Isaksen Johnson posted an update 2 months, 3 weeks ago
The telecom providers have always followed a growth trajectory before decade through boost in usage along with adding considerable numbers on their annual revenue. They have got kept the speed with the competitors and also have literally game with amazing success previously. In the recent times, they are facing with the enormous challenge of adaptation for the matured, highly penetrated markets coupled with global recessionary effect. Therefore, a transfer of paradigm to adapt their business models to the current scenario is highly required and the need for the hour may be the customer experience management to realize an increased retention ratio.
Challenge in modern telecom industry – Customer retention
In the current day telecom industry which includes attained high penetration level, obtaining a customer becomes even costlier. Industry analysis states that only 25% in the acquired customers stick with the corporation after an year’s time and by using an average only 20 -30% from the entire customer base is revenue earning/profitable customers. This dugs an in-depth hole inside the balance sheet with the telecom providers. Due to churning aftereffect of the customers, you will find there’s huge imbalance created in gross additions of the customers and net addition.
Forward path: Approach to customer retention – Customer experience management
Therefore, the main challenge for the telecom operators around the world is managing customer churn. It affects profitability in the company in case a customer churns prior to the company can earn back an investment it incurred in acquiring the customer. Therefore, it is extremely critical to indentify the profitable customers and retain them.
Retaining the profitable customers includes 2 steps:
1. Identifying the revenue earning customers through the entire usage
2. Managing the customer experience and customer value for the revenue earning customers
Identifying the Revenue earning customers
The telecom agencies must define their business logic for identification with the revenue earning customers, for example: absolutely free themes with usage a lot more than ARPU are classified as high valued customers, or even in the event of pre-paid, customers recharging a lot more than INR 250 per month (In Indian scenario) are viewed as revenue earning. Based on the business rules the complete usage should 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 by using various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
After the identification with the valued/revenue earning customers, managing those identified number of company is most important.
Emphasizing customers as an alternative to products
During the last years, the telecom agencies have dedicated to introduction of the latest products. They have got originated new products/services then sought to get or produce a niche for them. But increased competition among the existing providers minimizing barrier to entry for new players has led to the development in predatory activities inside the telecom industry. Moreover, the expense of buying of new clients has risen considerably. Hence, in the modern times, there exists a gradual shift in focus from introduction of the latest products for acquiring clients to customers’ experience management is noted. Currently, the Telco’s should concentrate on retaining the current valued customers and targeting more wallet share of every customer by making more value and improved customer experience.
By way of example: In UK, O2 has aligned its functional silos to have its existing customer’s perspective to create product decisions and designing promotional offerings. They have devoted to retention by putting equal weight for renewals and acquisitions. With that the organization has reduced its churn figure to half of its existing number.
Nintendo has generated an internet community for capturing customer insights while offering incentives inturn of customer information. From this Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
It has an underlying assumption the agencies will dictate the future of telecommunication products. But with the growing bargaining power the shoppers, there exists a transfer of paradigm and also the companies should customize their model based on individual customer preferences. The business will track control in the customers in designing and promoting services designed to meet specific needs of the customers. Under this circumstance, the service providers need to know the unique needs of the individual customers, then try to develop services which satisfy those multifaceted needs.
Developing multiple channels
The agencies should develop multiple channels for sales and support to improve the client experience. Increasing the footprint with the addition of on shops is among the options that the telecom companies have practiced since ages. Traditional channels like sales departments also was in focus. Using the boost in competition and economic slowdown, the operators are looking for economical methods to serve their clients and the service quality intact. Eventually the companies would want to move majority of its sales and services online through the web to attain better economics. Aside from attaining an affordable solution by relocating to web channels, the operators can empower the customers to do various activities in a much cheaper price compared to retail channels.
On the internet channels, a person can perform numerous pursuits like:
– Bill viewing and internet-based payment
– Online register of your complaint for support
– Altering price plan and subscriptions
– Viewing the merchandise catalogue and buy products/services online
Besides the previously listed activities, the operators can provide promotional services and cross-sell other products over the internet. The operators can have added revenue by ticker management on their own websites and advertisements.
To deliver absolutely free themes a frequent and connected experience, the operators need to integrate all of the existing channels. Every time a customer walks-in to a retail store, the client service representative are able to retrieve his/her past interactions over all the channels to provide him/her from the most effective way.
The operator should analyze/monitor what sort of customers use these channels. Depending on the available data of customers’ using these channels, the operators can identify the preferences of the individual customers and mould their offering accordingly. By this the operators can build up customer experience by empowering these to perform activities and so increasing the service value to them.
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