Hoff Lynggaard posted an update 4 months, 1 week ago
The telecom service providers usually have followed a rise trajectory before decade through rise in subscriber base in addition to adding considerable numbers to their annual revenue. They have got kept the interest rate together with the competitors and possess played the game with amazing success in the past. But in the recent times, they are facing having an enormous challenge of adaptation towards the matured, highly penetrated markets in conjunction with global recessionary effect. Therefore, a transfer of paradigm to evolve their business models to the present situation is highly required and the demand for the hour may be the customer experience management to accomplish a higher retention ratio.
Challenge in modern telecom industry – Customer retention
Nowadays in this day telecom industry that has attained high penetration level, getting a customer gets even costlier. Industry analysis claims that only 25% in the acquired customers stay with the corporation after an year’s some time to by using an average only 20 -30% in the entire customer base is revenue earning/profitable customers. This dugs an in-depth hole from the balance sheet in the telecom providers. Because of the churning aftereffect of the customers, there exists a huge imbalance created in gross additions with the customers and net addition.
Forward path: Approach to customer retention – Customer experience management
Therefore, the major challenge to the telecom operators around the globe is managing customer churn. It affects profitability from the company in case a customer churns ahead of the company can earn back an investment it incurred in acquiring the client. Therefore, it’s very necessary to indentify the profitable customers and retain them.
Retaining the profitable customers includes 2 steps:
1. Identifying the revenue earning customers from your entire usage
2. Managing the customer experience and customer value for your revenue earning customers
Identifying the Revenue earning customers
The telecom service providers have to define their business logic for identification from the revenue earning customers, for instance: the customers with usage greater than ARPU these are known as high valued customers, or perhaps case of pre-paid, customers recharging over INR 250 monthly (In Indian scenario) are viewed as revenue earning. With regards to the business rules the whole customer base must be segmented into revenue earning customers and non-revenue earning customers. Managing customer ARPU Average revenue per customer. Managing customer data in scale of 40 – 50 millions is often a challenge. They can do this with the help of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
Following the identification of the valued/revenue earning customers, managing those identified number of customers are of utmost importance.
Focusing on customers rather than products
During the last years, the telecom agencies have dedicated to introduction of the latest products. They’ve originated new products/services and then sought to locate or develop a industry for them. But increased competition one of many existing agencies reducing barrier to entry for brand spanking new players has led to the increase in predatory activities in the telecom industry. Moreover, the cost of acquiring customers has grown considerably. Hence, in the current times, you will find there’s gradual shift in focus from introduction of new products for acquiring new customers to customers’ experience management is noted. Currently, the Telco’s need to give full attention to retaining the present valued customers and targeting more wallet share of each one customer by creating more value and improved customer experience.
By way of example: In UK, O2 has aligned its functional silos to acquire its existing customer’s perspective in making product decisions and designing promotional offerings. They have got focused on retention by placing equal weight for renewals and acquisitions. From this the company has reduced its churn figure to 1 / 2 of its existing number.
Nintendo has generated an online community for capturing customer insights and will be offering incentives in turn of customer information. With that Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
It has an underlying assumption that the companies will dictate the future of telecommunication services. But the growing bargaining strength of absolutely free themes, you will find there’s transfer of paradigm as well as the companies have to customize their model according to individual customer preferences. The business will follow charge with the customers in designing and promoting services that will meet specific needs in the customers. Under this circumstance, the service providers should get the unique needs of the baby customers, and then try to develop services which satisfy those multifaceted needs.
Using this model, the mass marketing gives way to the customized survey as well as the survival from the companies depends on their ability to meet customer’s demand by using an ongoing basis. Quite simply, customers will dictate the tos they mean to receive.
Developing multiple channels
The providers need to develop multiple channels for sales and support to boost the buyer experience. Improving the footprint by adding on stores is among the options that this telecom agencies have practiced since ages. Traditional channels like sales departments also was in focus. Together with the boost in competition and economic slowdown, the operators are searching for economical solutions to serve their clients and keep the service quality intact. Eventually the service providers wish to move tastes its sales and services online from the web to realize better economics. Besides attaining an inexpensive solution by moving to web channels, the operators can empower the customers can use to complete various activities at the less costly price as opposed to retail channels.
Over the web channels, an individual are able to do a host of activities like:
– Bill viewing and internet based payment
– Online register of a complaint for support
– Altering price plan and subscriptions
– Viewing the product or service catalogue and buying products/services online
Besides the above mentioned activities, the operators may offer promotional services and cross-sell other products over the web. The operators can have added revenue by ticker management on their own websites and advertisements.
To supply the customers a frequent and connected experience, the operators should integrate all of the existing channels. When a customer walks-in into a retail outlet, the buyer service representative are able to retrieve his/her past interactions over everything the channels to offer him/her in the most beneficial way.
The operator has to analyze/monitor what sort of customers start using these channels. With respect to the available data of customers’ using these channels, the operators can get the preferences of the individual customers and mildew their offering accordingly. With this the operators can build up customer experience by empowering these to perform activities and therefore enhancing the service value to them.
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