The telecom providers have always followed an improvement trajectory previously decade through surge in client base as well as adding considerable numbers on their annual revenue. They have kept the interest rate using the competitors and still have unquestionably game with amazing success previously. But in the current times, these are facing having an enormous challenge of adaptation for the matured, highly penetrated markets in conjunction with global recessionary effect. Therefore, a transfer of paradigm to adapt their business models to the current situation is highly required as well as 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 current day telecom industry which has attained high penetration level, acquiring a customer becomes even costlier. Industry analysis claims that only 25% of the acquired customers stick to the organization after an year’s serious amounts of while on an average only 20 -30% with the entire usage is revenue earning/profitable customers. This dugs a deep hole from the balance sheet with the telecom service providers. Due to churning effect of the customers can use, there’s a huge imbalance made in gross additions of the customers and net addition.
Forward path: Strategy to customer retention - Customer experience management
Therefore, the most important challenge for that telecom operators around the world is managing customer churn. It affects profitability in the company if the customer churns prior to 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 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 need to define their business logic for identification of the revenue earning customers, by way of example: the customers can use with usage greater than ARPU are called high valued customers, or perhaps in case of pre-paid, customers recharging over INR 250 per month (In Indian scenario) are thought as revenue earning. Depending on the business rules your entire subscriber base has 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 a challenge. This can be achieved by using 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 industry is so very important.
Emphasizing customers as opposed to products
During the last years, the telecom providers have focused on introduction of recent products. They have originated new products/services and after that sought to get or build a market for them. But increased competition one of the existing agencies minimizing barrier to entry for first time players has triggered the expansion in predatory activities inside the telecom industry. Moreover, the expense of buying of customers has grown considerably. Hence, in the current times, there exists a gradual shift in focus from introduction of latest products for acquiring clients to customers’ experience management is observed. Currently, the Telco’s should focus on retaining the current valued customers and targeting more wallet share of each and every customer by making more value and improved customer experience.
As an example: In the united kingdom, O2 has aligned its functional silos to acquire its existing customer’s perspective in making product decisions and designing promotional offerings. They have got focused on retention by placing equal weight for renewals and acquisitions. By 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 in exchange of customer information. With that Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
There’s an underlying assumption that this providers will dictate not able to telecommunication services. But with the growing bargaining power the customers, there exists a change in paradigm and the agencies have to customize their model according to individual customer preferences. The actual business will observe control of the customers in designing and promoting services that will meet specific needs from the customers. Under this circumstance, the service providers need to know the unique needs of the individual customers, then make an effort to develop services which satisfy those multifaceted needs.
With this model, the mass marketing gives way to the customized survey and also the survival from the service providers depends on send out ability to meet customer’s demand with an ongoing basis. In other words, customers will dictate the terms of service they want to receive.
Developing multiple channels
The providers should develop multiple channels for sales and support to improve the buyer experience. Helping the footprint by adding on retail outlets is amongst the options that this telecom providers have practiced since ages. Traditional channels like telemarketing companies also ended up in focus. Using the increase in competition and economic slowdown, the operators are seeking economical approaches to serve their clients while keeping the service quality intact. Eventually the companies want to move tastes its sales and services online from the web to accomplish better economics. Aside from attaining an inexpensive solution by relocating to web channels, the operators can empower the customers to perform various activities at a less costly price compared to retail channels.
Over the internet channels, an individual is capable of doing a number of activities like:
- Bill viewing an internet-based payment
- Online register of your complaint for support
- Altering price plan and subscriptions
- Viewing the item catalogue and buying products/services online
In addition to the previously discussed activities, the operators can offer promotional services and cross-sell other products over the internet. The operators will surely have added revenue by ticker management on their own websites and advertisements.
To offer the shoppers a regular and connected experience, the operators need to integrate all of the existing channels. Each time a customer walks-in with a store, the client service representative will be able to retrieve his/her past interactions over everything the channels to offer him/her within the most beneficial way.
The operator has to analyze/monitor what sort of customers begin using these channels. Based on the available data of customers’ usage of these channels, the operators can get the preferences of the baby customers and mould their offering accordingly. With this the operators can take shape up customer experience by empowering these phones perform activities and thus enhancing the service value for them.
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