The telecom companies have always followed an increase trajectory in the past decade through increase in client base as well as adding considerable numbers to their annual revenue. They have got kept the interest rate with all the competitors and also have totally game with great results in the past. But in the recent times, these are facing by having an enormous challenge of adaptation towards the matured, highly penetrated markets in conjunction with global recessionary effect. Therefore, a transfer of paradigm to adapt their business models to the present scenario is highly required and the need for the hour is the customer experience management to achieve a better retention ratio.
Challenge in modern telecom industry - Customer retention
In the modern day telecom industry which has attained high penetration level, obtaining a customer is getting even costlier. Industry analysis claims that only 25% with the acquired customers stick with the company after an year's serious amounts of while on an average only 20 -30% of the entire usage is revenue earning/profitable customers. This dugs an in-depth hole in the balance sheet with the telecom agencies. As a result of churning aftereffect of the customers can use, there is a huge imbalance created in gross additions in the customers and net addition.
Forward path: Way to customer retention - Customer experience management
Therefore, the key challenge for your telecom operators around the globe is managing customer churn. It affects profitability of the company in case a customer churns before the company can earn back it it incurred in acquiring the customer. Therefore, it's very 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 companies need to define their business logic for identification from the revenue earning customers, for example: absolutely free themes with usage a lot more than ARPU are called high valued customers, or even in the event of pre-paid, customers recharging greater than INR 250 a month (In Indian scenario) are believed as revenue earning. With respect to the business rules the entire subscriber base has 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. This can be achieved with the aid 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 customers are so very important.
Emphasizing customers as opposed to products
In the last years, the telecom agencies have dedicated to introduction of recent products. They have originated new products/services after which sought to locate or create a niche for them. But increased competition among the existing service providers minimizing barrier to entry for brand new players has led to the increase in predatory activities in the telecom industry. Moreover, the price tag on acquiring clients has grown considerably. Hence, in the current times, there is a gradual transfer of focus from introduction of the latest products for acquiring customers to customers' experience management is observed. Currently, the Telco's must give full attention to retaining the present 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 obtain its existing customer's perspective in making product decisions and designing promotional offerings. They've got focused on retention by placing equal weight for renewals and acquisitions. With that the corporation has reduced its churn figure to half of its existing number.
Nintendo has generated a web based community for capturing customer insights and offers incentives in exchange of customer information. With that Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
There's an underlying assumption how the providers will dictate the future of telecommunication products. However with the growing bargaining power the customers can use, there exists a transfer of paradigm and also the agencies have to customize their model determined by individual customer preferences. Currently the business follows charge of the customers in designing and promoting services that will meet specific needs from the customers. Under this circumstance, the service providers must get the unique needs of the person customers, and after that make an effort to develop services which satisfy those multifaceted needs.
With this particular model, the mass marketing gives approach to the customized general market trends along with the survival from the agencies is dependent upon their capacity to meet customer's demand while on an ongoing basis. In other words, customers will dictate the tos they intend to receive.
Developing multiple channels
The providers must develop multiple channels for sales and support to boost the client experience. Increasing the footprint with the addition of on shops is one of the options that this telecom companies have practiced since ages. Traditional channels like sales departments also ended up in focus. Using the surge in competition and economic slowdown, the operators are searching for economical ways to serve their clients while keeping the service quality intact. Eventually the agencies would like to move tastes its sales and services online over the web to achieve better economics. In addition to attaining an economical solution by relocating to web channels, the operators can empower the customers can use to execute various activities in a less costly price compared to the retail channels.
Online channels, a customer is capable of doing a number of activities like:
- Bill viewing and internet-based payment
- Online register of a complaint for support
- Altering price plan and subscriptions
- Viewing the merchandise catalogue and buy products/services online
As well as the above mentioned activities, the operators can offer promotional services and cross-sell other products on the internet. The operators can have added revenue by ticker management on their own websites and advertisements.
To supply the shoppers a frequent and connected experience, the operators have to integrate each of the existing channels. When a customer walks-in to some shop, the consumer service representative should be able to retrieve his/her past interactions total the channels for everyone him/her in the best possible way.
The operator must analyze/monitor what sort of customers start using these channels. With regards to the available data of customers' using of these channels, the operators can know the preferences of the baby customers and mould their offering accordingly. By this the operators can build up customer experience by empowering them to perform activities and thus enhancing the service value for many years.
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