The telecom companies usually have followed a growth trajectory during the past decade through increase in subscriber base along with adding considerable numbers to their annual revenue. They have kept the interest rate with the competitors and also have literally game with great results in the past. In the recent times, they may be facing with an enormous challenge of adaptation to the matured, highly penetrated markets coupled with global recessionary effect. Therefore, a shift in paradigm to evolve their business models to the present situation is highly required and also the need of the hour will be the customer experience management to accomplish an increased retention ratio.
Challenge in modern telecom industry - Customer retention
In the current day telecom industry which includes attained high penetration level, acquiring a customer is getting even costlier. Industry analysis states that only 25% from the acquired customers stay with the company after an year's some time to while on an average only 20 -30% from the entire subscriber base is revenue earning/profitable customers. This dugs an in-depth hole from the balance sheet from the telecom agencies. Because of the churning aftereffect of the customers, there is 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 that telecom operators around the world is managing customer churn. It affects profitability of the company if the customer churns before the company can earn back an investment it incurred in obtaining the consumer. Therefore, it is very important to indentify the profitable customers and retain them.
Retaining the profitable customers includes 2 steps:
1. Identifying the revenue earning customers from your entire usage
2. Handling the customer experience and customer value to the revenue earning customers
Identifying the Revenue earning customers
The telecom service providers must define their business logic for identification from the revenue earning customers, for example: the customers can use with usage greater than ARPU these are known as high valued customers, or perhaps the event of pre-paid, customers recharging over INR 250 a month (In Indian scenario) are considered as revenue earning. With respect to 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 often a challenge. Accomplished with the aid of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
As soon as the identification in the valued/revenue earning customers, managing those identified gang of industry is so very important.
Centering on customers instead of products
In the last years, the telecom agencies have dedicated to introduction of new products. They have originated new products/services after which sought to locate or build a market for them. But increased competition one of the existing companies minimizing barrier to entry for new players has ended in the increase in predatory activities from the telecom industry. Moreover, the price tag on buying of customers has expanded considerably. Hence, in the current times, there exists a gradual change in focus from introduction of the latest products for acquiring new clients to customers' experience management is observed. Currently, the Telco's need to give full attention to retaining the present valued customers and targeting more wallet share of each customer by making more value and improved customer experience.
As an example: In UK, O2 has aligned its functional silos to have its existing customer's perspective to create product decisions and designing promotional offerings. They have focused on retention by putting equal weight for renewals and acquisitions. From this the corporation has reduced its churn figure to 1 / 2 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
There's an underlying assumption the companies will dictate the way forward for telecommunication products and services. But the growing bargaining power of the shoppers, there is a shift in paradigm and also the agencies must customize their model based on individual customer preferences. Now the business will track charge with the customers in designing and promoting services that will meet specific needs of the customers. Under this circumstance, the agencies need to find out the unique needs of the individual customers, and then try to develop services which satisfy those multifaceted needs.
With this particular model, the mass marketing can give approach to the customized survey and the survival with the service providers is determined by send out ability to meet customer's demand by using an ongoing basis. Put simply, customers will dictate the tos they want to receive.
Developing multiple channels
The providers must develop multiple channels for sales and support to improve the customer experience. Improving the footprint by adding on retail stores is probably the options that the telecom agencies have practiced since ages. Traditional channels like telemarketer firms also ended up in focus. With all the increase in competition and economic slowdown, the operators are searching for economical approaches to serve their clients while keeping the service quality intact. Eventually the providers would want to move most of its sales and services online from the web to attain better economics. Aside from attaining an economical solution by transferring to web channels, the operators can empower the shoppers to complete various activities in a much cheaper price compared to the retail channels.
Over the web channels, a client can perform numerous pursuits like:
- Bill viewing and online payment
- Online register of your complaint for support
- Altering price plan and subscriptions
- Viewing the product catalogue and get products/services online
Beyond the previously listed activities, the operators may offer promotional services and cross-sell other products online. The operators may have added revenue by ticker management on the websites and advertisements.
To supply absolutely free themes a frequent and connected experience, the operators need to integrate all the existing channels. Every time a customer walks-in to some store, the customer 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 utilize these channels. Based on the available data of customers' usage of these channels, the operators can get the preferences of the person customers and mildew their offering accordingly. From this the operators can build up customer experience by empowering these phones perform activities and for that reason helping the service value for many years.
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