The telecom companies have always followed a rise trajectory previously decade through rise in subscriber base and also adding considerable numbers on their annual revenue. They have got kept the speed together with the competitors and have played the game with great results in the past. However in the current times, these are facing with the enormous challenge of adaptation towards the matured, highly penetrated markets along with global recessionary effect. Therefore, a change in paradigm to evolve their business models for this scenario is highly required as well as the need of the hour may be the customer experience management to achieve a better retention ratio.
Challenge in modern telecom industry — Customer retention
In the modern day telecom industry containing attained high penetration level, getting a customer is becoming even costlier. Industry analysis states that only 25% from the acquired customers stick with the business after an year’s time and by using an average only 20 -30% of the entire customer base is revenue earning/profitable customers. This dugs an in-depth hole in the balance sheet of the telecom service providers. Because of the churning aftereffect of the customers, 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 to the telecom operators around the globe is managing customer churn. It affects profitability with the company if the customer churns prior to the company can earn back a purchase it incurred in getting the consumer. Therefore, it is extremely 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 customer base
2. Handling the customer experience and customer value for that revenue earning customers
Identifying the Revenue earning customers
The telecom providers must define their business logic for identification in the revenue earning customers, as an example: absolutely free themes with usage greater than ARPU are classified as high valued customers, or in case of pre-paid, customers recharging greater than INR 250 each month (In Indian scenario) are believed as revenue earning. With respect to the business rules the entire 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. Accomplished with the help of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
Following the identification in the valued/revenue earning customers, managing those identified band of company is very important.
Focusing on customers as opposed to products
In the last years, the telecom companies have targeting introduction of latest products. They’ve got originated new products/services and then sought to locate or create a marketplace for them. But increased competition one of the existing service providers and lower barrier to entry for first time players has led to the expansion in predatory activities from the telecom industry. Moreover, the price of purchase of new customers has expanded considerably. Hence, in the modern times, there is a gradual transfer of focus from introduction of new products for acquiring customers to customers’ experience management is noted. Currently, the Telco’s should focus on retaining the prevailing valued customers and targeting more wallet share of each one customer by creating more value and improved customer experience.
As an example: In UK, O2 has aligned its functional silos to obtain its existing customer’s perspective in making product decisions and designing promotional offerings. They’ve got dedicated to 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 generated a web based community for capturing customer insights while offering incentives in turn 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 this service providers will dictate the future of telecommunication services and products. However with the growing bargaining power of the shoppers, there is a shift in paradigm and also the companies must customize their model based on individual customer preferences. Currently the business follows charge from the customers in designing and promoting services designed to meet specific needs with the customers. Under this circumstance, the companies need to identify the unique needs of the individual customers, then make an effort to develop services which satisfy those multifaceted needs.
With this particular model, the mass marketing gives strategy to the customized researching the market as well as the survival in the providers depends on send out capacity to meet customer’s demand by using an ongoing basis. Put simply, customers will dictate the service terms they intend to receive.
Developing multiple channels
The providers must develop multiple channels for sales and support to further improve the client experience. Increasing the footprint by adding on retail outlets is probably the options that the telecom agencies have practiced since ages. Traditional channels like call centers also have been in focus. Together with the increase in competition and economic slowdown, the operators are trying to find economical approaches to serve their potential customers and the service quality intact. Eventually the providers would want to move tastes its sales and services online from the web to achieve better economics. Besides attaining an economical solution by relocating to web channels, the operators can empower the shoppers to perform various activities at a much cheaper price as opposed to retail channels.
Online channels, an individual are capable of doing a host of activities such as:
- Bill viewing an internet-based payment
- Online register of an complaint for support
- Altering price plan and subscriptions
- Viewing the product catalogue and get products/services online
As well as the previously referred to activities, the operators can offer promotional services and cross-sell other products over the web. The operators might have added revenue by ticker management on their own websites and advertisements.
To provide the customers a consistent and connected experience, the operators have to integrate all the existing channels. Every time a customer walks-in to a store, the customer service representative are able to retrieve his/her past interactions over all the channels to serve him/her inside the most effective way.
The operator should analyze/monitor how the customers begin using these channels. Depending on the available data of customers’ usage of these channels, the operators can identify the preferences of the people customers and mould their offering accordingly. By this the operators can take shape up customer experience by empowering these to perform activities and so helping the service value for many years.
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