The telecom companies usually have followed a growth trajectory previously decade through boost in client base and also adding considerable numbers to their annual revenue. They have got kept the speed using the competitors and have literally game with amazing success during the past. However in the recent times, they are facing having an enormous challenge of adaptation for the matured, highly penetrated markets along with global recessionary effect. Therefore, a change in paradigm to evolve their business models to the present situation is highly required and the necessity of the hour could be the customer experience management to accomplish an increased retention ratio.
Challenge in modern telecom industry – Customer retention
Nowadays in this day telecom industry which includes attained high penetration level, obtaining a customer is getting even costlier. Industry analysis states that only 25% with the acquired customers stick to the organization after an year’s time and while on an average only 20 -30% of the entire usage is revenue earning/profitable customers. This dugs a deep hole inside the balance sheet in the telecom agencies. Due to the churning effect of absolutely free themes, you will find there’s huge imbalance made in gross additions from the customers and net addition.
Forward path: Method to customer retention – Customer experience management
Therefore, the key challenge for your telecom operators worldwide is managing customer churn. It affects profitability of the company in case a customer churns before the company can earn back an investment it incurred in getting the buyer. Therefore, it is very critical to indentify the profitable customers and retain them.
Retaining the profitable customers includes 2 steps:
1. Identifying the revenue earning customers from the entire usage
2. Handling the customer experience and customer value for the revenue earning customers
Identifying the Revenue earning customers
The telecom providers need to define their business logic for identification in the revenue earning customers, by way of example: the customers with usage over ARPU these are known as high valued customers, or even in the event of pre-paid, customers recharging over INR 250 monthly (In Indian scenario) are thought as revenue earning. Depending on the business rules the entire customer 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. This can be accomplished with the help of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
After the identification with the valued/revenue earning customers, managing those identified number of clients are so very important.
Focusing on customers as opposed to products
Within the last years, the telecom service providers have targeting introduction of the latest products. They’ve got originated new products/services and after that sought to locate or build a niche for them. But increased competition one of the existing service providers and minimize barrier to entry for new players has triggered the increase in predatory activities in the telecom industry. Moreover, the cost of purchase of new customers has expanded considerably. Hence, in the modern times, there is a gradual transfer of focus from introduction of recent products for acquiring new clients to customers’ experience management is noted. Currently, the Telco’s must focus on retaining the prevailing 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
obtain its existing customer’s perspective to make product decisions and
designing promotional offerings. They have got dedicated to retention by placing
equal weight for renewals and acquisitions. From this the company has reduced
its churn figure to half of its existing number.
Nintendo has built a web based community for capturing customer insights and will be offering incentives in return of customer information. By this Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
There’s an underlying assumption that the providers will dictate the future of telecommunication products. Though the growing bargaining power the shoppers, there exists a transfer of paradigm and also the companies should customize their model according to individual customer preferences. Currently the business follows charge with the customers in designing and promoting services intended to meet specific needs of the customers. Under this circumstance, the agencies have to know the unique needs of the individual customers, after which make an effort to develop services which satisfy those multifaceted needs.
Developing multiple channels
The providers need to develop multiple channels for sales and support to improve the buyer experience. Helping the footprint by adding on retail outlets is one of the options that the telecom agencies have practiced since ages. Traditional channels like telemarketer firms also had been in focus. Together with the increase in competition and economic slowdown, the operators are searching for economical ways to serve their potential customers while keeping the service quality intact. Eventually the companies wish to move tastes its sales and services online from the web to achieve better economics. Besides attaining an economical solution by transferring to web channels, the operators can empower the shoppers to do various activities in a less expensive price than the retail channels.
On the internet channels, an individual is capable of doing numerous activities such as:
– Bill viewing and internet-based payment
– Online register of your complaint for support
– Altering price plan and subscriptions
– Viewing the item catalogue and purchase products/services online
In addition to the previously listed activities, the operators can provide promotional services and cross-sell other products over the web. The operators can have added revenue by ticker management on the websites and advertisements.
To offer the customers a consistent and connected experience, the operators should integrate each of the existing channels. When a customer walks-in to some retail outlet, the consumer service representative are able to retrieve his/her past interactions over-all the channels to offer him/her in the most beneficial way.
The operator should analyze/monitor what sort of customers utilize these channels. With regards to the available data of customers’ using these channels, the operators can identify the preferences of the baby customers and mould their offering accordingly. With this the operators can take shape up customer experience by empowering these to perform activities and so helping the service value for them.
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