The telecom companies usually have followed an improvement trajectory during the past decade through increase in subscriber base and also adding considerable numbers on their annual revenue. They've kept the interest rate with the competitors and also have totally game with amazing success before. But in the latest times, these are facing with an enormous challenge of adaptation to the matured, highly penetrated markets coupled with global recessionary effect. Therefore, a shift in paradigm to evolve their business models for this scenario is highly required as well as the need for the hour is the customer experience management to accomplish an increased retention ratio.
Challenge in modern telecom industry - Customer retention
In the modern day telecom industry that has attained high penetration level, having a customer is becoming even costlier. Industry analysis states that only 25% of the acquired customers stick to the company after an year's serious amounts of with an average only 20 -30% from the entire client base is revenue earning/profitable customers. This dugs an in-depth hole in the balance sheet of the telecom providers. Because of the churning effect of the shoppers, there's a huge imbalance created in gross additions of the customers and net addition.
Forward path: Way to customer retention - Customer experience management
Therefore, the major challenge for your telecom operators around the globe is managing customer churn. It affects profitability from the company if the customer churns ahead of the company can earn back an investment it incurred in obtaining the consumer. Therefore, it is rather necessary to indentify the profitable customers and retain them.
Retaining the profitable customers includes 2 steps:
1. Identifying the revenue earning customers from the entire client base
2. Managing the customer experience and customer value to the revenue earning customers
Identifying the Revenue earning customers
The telecom providers should define their business logic for identification of the revenue earning customers, for instance: the customers can use with usage more than ARPU are high valued customers, or perhaps in case of pre-paid, customers recharging a lot more than INR 250 per month (In Indian scenario) are viewed as revenue earning. With respect to the business rules the whole client 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 can be a challenge. Accomplished by using various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
Following the identification with the valued/revenue earning customers, managing those identified band of industry is most important.
Centering on customers as opposed to products
Over the past years, the telecom providers have focused on introduction of the latest products. They've got originated new products/services then sought to locate or create a niche for them. But increased competition one of the existing companies reducing barrier to entry for first time players has triggered the growth in predatory activities in the telecom industry. Moreover, the price tag on buying of new customers has expanded considerably. Hence, in the current times, there is a gradual transfer of focus from introduction of new products for acquiring new clients to customers' experience management is noted. Currently, the Telco's must pay attention to retaining the existing valued customers and targeting more wallet share of each and every customer by making more value and improved customer experience.
For instance: In UK, O2 has aligned its functional silos to get its existing customer's perspective to create product decisions and designing promotional offerings. They've focused on retention by putting equal weight for renewals and acquisitions. From this the organization has reduced its churn figure to 1 / 2 of its existing number.
Nintendo has established an internet community for capturing customer insights and offers incentives in return of customer information. By this 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 products and services. But the growing bargaining power the shoppers, there's a change in paradigm along with the agencies need to customize their model based on individual customer preferences. Now the business will observe control of the customers in designing and promoting services that will meet specific needs from the customers. Under this circumstance, the agencies have to find out the unique needs of the baby customers, after which try and 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. Enhancing the footprint by having on retail outlets is amongst the options which the telecom service providers have practiced since ages. Traditional channels like sales departments also was in focus. Together with the rise in competition and economic slowdown, the operators are searching for economical methods to serve their clients whilst keeping the service quality intact. Eventually the companies would want to move most of its sales and services online over the web to attain better economics. Aside from attaining a cost effective solution by moving to web channels, the operators can empower the customers can use to complete various activities in a much cheaper price as opposed to retail channels.
On the internet channels, a client are capable of doing a host of activities like:
- Bill viewing and online payment
- Online register of an complaint for support
- Altering price plan and subscriptions
- Viewing the merchandise catalogue and purchase products/services online
Besides the previously listed activities, the operators will offer promotional services and cross-sell other products online. The operators can have added revenue by ticker management on his or her websites and advertisements.
To supply absolutely free themes a consistent and connected experience, the operators have to integrate all of the existing channels. When a customer walks-in with a retail outlet, the buyer service representative can retrieve his/her past interactions over-all the channels to provide him/her from the most beneficial way.
The operator needs to analyze/monitor how a customers begin using these channels. Based on the available data of customers' use of these channels, the operators can know the preferences of the individual customers and mould their offering accordingly. From this the operators can take shape up customer experience by empowering them to perform activities and for that reason helping the service value to them.
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