Lundgaard Bennedsen posted an update 3 months, 2 weeks ago
The telecom service providers usually have followed a rise trajectory in the past decade through boost in client base in addition to adding considerable numbers with their annual revenue. They’ve got kept the speed with all the competitors and have totally game with amazing success in the past. However in the current times, they’re facing by having an enormous challenge of adaptation to the matured, highly penetrated markets in conjunction with global recessionary effect. Therefore, a change in paradigm to evolve their business models to the present scenario is highly required along with the demand for the hour could be the customer experience management to realize a greater retention ratio.
Challenge in modern telecom industry – Customer retention
In the modern day telecom industry containing attained high penetration level, acquiring a customer is becoming even costlier. Industry analysis claims that only 25% with the acquired customers stick to the organization after an year’s some time and on an average only 20 -30% with the entire customer base is revenue earning/profitable customers. This dugs a deep hole from the balance sheet from the telecom providers. Because of the churning aftereffect of absolutely free themes, there exists a huge imbalance made in gross additions from the customers and net addition.
Forward path: Method to customer retention – Customer experience management
Therefore, the major challenge for your telecom operators all over the world is managing customer churn. It affects profitability in the company if a customer churns prior to company can earn back the investment it incurred in establishing the client. Therefore, it is very necessary to indentify the profitable customers and retain them.
Retaining the profitable customers includes 2 steps:
1. Identifying the revenue earning customers through the entire usage
2. Handling the customer experience and customer value for the revenue earning customers
Identifying the Revenue earning customers
The telecom service providers have to define their business logic for identification in the revenue earning customers, by way of example: the shoppers with usage more than ARPU are high valued customers, or in the event of pre-paid, customers recharging over INR 250 each month (In Indian scenario) are viewed as revenue earning. Depending on the business rules the whole client base should 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 really a challenge. Accomplished by making use of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
After the identification in the valued/revenue earning customers, managing those identified gang of industry is very important.
Concentrating on customers rather than products
Within the last years, the telecom providers have dedicated to introduction of recent products. They’ve got originated new products/services then sought to discover or develop a market for them. But increased competition one of the existing companies and minimize barrier to entry for brand new players has triggered the development in predatory activities in the telecom industry. Moreover, the price tag on buying of new customers has expanded considerably. Hence, in the current times, you will find there’s gradual change in focus from introduction of latest products for acquiring clients to customers’ experience management is noted. Currently, the Telco’s must concentrate on retaining the present valued customers and targeting more wallet share of each and every customer by making more value and improved customer experience.
For example: In the united kingdom, O2 has aligned its functional silos to have its existing customer’s perspective in making product decisions and designing promotional offerings. They’ve focused on retention by placing equal weight for renewals and acquisitions. With that the business has reduced its churn figure to half of its existing number.
Nintendo has established a web-based community for capturing customer insights and will be offering incentives in return of customer information. From this Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
There is an underlying assumption that the service providers will dictate not able to telecommunication products. However with the growing bargaining power of the customers, there exists a shift in paradigm as well as the service providers need to customize their model determined by individual customer preferences. Currently the business follows charge from the customers in designing and promoting services intended to meet specific needs from the customers. Under this circumstance, the service providers need to get the unique needs of the people customers, after which attempt to develop services which satisfy those multifaceted needs.
With this particular model, the mass marketing will give way to the customized general market trends and also the survival in the companies depends on send out capacity to meet customer’s demand with an ongoing basis. To put it differently, customers will dictate the terms of service they plan to receive.
Developing multiple channels
The providers should develop multiple channels for sales and support to further improve the client experience. Improving the footprint with the addition of on shops is probably the options that this telecom service providers have practiced since ages. Traditional channels like telemarketing companies also have been in focus. With the surge in competition and economic slowdown, the operators are searching for economical approaches to serve their customers while keeping the service quality intact. Eventually the companies wish to move tastes its sales and services online with the web to accomplish better economics. In addition to attaining an inexpensive solution by transferring to web channels, the operators can empower the customers can use to perform various activities at a less costly price as opposed to retail channels.
Online channels, a client are able to do quite a few pursuits like:
– Bill viewing and online payment
– Online register of the complaint for support
– Altering price plan and subscriptions
– Viewing the product or service catalogue and buy products/services online
As well as the above mentioned activities, the operators will offer promotional services and cross-sell other products online. The operators might have added revenue by ticker management on their own websites and advertisements.
To offer the customers can use a regular and connected experience, the operators should integrate all of the existing channels. Every time a customer walks-in with a retail outlet, the client service representative should be able to retrieve his/her past interactions over all the channels to serve him/her inside the most beneficial way.
The operator needs to analyze/monitor how a customers use these channels. Depending on the available data of customers’ using of these channels, the operators can find out the preferences of the person customers and mould their offering accordingly. With that the operators can build up customer experience by empowering them to perform activities and for that reason increasing the service value for them.
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