The telecom companies usually have followed an improvement trajectory in the past decade through surge in usage along with adding considerable numbers on their annual revenue. They have got kept the interest rate together with the competitors and possess unquestionably game with great results before. But also in the latest times, they may be facing with an enormous challenge of adaptation to the matured, highly penetrated markets along with global recessionary effect. Therefore, a shift in paradigm to evolve their business models to the present situation is highly required and also the need of the hour is the customer experience management to attain an increased retention ratio.
Challenge in modern telecom industry - Customer retention
In the current day telecom industry which has attained high penetration level, acquiring a customer is becoming even costlier. Industry analysis claims that only 25% of the acquired customers stick to the organization after an year's time and by using an average only 20 -30% of the entire subscriber base is revenue earning/profitable customers. This dugs a deep hole inside the balance sheet in the telecom agencies. As a result of churning effect of absolutely free themes, there exists a huge imbalance made in gross additions of the customers and net addition.
Forward path: Approach to customer retention - Customer experience management
Therefore, the major challenge to the telecom operators around the globe is managing customer churn. It affects profitability in the company in case a customer churns prior to the company can earn back it it incurred in establishing the customer. 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 your entire subscriber base
2. Handling the customer experience and customer value for your revenue earning customers
Identifying the Revenue earning customers
The telecom providers must define their business logic for identification with the revenue earning customers, by way of example: the customers can use with usage more than ARPU are high valued customers, or even in case of pre-paid, customers recharging greater than INR 250 a month (In Indian scenario) are considered as revenue earning. Depending on the business rules your entire usage 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. This can be achieved with the help of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
Following the identification of the valued/revenue earning customers, managing those identified number of industry is most important.
Centering on customers as opposed to products
Within the last years, the telecom service providers have dedicated to introduction of latest products. They've originated new products/services after which sought to get or build a marketplace for them. But increased competition one of the existing agencies and lower barrier to entry for first time players has ended in the growth in predatory activities from the telecom industry. Moreover, the price of acquiring customers has risen considerably. Hence, in the modern times, there's a gradual shift in focus from introduction of recent products for acquiring customers to customers' experience management is observed. Currently, the Telco's should give full attention to retaining the existing valued customers and targeting more wallet share of every customer by making more value and improved customer experience.
By way of example: In the united kingdom, O2 has aligned its functional silos to acquire its existing customer's perspective to make product decisions and designing promotional offerings. They've got dedicated to retention by putting equal weight for renewals and acquisitions. By this the organization has reduced its churn figure to 50 % of its existing number.
Nintendo has generated a web based community for capturing customer insights and provides incentives inturn of customer information. With this Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
There's an underlying assumption how the companies will dictate the way forward for telecommunication products and services. But the growing bargaining power of the shoppers, you will find there's shift in paradigm along with the service providers have to customize their model determined by individual customer preferences. The business follows the lead from the customers in designing and promoting services meant to meet specific needs in the customers. Under this circumstance, the service providers need to get the unique needs of the people customers, after which make an effort to develop services which satisfy those multifaceted needs.
With this model, the mass marketing will offer strategy to the customized market research and also the survival in the providers is determined by the company's capacity to meet customer's demand with an ongoing basis. Put simply, customers will dictate the terms of service they mean to receive.
Developing multiple channels
The service providers need to develop multiple channels for sales and support to enhance the buyer experience. Helping the footprint by adding on shops is one of the options that your telecom companies have practiced since ages. Traditional channels like sales departments also had been in focus. Using the rise in competition and economic slowdown, the operators are trying to find economical solutions to serve their clients and keep the service quality intact. Eventually the providers want to move most its sales and services online over the web to achieve better economics. Apart from attaining an affordable solution by transferring to web channels, the operators can empower the customers can use to do various activities with a less costly price compared to retail channels.
Online channels, an individual can perform a number of pursuits like:
- Bill viewing and internet-based payment
- Online register of a complaint for support
- Altering price plan and subscriptions
- Viewing the merchandise catalogue and get products/services online
As well as the previously referred to activities, the operators may offer promotional services and cross-sell other products over the internet. The operators will surely have added revenue by ticker management on the websites and advertisements.
To deliver the customers can use a frequent and connected experience, the operators should integrate all of the existing channels. Each time a customer walks-in into a shop, the buyer service representative are able to retrieve his/her past interactions over everything the channels to offer him/her inside the very best way.
The operator should analyze/monitor the way the customers utilize these channels. Depending on the available data of customers' using of these channels, the operators can find out the preferences of the people customers and mould their offering accordingly. With that the operators can build up customer experience by empowering the crooks to perform activities and thus enhancing the service value for them.
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