Lundgaard McElroy posted an update 3 months, 3 weeks ago
The telecom companies have always followed a rise trajectory in the past decade through surge in client base along with adding considerable numbers on their annual revenue. They’ve got kept the pace with the competitors and have literally game with great results in the past. But in the present times, they are facing with the enormous challenge of adaptation towards the matured, highly penetrated markets coupled with global recessionary effect. Therefore, a transfer of paradigm to evolve their business models to the present scenario is highly required and also the necessity of the hour may be the customer experience management to attain a greater retention ratio.
Challenge in modern telecom industry – Customer retention
Nowadays in this day telecom industry containing attained high penetration level, obtaining a customer is becoming even costlier. Industry analysis claims that only 25% in the acquired customers stay with the company after an year’s some time and while on an average only 20 -30% in the entire usage is revenue earning/profitable customers. This dugs an in-depth hole within the balance sheet of the telecom providers. As a result of churning effect of the shoppers, you will find there’s huge imbalance created in gross additions of the customers and net addition.
Forward path: Way to customer retention – Customer experience management
Therefore, the most important challenge for that telecom operators around the globe is managing customer churn. It affects profitability of the company if a customer churns prior to company can earn back it it incurred in obtaining the client. Therefore, it’s very essential to indentify the profitable customers and retain them.
Retaining the profitable customers includes 2 steps:
1. Identifying the revenue earning customers through the entire client base
2. Handling the customer experience and customer value to 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 customers can use with usage greater than ARPU these are known as high valued customers, or perhaps case of pre-paid, customers recharging a lot more than INR 250 a month (In Indian scenario) are viewed as revenue earning. Based on the business rules the complete client base 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 often a challenge. Accomplished by making use 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 group of company is so very important.
Centering on customers as an alternative to products
In the last years, the telecom agencies have concentrated on introduction of new products. They have got originated new products/services and then sought to find or build a niche for them. But increased competition on the list of existing service providers minimizing barrier to entry for first time players has triggered the development in predatory activities in the telecom industry. Moreover, the expense of acquiring customers has increased considerably. Hence, in the modern times, there is a gradual transfer of focus from introduction of new products for acquiring new clients to customers’ experience management is observed. Currently, the Telco’s need to pay attention to retaining the prevailing valued customers and targeting more wallet share of 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 to create product decisions and designing promotional offerings. They’ve centered on retention by putting equal weight for renewals and acquisitions. From this the business has reduced its churn figure to half of its existing number.
Nintendo has established an online community for capturing customer insights and will be offering incentives in turn 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 how the agencies will dictate the way forward for telecommunication services. However with the growing bargaining strength of the shoppers, there exists a shift in paradigm as well as the service providers must customize their model depending on individual customer preferences. Now the business follows charge from the customers in designing and promoting services meant to meet specific needs of the customers. Under this circumstance, the service providers need to identify the unique needs of the people customers, after which try and develop services which satisfy those multifaceted needs.
Using this type of model, the mass marketing will offer approach to the customized researching the market along with the survival in the companies is dependent upon the company’s capacity to meet customer’s demand with an ongoing basis. Put simply, customers will dictate the terms of service they intend to receive.
Developing multiple channels
The providers must develop multiple channels for sales and support to enhance the customer experience. Increasing the footprint by adding on shops is probably the options that this telecom agencies have practiced since ages. Traditional channels like sales departments also had been in focus. With the surge in competition and economic slowdown, the operators are seeking economical ways to serve the clientele and the service quality intact. Eventually the agencies would like to move majority of its sales and services online from the web to realize better economics. In addition to attaining an affordable solution by moving to web channels, the operators can empower the shoppers to do various activities with a a lot less expensive price compared to the retail channels.
Over the internet channels, a customer can perform a number of pursuits like:
– Bill viewing and online payment
– Online register of a complaint for support
– Altering price plan and subscriptions
– Viewing the merchandise catalogue and buying products/services online
Besides the previously discussed 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 his or her websites and advertisements.
To supply the customers an even and connected experience, the operators must integrate each of the existing channels. When a customer walks-in into a retail store, the client service representative are able to retrieve his/her past interactions total the channels to serve him/her in the most beneficial way.
The operator must analyze/monitor the way the customers utilize these channels. Depending on the available data of customers’ usage of these channels, the operators can get the preferences of the people customers and mildew their offering accordingly. By this the operators can take shape up customer experience by empowering them to perform activities and thus enhancing the service value for many years.
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