Hoff Lynggaard posted an update 11 months, 1 week ago
The telecom companies have always followed a growth trajectory before decade through surge in customer base in addition to adding considerable numbers on their annual revenue. They’ve got kept the pace with all the competitors and have played the game with great results during the past. But also in the current times, they may be 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 for this situation is highly required and also the necessity of the hour is the customer experience management to accomplish a higher retention ratio.
Challenge in modern telecom industry – Customer retention
In the current day telecom industry which has attained high penetration level, having a customer becomes even costlier. Industry analysis states that only 25% with the acquired customers keep with the organization after an year’s some time and while on an average only 20 -30% of the entire usage is revenue earning/profitable customers. This dugs an in-depth hole from the balance sheet of the telecom agencies. Because of the churning effect of the shoppers, there is a huge imbalance made in gross additions from the customers and net addition.
Forward path: Approach to customer retention – Customer experience management
Therefore, the most important challenge for that telecom operators around the globe is managing customer churn. It affects profitability from the company if a customer churns prior to the company can earn back it it incurred in establishing the consumer. Therefore, it is rather important to indentify the profitable customers and retain them.
Retaining the profitable customers includes 2 steps:
1. Identifying the revenue earning customers from the entire customer base
2. Managing the customer experience and customer value for your revenue earning customers
Identifying the Revenue earning customers
The telecom providers have to define their business logic for identification in the revenue earning customers, for example: the customers with usage more than ARPU are high valued customers, or in the event of pre-paid, customers recharging more than INR 250 each month (In Indian scenario) are believed as revenue earning. With regards to the business rules your entire usage 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 can be a challenge. This can be accomplished with the aid of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
Following your identification from the valued/revenue earning customers, managing those identified band of clients are most important.
Centering on customers as opposed to products
In the last years, the telecom agencies have targeting introduction of the latest products. They have originated new products/services then sought to locate or create a market for them. But increased competition one of the existing service providers reducing barrier to entry for first time players has resulted in the expansion in predatory activities in the telecom industry. Moreover, the price tag on acquiring clients has expanded considerably. Hence, in the current times, you will find there’s gradual change in focus from introduction of new products for acquiring clients to customers’ experience management is observed. Currently, the Telco’s have to concentrate on retaining the present valued customers and targeting more wallet share of each and every customer by making more value and improved customer experience.
As an example: In UK, O2 has aligned its functional silos to get its existing customer’s perspective to make product decisions and designing promotional offerings. They’ve focused on retention by putting equal weight for renewals and acquisitions. By this the corporation has reduced its churn figure to 50 % of its existing number.
Nintendo has produced a web based community for capturing customer insights and will be offering incentives in exchange of customer information. With that Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
There is an underlying assumption the service providers will dictate not able to telecommunication services. However with the growing bargaining power the shoppers, you will find there’s shift in paradigm along with the providers must customize their model depending on individual customer preferences. The actual business follows control from the customers in designing and promoting services meant to meet specific needs with the customers. Under this circumstance, the agencies need to identify the unique needs of the person customers, and then try and develop services which satisfy those multifaceted needs.
Developing multiple channels
The providers have to develop multiple channels for sales and support to further improve the customer experience. Enhancing the footprint by having on stores is one of the options which the telecom companies have practiced since ages. Traditional channels like sales departments also was in focus. Using the increase in competition and economic slowdown, the operators are trying to find economical approaches to serve their clients and keep the service quality intact. Eventually the service providers wish to move tastes its sales and services online with the web to attain better economics. Aside from attaining an inexpensive solution by transferring to web channels, the operators can empower the shoppers to complete various activities with a less expensive price compared to the retail channels.
Online channels, a person are capable of doing quite a few activities such as:
– Bill viewing and internet-based payment
– Online register of a complaint for support
– Altering price plan and subscriptions
– Viewing the item catalogue and purchase products/services online
Beyond the previously listed activities, the operators will offer promotional services and cross-sell other products online. The operators might have added revenue by ticker management on his or her websites and advertisements.
To deliver the customers an even and connected experience, the operators need to integrate each of the existing channels. When a customer walks-in with a retail outlet, the client service representative can retrieve his/her past interactions total the channels for everyone him/her inside the very best way.
The operator should analyze/monitor how a customers start using these channels. Based on the available data of customers’ using these channels, the operators can know the preferences of the people customers and mould their offering accordingly. With this the operators can build up customer experience by empowering these phones perform activities and for that reason helping the service value in their mind.
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