The telecom providers have always followed an increase trajectory during the past decade through surge in customer base as well as adding considerable numbers on their annual revenue. They’ve got kept the speed using the competitors and still have played the game with amazing success in the past. In the recent times, they’re facing with the enormous challenge of adaptation towards the matured, highly penetrated markets coupled with global recessionary effect. Therefore, a change in paradigm to adapt their business models to the current situation is highly required and also the necessity of the hour is the customer experience management to realize a better 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 keep with the organization after an year’s some time to by using an average only 20 -30% in the entire client base is revenue earning/profitable customers. This dugs a deep hole within the balance sheet with the telecom agencies. Due to the churning aftereffect of the customers, there exists a huge imbalance made in gross additions with the customers and net addition.
Forward path: Approach to customer retention - Customer experience management
Therefore, the main challenge for your telecom operators around the world is managing customer churn. It affects profitability with the company if the customer churns before the company can earn back it it incurred in establishing the customer. Therefore, it is very essential 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 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, by way of example: the shoppers with usage over ARPU are high valued customers, or even in the event of pre-paid, customers recharging a lot more than INR 250 each month (In Indian scenario) are viewed as revenue earning. Based on the business rules the 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 with the help of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
After the identification in the valued/revenue earning customers, managing those identified number of company is very important.
Centering on customers instead of products
During the last years, the telecom providers have dedicated to introduction of the latest products. They’ve originated new products/services then sought to get or produce a niche for them. But increased competition one of the existing agencies reducing barrier to entry for brand new players has resulted in the development in predatory activities in the telecom industry. Moreover, the cost of purchase of clients has increased considerably. Hence, in the current times, there exists a gradual transfer of focus from introduction of latest products for acquiring customers to customers’ experience management is noted. Currently, the Telco’s should pay attention to retaining the present valued customers and targeting more wallet share of every customer by making more value and improved customer experience.
For example: In UK, O2 has aligned its functional silos to get its existing customer’s perspective in making product decisions and designing promotional offerings. They’ve devoted to retention by putting equal weight for renewals and acquisitions. From this the company has reduced its churn figure to half its existing number.
Nintendo has established an online community for capturing customer insights and provides incentives in turn of customer information. By this Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
It has an underlying assumption that this agencies will dictate the future of telecommunication services and products. Though the growing bargaining strength of the shoppers, there is a transfer of paradigm as well as the agencies have to customize their model determined by individual customer preferences. The actual business will track control with the customers in designing and promoting services meant to meet specific needs of the customers. Under this circumstance, the agencies need to get the unique needs of the baby customers, and then attempt to develop services which satisfy those multifaceted needs.
Developing multiple channels
The providers have to develop multiple channels for sales and support to further improve the buyer experience. Enhancing the footprint by having on shops is amongst the options that the telecom providers have practiced since ages. Traditional channels like telemarketing companies also have been in focus. With all the boost in competition and economic slowdown, the operators are seeking economical ways to serve their customers and keep the service quality intact. Eventually the companies want to move most its sales and services online with the web to attain better economics. In addition to attaining an inexpensive solution by relocating to web channels, the operators can empower the shoppers to complete various activities at the less costly price than the retail channels.
Over the internet channels, a client can perform a host of pursuits like:
- Bill viewing an internet-based payment
- Online register of a complaint for support
- Altering price plan and subscriptions
- Viewing the product catalogue and get products/services online
In addition to the previously referred to activities, the operators can offer promotional services and cross-sell other products over the internet. The operators might have added revenue by ticker management on their own websites and advertisements.
To supply the customers can use a frequent and connected experience, the operators have to integrate all of the existing channels. Every time a customer walks-in to some retail outlet, the buyer service representative are able to retrieve his/her past interactions total the channels to serve him/her within the best possible way.
The operator has to analyze/monitor how a customers utilize these channels. With respect to the available data of customers’ usage of these channels, the operators can identify the preferences of the people customers and mold their offering accordingly. By this the operators can build up customer experience by empowering them to perform activities and so improving the service value to them.
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