The telecom agencies usually have followed an increase trajectory before decade through surge in customer base as well as adding considerable numbers with their annual revenue. They've kept the pace with all the competitors and have played the game with great results in the past. In the recent times, they may be facing by having an enormous challenge of adaptation for the matured, highly penetrated markets coupled with global recessionary effect. Therefore, a transfer of paradigm to adapt their business models to the present scenario is highly required as well as the necessity of the hour may be the customer experience management to attain a greater retention ratio.
Challenge in modern telecom industry - Customer retention
In the current day telecom industry that has attained high penetration level, acquiring a customer is becoming even costlier. Industry analysis claims that only 25% in the acquired customers stick to the organization after an year's some time and on an average only 20 -30% with the entire customer base is revenue earning/profitable customers. This dugs a deep hole in the balance sheet in the telecom providers. As a result of churning effect of absolutely free themes, there is a huge imbalance created in gross additions with the customers and net addition.
Forward path: Way to customer retention - Customer experience management
Therefore, the major challenge for your telecom operators all over the world is managing customer churn. It affects profitability of the company in case a customer churns before the company can earn back it it incurred in acquiring 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 through the entire client base
2. Handling the customer experience and customer value to the revenue earning customers
Identifying the Revenue earning customers
The telecom agencies need to define their business logic for identification in the revenue earning customers, for instance: the shoppers with usage greater than ARPU these are known as high valued customers, or in case of pre-paid, customers recharging a lot more than INR 250 monthly (In Indian scenario) are thought as revenue earning. With regards to the business rules your entire subscriber 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 by making use of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
After the identification of the valued/revenue earning customers, managing those identified number of company is very important.
Emphasizing customers instead of products
In the last years, the telecom service providers have concentrated on introduction of latest products. They have got originated new products/services and then sought to locate or produce a market for them. But increased competition on the list of existing agencies and lower barrier to entry for brand spanking new players has led to the expansion in predatory activities in the telecom industry. Moreover, the cost of buying of customers has grown considerably. Hence, in the current times, there is a gradual shift in focus from introduction of recent products for acquiring clients to customers' experience management is noted. Currently, the Telco's have to focus on retaining the present valued customers and targeting more wallet share of each and every customer by making more value and improved customer experience.
By way of example: In the united kingdom, O2 has aligned its functional silos to acquire its existing customer's perspective to make product decisions and designing promotional offerings. They have got devoted to retention by putting equal weight for renewals and acquisitions. From this the organization has reduced its churn figure to 50 % of its existing number.
Nintendo has produced a web-based community for capturing customer insights and provides incentives in return of customer information. With this Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
It comes with an underlying assumption how the companies will dictate the way forward for telecommunication products and services. However with the growing bargaining energy the customers can use, there is a shift in paradigm along with the providers have to customize their model based on individual customer preferences. Now the business will observe the lead of the customers in designing and promoting services that will meet specific needs in the customers. Under this circumstance, the companies have to get the unique needs of the people customers, and then try to develop services which satisfy those multifaceted needs.
Developing multiple channels
The providers should develop multiple channels for sales and support to enhance the client experience. Increasing the footprint with the addition of on shops is amongst the options which the telecom companies have practiced since ages. Traditional channels like telemarketing companies also had been in focus. Together with the surge in competition and economic slowdown, the operators are searching for economical approaches to serve the clientele and the service quality intact. Eventually the service providers would like to move most of its sales and services online from the web to achieve better economics. In addition to attaining a cost effective solution by transferring to web channels, the operators can empower the customers to do various activities in a less costly price compared to retail channels.
Over the internet channels, a person is capable of doing quite a few activities like:
- Bill viewing and internet-based payment
- Online register of a complaint for support
- Altering price plan and subscriptions
- Viewing the merchandise 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 web. The operators can have added revenue by ticker management on their websites and advertisements.
To deliver the shoppers a consistent and connected experience, the operators have to integrate each of the existing channels. Every time a customer walks-in with a store, the buyer service representative can retrieve his/her past interactions over everything the channels to provide him/her from the very best way.
The operator should analyze/monitor how the customers start using these channels. With respect to the available data of customers' usage of these channels, the operators can know the preferences of the people customers and mildew their offering accordingly. With that the operators can build up customer experience by empowering these to perform activities and for that reason helping the service value to them.
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