The telecom providers have always followed an improvement trajectory during the past decade through boost in usage and also adding considerable numbers on their annual revenue. They've got kept the interest rate using the competitors and also have played the game with amazing success before. But in the present times, they may be facing with an enormous challenge of adaptation towards the matured, highly penetrated markets as well as global recessionary effect. Therefore, a shift in paradigm to adapt their business models for this scenario is highly required along with the need for the hour will be the customer experience management to attain a higher retention ratio.
Challenge in modern telecom industry - Customer retention
Nowadays in this day telecom industry that has attained high penetration level, acquiring a customer is getting even costlier. Industry analysis claims that only 25% with the acquired customers stick to the business after an year's serious amounts of on an average only 20 -30% in the entire customer base is revenue earning/profitable customers. This dugs an in-depth hole in the balance sheet in the telecom providers. Because of the churning aftereffect of the shoppers, you will find there's 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 to the telecom operators around the world is managing customer churn. It affects profitability from the company in case a customer churns prior to company can earn back it it incurred in obtaining the customer. Therefore, it is extremely necessary to indentify the profitable customers and retain them.
Retaining the profitable customers includes 2 steps:
1. Identifying the revenue earning customers from the entire client base
2. Managing the customer experience and customer value for your revenue earning customers
Identifying the Revenue earning customers
The telecom service providers must define their business logic for identification of the revenue earning customers, for example: the shoppers with usage a lot more than ARPU are called high valued customers, or perhaps case of pre-paid, customers recharging over INR 250 monthly (In Indian scenario) are considered as revenue earning. Based on the business rules the whole client base 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 is often a challenge. This can be accomplished with the aid of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
Following the identification in the valued/revenue earning customers, managing those identified group of clients are very important.
Emphasizing customers as opposed to products
During the last years, the telecom providers have targeting introduction of latest products. They have got originated new products/services and then sought to find or build a industry for them. But increased competition among the existing providers minimizing barrier to entry for brand new players has resulted in the growth in predatory activities in the telecom industry. Moreover, the cost of buying of new clients has risen considerably. Hence, in the current times, there is a gradual shift in focus from introduction of new products for acquiring new clients to customers' experience management is observed. Currently, the Telco's should focus on retaining the prevailing valued customers and targeting more wallet share of each and every customer by creating more value and improved customer experience.
For instance: In UK, O2 has aligned its functional silos to acquire its existing customer's perspective to make product decisions and designing promotional offerings. They have got focused on retention by putting equal weight for renewals and acquisitions. With this the company has reduced its churn figure to 50 % of its existing number.
Nintendo has generated an online community for capturing customer insights and offers incentives inturn of customer information. With that Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
It has an underlying assumption the agencies will dictate the way forward for telecommunication products and services. But the growing bargaining strength of the shoppers, you will find there's shift in paradigm and the service providers need to customize their model based on individual customer preferences. The actual business follows the lead from the customers in designing and promoting services intended to meet specific needs with the customers. Under this circumstance, the providers have to get the unique needs of the baby customers, and then try and develop services which satisfy those multifaceted needs.
Using this type of model, the mass marketing can give approach to the customized general market trends as well as the survival in the agencies is dependent upon the business's ability to meet customer's demand on an ongoing basis. Put simply, customers will dictate the tos they mean to receive.
Developing multiple channels
The service providers have to develop multiple channels for sales and support to further improve the consumer experience. Helping the footprint by having on retail stores is one of the options that this telecom service providers have practiced since ages. Traditional channels like telemarketer firms also had been in focus. With all the rise in competition and economic slowdown, the operators are looking for economical approaches to serve their customers and the service quality intact. Eventually the providers wish to move majority of its sales and services online through the web to realize better economics. Apart from attaining an affordable solution by moving to web channels, the operators can empower absolutely free themes to complete various activities with a much cheaper price as opposed to retail channels.
On the internet channels, an individual is capable of doing a number of activities such as:
- Bill viewing and online payment
- Online register of a complaint for support
- Altering price plan and subscriptions
- Viewing the product catalogue and buying products/services online
Besides the above mentioned activities, the operators will offer promotional services and cross-sell other products over the internet. The operators may have added revenue by ticker management on his or her websites and advertisements.
To offer the customers can use a consistent and connected experience, the operators have to integrate each of the existing channels. Each time a customer walks-in into a retail store, the client service representative will be able to retrieve his/her past interactions over everything the channels to offer him/her in the best possible way.
The operator needs to analyze/monitor how a customers begin using these channels. Based on the available data of customers' using of these channels, the operators can find out the preferences of the person customers and mold their offering accordingly. With this the operators can build up customer experience by empowering these phones perform activities and thus improving the service value for them.
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