Hoff Eriksson posted an update 3 weeks, 4 days ago
The telecom providers have always followed an improvement trajectory during the past decade through increase in customer base in addition to adding considerable numbers to their annual revenue. They’ve got kept the interest rate with all the competitors and have unquestionably game with great results in the past. But also in the current times, they’re facing with the enormous challenge of adaptation to the matured, highly penetrated markets as well as global recessionary effect. Therefore, a change in paradigm to evolve their business models to the present scenario is highly required and also the demand for the hour may be the customer experience management to achieve a better retention ratio.
Challenge in modern telecom industry – Customer retention
Nowadays in this day telecom industry that has attained high penetration level, obtaining a customer becomes even costlier. Industry analysis states that only 25% of the acquired customers stick to the corporation after an year’s serious amounts of while on an average only 20 -30% from the entire usage is revenue earning/profitable customers. This dugs a deep hole from the balance sheet with the telecom agencies. Due to the churning aftereffect of the customers, there is a huge imbalance created in gross additions from the customers and net addition.
Forward path: Approach to customer retention – Customer experience management
Therefore, the main challenge for your telecom operators around the world is managing customer churn. It affects profitability in the company if the customer churns prior to the company can earn back it it incurred in obtaining the client. Therefore, it is rather essential 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 to the revenue earning customers
Identifying the Revenue earning customers
The telecom companies have to define their business logic for identification of the revenue earning customers, as an example: the shoppers with usage more than ARPU are called high valued customers, or perhaps the event of pre-paid, customers recharging greater than INR 250 per month (In Indian scenario) are viewed as revenue earning. Depending on the business rules the whole usage 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 a challenge. This can be accomplished by using various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
After the identification from the valued/revenue earning customers, managing those identified gang of company is so very important.
Emphasizing customers as opposed to products
Within the last years, the telecom agencies have concentrated on introduction of the latest products. They have got originated new products/services then sought to find or create a marketplace for them. But increased competition one of the existing providers reducing barrier to entry for first time players has resulted in the increase in predatory activities inside the telecom industry. Moreover, the price tag on buying of customers has grown considerably. Hence, in the modern times, there exists a gradual change in focus from introduction of the latest products for acquiring new customers to customers’ experience management is observed. Currently, the Telco’s have to pay attention to retaining the existing valued customers and targeting more wallet share of each customer by making more value and improved customer experience.
For instance: In UK, O2 has aligned its functional silos to acquire its existing customer’s perspective to create product decisions and designing promotional offerings. They’ve got centered on retention by putting equal weight for renewals and acquisitions. With this the corporation has reduced its churn figure to half of its existing number.
Nintendo has generated an online community for capturing customer insights and provides incentives in return of customer information. With that Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
It comes with an underlying assumption that the companies will dictate not able to telecommunication products. Though the growing bargaining energy the customers, there exists a shift in paradigm as well as the providers need to customize their model determined by individual customer preferences. The actual business will track control of the customers in designing and promoting services designed to meet specific needs with the customers. Under this circumstance, the providers must know the unique needs of the baby customers, after which attempt to develop services which satisfy those multifaceted needs.
With this model, the mass marketing can give way to the customized researching the market and also the survival with the providers is dependent upon send out power to meet customer’s demand with an ongoing basis. Quite simply, customers will dictate the terms of service they mean to receive.
Developing multiple channels
The agencies must develop multiple channels for sales and support to enhance the consumer experience. Improving the footprint with the addition of on stores is amongst the options which the telecom agencies have practiced since ages. Traditional channels like telemarketer firms also have been in focus. Using the boost in competition and economic slowdown, the operators are looking for economical ways to serve their customers while keeping the service quality intact. Eventually the service providers want to move majority of its sales and services online from the web to realize better economics. Besides attaining an inexpensive solution by transferring to web channels, the operators can empower absolutely free themes to complete various activities at the a lot less expensive price as opposed to retail channels.
Over the internet channels, a customer are able to do a number of pursuits like:
– Bill viewing and online payment
– Online register of a complaint for support
– Altering price plan and subscriptions
– Viewing the product or service catalogue and buying products/services online
Beyond the above mentioned activities, the operators can provide 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 supply the customers can use an even and connected experience, the operators must integrate each of the existing channels. When a customer walks-in into a shop, the buyer service representative can retrieve his/her past interactions over all the channels to offer him/her from the most beneficial way.
The operator needs to analyze/monitor how the customers start using these channels. Depending on the available data of customers’ using of these channels, the operators can get the preferences of the person customers and mould their offering accordingly. From this the operators can take shape up customer experience by empowering these to perform activities and so enhancing the service value for many years.
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