect data on these types of calls, and did nothing to resolve this issue. (Picture that, GM not doing what they should do like fix the problem, hint, this is why the federal government know own 61% of GM). GM looked at things in a big picture framework, and did NOTHING to resolve the problem.
Agents in Troy, MI were originally college educated, thoughtful customer service driven individuals that looked forward to coming to work everyday. Working at Onstar was FUN! Work was looked upon as something that was undertaken with a good attitude, and an attitude of wanting to help customers with their requests. The shift began shortly after EDS made the conscious decision to "cut costs" by changing the hiring structure and hiring standards at the Onstar Call Center. Following the Sitel method in CNC, EDS recruited high-school graduates, paid for less for the agents, adn embarked on a dramatic revolving door of employment, firing, re-hiring, re-training, firing, etc. This is still the case under the new mis-management firm Convergys.
EDS continues to add poorly capable staff to the call center, trains them for small portions of the business, and lets things flounder for a while. Around June 26, 2004 the call center business took a turn for the worse by bringing CONVERGYS Corporation into the equation. If you are not familiar with Convergys, here it is in a nutshell. Convergys reports to administer and support call center businesses by providing agents that take calls at call centers. What this company fails to mention is that they are the largest OUTSOURCING business in the call center arena.... many employee at Convergys in Michigan have said, "Out-thinking,Outdoing, OutSOURCING!"
GM, in 2004, awarded a record $200M contract to Convergys to provide most of the call center support. The system started to fall apart even further with the presumption of the account by Convergys Management from day one. Agents were retained from the previous EDS employement, as these employees are really the core of the business. But the hiring practices are something less than to be desired. GM has maintained an additional corporation, MINACS, in Oshawa, Canada (CSD) to provide some services as well.
Customer satisfaction is slipping to an all time low, and declining every year. Convergys is in "control" of most of the call center business, and makes a big announcement. The company is shifting BILLING and CUSTOMER CARE lines of business (LOB) to the Philippines, at Makati City, Makati, Philippines (MAK). Convergys, as you can research, maintains some of the largest call centers in the Philippines, great to talk to an ESL agent that can't understand what you are calling about. Now, not all the business is shifted to MAK, there is redundancy built in so that some of the business is spread across Troy, MI (later Pontiac, MI) (POC), MAK, CSD, and CNC sites. Customer satisfaction is still low -- fact is, the lower paid employees simply don't care about what they are doing and it is reflected in the business that they support... GM reaction is to create clean-up departments like the "SUBSCRIBER ADVOCATE DEPARTMENT" who deal in calling severely disenfranchised customers to try to smooth things over. Simple answer, do things right the first time, stop all the back-pedaling. How do you do this?
FIRE CONVERGYS! I have many reasons why this Corporation, CONVERGYS, is Bad For Business... want to find out more, come back later, and see what this "management leader" has done to this account in a few short years of mis-direction and mis-management.
Comments are always welcome.
Onstar has made various attempts to create reality for their business. Services ranging from SVS (Stolen Vehicle Slowdown) and ACN (Automatic Crash Notification) are great examples of the GM powers that be attempting to create the "need" for Onstar. Reality is that 99% of all ACN calls are previously reported by passersby, and Onstar is virtually worthless. Sure, they know a crash has happened, their TV ads show such dedication to your safety -- this is simply a ploy to SCARE you into renewing your Onstar subscription.
Is Onstar relevant to today's driver?. NO!
Onstar took great liberty in developing a technology that did not exist, that is credit they deserve. But, Onstar made a fatal mistake when they (management) and friends thought that Onstar was a necessity. Owners of Onstar equipped vehicles have simply replaced Onstar via duplication of their cell phones, for GPS and routing assistance, and fail to justify the cost of renewing and perpetuating Onstar. There was a simple invention of Hands-free Calling, at inflated prices, that allowed for in-vehicle phone calls. Get a Jupiter Jack, pitched by Billy Mays, and use those cell minutes that you already pay for, and forget Onstar and their overpriced bundles of non-refundable minutes....
Many customers of Onstar are quite fed up with the contractual obligations that befall a subscriber to this service. From day one, the new owner of this GM vehicle is forced to endure a sales-pitch by poorly capable BBWC (Blue Button Welcome Call) agents -- their goal, capture your CREDIT CARD information so that GM can force your renewal every month after your initial subscription has expired. You are supposed to read all the fine print of the contract that you "sign" but no one ever does. Countless instances of GM raiding customer credit cards for monthly services happen on a daily basis. Is this deceptive - YES! GM has justified this as a legal loophole, as it is stipulated in your contract, yet you are not informed that your credit card is going to be charged on any specific date. Try to call and cancel, you get connected to another group called Cancel/Save or Cancellation Request in GM verbiage. Their job is to get you to agree to think about cancelling, whereby a SAVE is registered in their daily work log. If you cancel, the agent's personal percentage falls and potentially puts the agents at risk of losing their job. Real nice huh, if you no longer want Onstar, the Cancel/Save department will say or do anything to try to confuse you into keeping your Onstar account active.
Now, let's say you're adament in cancelling, and do so. Now there is the small matter of getting your "automatic renewal" charges applied back to your credit card. Don't expect this in a timely manner -- GM promises to give back your money, on their time shedule. Essentially they keep and use your money to balance their books until your billing date, then give you your money. Nice of GM to waste the time-value of the money that they raided from your credit card without your authorization. Believe me, this is what the average customer experiences in their "free" year of Onstar.
The cancellation and renewal again is transferred to MAK for renewal....
So you think you have an advocate in the HR department -- think again at Convergys. There are far too many weenies running the show - fearful of their inept decisions made in past employment decisions, and failing miserably to raise any bar at the Onstar account in Pontiac Michigan.
Convergys has seen such pull-back in their profit that they have significantly reduced their workforce, by laying off, firing, or reducing hours of dedicated employees to meet the financial needs of their greater parental controlling body, the Convergys Customer Management company of Cincinnati, OH.
The "leadership" on the Onstar Acccount has proven that hiring and firing should be a full time job on an account where retention of employees was the previous focus. Why have employees that stay in their jobs when you can have a revolving door of hiring/fire/re-hire and re-bill the client, GM, for training the same employee over and over and over again.
Convergys is a freak show at best! This is a company of poor performers, placed in positions of "authority" who use every excuse in the book to justify their raping of GM for training, training, training, and the results simply do not match.....
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