The telecom service providers usually have followed a rise trajectory in the past decade through surge in client base as well as adding considerable numbers on their annual revenue. They have kept the interest rate together with the competitors and still have totally game with amazing success previously. However in the present times, they're facing with the enormous challenge of adaptation for the matured, highly penetrated markets along with global recessionary effect. Therefore, a shift in paradigm to evolve their business models for this situation is highly required and the demand for the hour may be the customer experience management to achieve a greater retention ratio.
Challenge in modern telecom industry - Customer retention
Nowadays in this day telecom industry which has attained high penetration level, acquiring a customer becomes even costlier. Industry analysis states that only 25% in the acquired customers stay with the organization after an year's some time to while on an average only 20 -30% from the entire subscriber base is revenue earning/profitable customers. This dugs a deep hole in the balance sheet of the telecom providers. Due to churning aftereffect of the customers, there is a huge imbalance created in gross additions of the customers and net addition.
Forward path: Method to customer retention - Customer experience management
Therefore, the key challenge to the telecom operators worldwide is managing customer churn. It affects profitability from the company in case a customer churns prior to company can earn back the investment it incurred in establishing the client. Therefore, it's very critical 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 to the revenue earning customers
Identifying the Revenue earning customers
The telecom companies have to define their business logic for identification from the revenue earning customers, as an example: the shoppers with usage greater than ARPU are called 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 considered as revenue earning. Based on the business rules your entire customer base needs to 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 a challenge. This can be achieved by making use of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
Following your identification with the valued/revenue earning customers, managing those identified gang of company is so very important.
Emphasizing customers instead of products
In the last years, the telecom companies have concentrated on introduction of the latest products. They have originated new products/services and then sought to locate or develop a niche for them. But increased competition one of many existing agencies minimizing barrier to entry for brand spanking new players has triggered the development in predatory activities from the telecom industry. Moreover, the price of acquiring customers has risen considerably. Hence, in the current times, there exists a gradual shift in focus from introduction of latest products for acquiring customers to customers' experience management is noted. Currently, the Telco's have to pay attention to retaining the present valued customers and targeting more wallet share of each customer by creating more value and improved customer experience.
For example: In UK, O2 has aligned its functional silos to have its existing customer's perspective for making product decisions and designing promotional offerings. They've devoted to retention by putting equal weight for renewals and acquisitions. From this the corporation has reduced its churn figure to half of its existing number.
Nintendo has generated an online community for capturing customer insights while offering incentives inturn of customer information. With this Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
It comes with an underlying assumption the providers will dictate the future of telecommunication services and products. But the growing bargaining power the shoppers, there exists a shift in paradigm as well as the service providers have to customize their model depending on individual customer preferences. Now the business will observe control from the customers in designing and promoting services intended to meet specific needs in the customers. Under this circumstance, the companies have to know the unique needs of the baby customers, then attempt to develop services which satisfy those multifaceted needs.
Developing multiple channels
The agencies must develop multiple channels for sales and support to further improve the buyer experience. Improving the footprint by having on retail stores is among the options which the telecom service providers have practiced since ages. Traditional channels like telemarketer firms also had been in focus. Using the increase in competition and economic slowdown, the operators are trying to find economical methods to serve their potential customers whilst keeping the service quality intact. Eventually the companies want to move most of its sales and services online from the web to achieve better economics. Apart from attaining an affordable solution by moving to web channels, the operators can empower the shoppers to complete various activities in a less expensive price than the retail channels.
Online channels, a person can perform numerous activities such as:
- Bill viewing and online payment
- Online register of the complaint for support
- Altering price plan and subscriptions
- Viewing the merchandise catalogue and buy products/services online
As well as the previously listed activities, the operators can provide promotional services and cross-sell other products over the web. The operators will surely have added revenue by ticker management on their websites and advertisements.
To offer the customers an even and connected experience, the operators must integrate every one of the existing channels. When a customer walks-in to some retail store, the customer service representative will be able to retrieve his/her past interactions total the channels for everyone him/her from the most effective way.
The operator should analyze/monitor the way the customers utilize these channels. Based on the available data of customers' use of these channels, the operators can identify the preferences of the people customers and mildew their offering accordingly. From this the operators can build up customer experience by empowering them to perform activities and for that reason helping the service value for many years.
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