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How Virgin Media makes money from customers' phone calls
Introduction - Virgin media hits customers left, right and
centre!
This article explains one of the methods that Virgin Media has
adopted in order to squeeze as much money as possible out of
their customers.
How Virgin Media call centres work
For those that don't know how the call centres work, I will
briefly explain how Virgin is exploiting this:
Virgin obtains an 0800 number from a phone company such as BT(British
Telecommunication). Then once a customer phones that number, the
customer is charged a certain amount(lets say 25 pence per minute as an
example). Out of this 25p about 5p goes to BT and the other 20p goes to
Virgin media. Therefore this is a substantial income for Virgin media
as a company.
How does Virgin Media make money from the customer support lines
(The Virgin Scam)?
So you might think, hang on there, wait a minute, 25p is not that
much. 25p a minute is only going to be 1200p(12.00 pounds) in one hour
and that is how much they pay the call centre staff and cover for the
costs of running the customer support service. But this is where you
are wrong! Let me explain why before you get offended.
1. For the first 1-3 minutes of the phone call you are put through an
automated system where the computer responds, as opposed to an actual
human being. The computer system asks for you to enter your phone
number, however if you do not have a phone number and just cable
internet it will take a long time to get passed this prompt, while you
are being charged.
2. After the first person responds they are very likely to forward you
to another person, this means you will be listening to music while your
phone bill is being charged. So no one is actually busy working during
that time. You are paying 25p per minute to listen to some music which
is not even copyrighted and has no value for you, in fact the quality
is really bad as well.
3. The majority of people who work in call centres are working on
minimum wage which in UK is less than 6.00 pounds an hour. Half of what
they are making from the customers phone bill. Now if you are
redirected to an IT expert or told to phone another number where you
will speak to an expert then that call will be charged much more than
the normal customer support lines. So watch out for that!
4. Some of the call centres are based in India or other countries where
the pay is much less in comparison to London. So even if the call
centres are in Glasgow or Dublin, the employees get paid less than they
would of they same call centre was in London. In countries like India
the conversion rates gives Virgin an amazing saving on these call
centres. So a person working in a call centre in India would get paid
less than 1.00 pound an hour... much less than that in fact but we will
say 1.00 pound an hour for the arguments sake and to make our
calculations easier. This is why when you phone the call centres there
is always people with lots of different accents who are relatively
difficult to understand. Usually understanding different accents is not
a problem, it only requires some time. But when your phone bill is on
the line, you expect to have a clear speaking news reader type of
person on the other side.
So now that you know Virgin is making some money from the customer
support, let's see how much they make:
So how much does Virgin make from each customer phone-in per hour?
According to our generous assumptions in favour of Virgin(e.g. pay
rate in india is much less than 1.00 pound per hour but we want to find
out the absolute minimum that Virgin makes so we have selected a high
end, and easy to calculate wage for Virgin employees)
Initial total received by Virgin: 12.00 pounds (in one hour from only
one phone line)
After paying the employee wage: 11.00 pounds (one employee, for one
hour)
After paying for everything else(Maintenance Services): 10.00 pounds
(e.g. office space in India, electricity bills and office equipment
maintenance)
So if Virgin media has 100 customer support employees (working 40 hours
a week)they will work 160016 hours a month(give or take) and this
translates to 1,600,160.00 pounds a month that's 1.6 million pounds.
Now from the previous information given in point 1 and 2, we know that
all the phone calls are not actively held between the Customer
and a Virgin Support Staff, So those hours that we are kept
behind the line need to be added to the cost(or profit from Richard
Branson's point of view). Most people would agree that customers are
being held 50% of the total duration of their phone call with the
Virgin support team being held or on wait. So we shall add 160016 hours
to our total but these hours do not take into account the payment being
made to staff as the staff would be busy answering another person while
the customer is on hold. We have also already taken into account the
maintenance cost for the support services, So we now have
(160016*10.00) + (160016*12.00) = ... (employee hours * 10.00) + (held
on wait * 12.00)
1,600,160.00 + 1,920,192.00 = ...
3,520,352.00 ... profit in one month
That's about 3.5 Million pounds profit from call centres in a month. In
one year this will be:
3,520,352.00 * 12 = ... profit in one month * number of months in a
year
42,244,224.00 ... Total Profit in one year
42 Million pounds. Gosh! Richard Branson is clever.
Virgin Media do not have any contact details via the web or email
therefore all customers are forced to pay for the phone calls to the
Virgin call centres. Which is exactly why there is no on-line support
service because sending an email on-line is not going to be of any
financial benefit to Richard Branson's Company i.e. Virgin Media.
You might say:
"wait... Virgin media does have an on-line help centre, doesn't it?!"
Yes, it does but it does not work, if you do not believe me go to
virgin media online help centre
and try the "Email us" option. First of all if your email account is
anything at @ntlworld.com then you are not allowed to submit anything.
Here is the proof.
If they have not upgraded your email to the Virgin.net domain name,
there is nothing you can do about it.
However for those lucky few people that have their email addresses
ending with @virgin.net they will progress one step further before
receiving an
error message
indicating that there was an error without much information as to why this error occured!
This is similar how the likes of ITV pop idol and C4 big brother and
Simon Cowell made some good money out of their audience. So Richard
Branson is jumping on the bandwagon as well but he is even more
cunning.
Conclusion
Richard Branson will place all that money in his pocket(without having tax
deducted from it of course, he knows the loopholes of course e.g. investments
in offshore companies) and
refuses to comment on the short comings of the services he provides and
no comments neither about the legality of what he is doing.
Related Links
Read this first article:
Virgin Media: Computer says no.
(proof that Virgin Media have some of the worst customer service in the country)
Plenty of Complaints here against virgin media
also
here
Virgin Media is so bad it makes headlines
Virgin media makes more headlines for being rubbish.
Some people have even dedicated a website to
how bad virgin media is and where it is going wrong.
Have a complaint against Virgin Media? Let us know.
complaint@VirginMediaComplaints.co.uk
