Hoff Eriksson posted an update 3 months, 1 week ago
The telecom service providers usually have followed an increase trajectory during the past decade through boost in subscriber base along with adding considerable numbers with their annual revenue. They’ve got kept the speed with all the competitors and have totally game with great results before. But also in the current times, they are facing by having an enormous challenge of adaptation on the matured, highly penetrated markets along with global recessionary effect. Therefore, a transfer of paradigm to adapt their business models for this scenario is highly required and also the demand for the hour will be the customer experience management to attain an increased retention ratio.
Challenge in modern telecom industry – Customer retention
In the modern day telecom industry that has attained high penetration level, obtaining a customer gets even costlier. Industry analysis states that only 25% in the acquired customers keep with the organization after an year’s some time to with an average only 20 -30% from the entire customer base is revenue earning/profitable customers. This dugs an in-depth hole within the balance sheet in the telecom agencies. Because of the churning aftereffect of the shoppers, there’s a huge imbalance created in gross additions with the customers and net addition.
Forward path: Method to customer retention – Customer experience management
Therefore, the key challenge for your telecom operators worldwide is managing customer churn. It affects profitability of the company if a customer churns before the company can earn back the investment it incurred in establishing the client. 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 to the revenue earning customers
Identifying the Revenue earning customers
The telecom agencies should define their business logic for identification with the revenue earning customers, for example: the customers can use with usage greater than ARPU are classified as high valued customers, or even in case of pre-paid, customers recharging greater than INR 250 each month (In Indian scenario) are thought as revenue earning. With regards to the business rules the complete usage 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 accomplished 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 number of company is most important.
Emphasizing customers rather than products
In the last years, the telecom agencies have concentrated on introduction of latest products. They’ve got originated new products/services then sought to discover or produce a market for them. But increased competition among the existing agencies and lower barrier to entry for brand new players has triggered the development in predatory activities from the telecom industry. Moreover, the cost of purchase of new customers has risen considerably. Hence, in the modern times, there is a gradual change in focus from introduction of recent products for acquiring new customers to customers’ experience management is observed. Currently, the Telco’s need to pay attention to retaining the present valued customers and targeting more wallet share of each and every customer by making more value and improved customer experience.
As an example: In the united kingdom, O2 has aligned its functional silos to obtain its existing customer’s perspective in making product decisions and designing promotional offerings. They have got centered on retention by placing equal weight for renewals and acquisitions. By this the corporation has reduced its churn figure to 50 % of its existing number.
Nintendo has built a web based community for capturing customer insights and offers incentives inturn of customer information. By this Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
There is an underlying assumption how the companies will dictate the future of telecommunication products. However with the growing bargaining power of the customers can use, there exists a transfer of paradigm as well as the providers have to customize their model determined by individual customer preferences. Currently the business follows control with the customers in designing and promoting services designed to meet specific needs with the customers. Under this circumstance, the service providers need to get the unique needs of the person customers, then attempt to develop services which satisfy those multifaceted needs.
With this model, the mass marketing will give approach to the customized market research and the survival of the providers is dependent upon the company’s ability to meet customer’s demand on an ongoing basis. To put it differently, customers will dictate the terms of service they want to receive.
Developing multiple channels
The agencies must develop multiple channels for sales and support to further improve the client experience. Enhancing the footprint with the addition of on retail stores is amongst the options which the telecom agencies have practiced since ages. Traditional channels like telemarketer firms also ended up in focus. With all the boost in competition and economic slowdown, the operators are searching for economical methods to serve their customers and the service quality intact. Eventually the service providers would want to move most of its sales and services online with the web to achieve better economics. In addition to attaining a cost effective solution by transferring to web channels, the operators can empower absolutely free themes to execute various activities at the less costly price compared to the retail channels.
Over the web channels, a person are able to do numerous activities such as:
– Bill viewing and internet-based payment
– Online register of a complaint for support
– Altering price plan and subscriptions
– Viewing the item catalogue and buying products/services online
Besides the previously listed activities, the operators will offer 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 can use a regular and connected experience, the operators need to integrate each of the existing channels. Each time a customer walks-in into a retail store, the consumer service representative can retrieve his/her past interactions over-all the channels to offer him/her inside the very best way.
The operator has to analyze/monitor how the customers begin using these channels. Depending on the available data of customers’ use of these channels, the operators can know the preferences of the person customers and mildew their offering accordingly. By this the operators can build up customer experience by empowering them to perform activities and for that reason improving the service value for many years.
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