The telecom companies usually have followed an increase trajectory before decade through surge in customer base in addition to adding considerable numbers on their annual revenue. They have got kept the pace with the competitors and still have literally game with great results 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 for this situation is highly required and also the need for the hour is the customer experience management to accomplish a higher retention ratio.
Challenge in modern telecom industry - Customer retention
In the modern day telecom industry which includes attained high penetration level, having a customer becomes even costlier. Industry analysis claims that only 25% in the acquired customers stick with the business after an year's some time and on an average only 20 -30% from the entire subscriber base is revenue earning/profitable customers. This dugs an in-depth hole inside the balance sheet from the telecom agencies. As a result of churning aftereffect of the shoppers, 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 main challenge for your telecom operators all over the world is managing customer churn. It affects profitability with the company in case a customer churns ahead of the company can earn back a purchase it incurred in establishing the client. Therefore, it is rather 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 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 customers can use with usage a lot more than ARPU are high valued customers, or perhaps in case of pre-paid, customers recharging over INR 250 a month (In Indian scenario) are considered as revenue earning. Based on the business rules your entire usage must 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 accomplished with the aid of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
Following your identification of the valued/revenue earning customers, managing those identified number of clients are very important.
Centering on customers rather than products
Over the past years, the telecom service providers have focused on introduction of new products. They have originated new products/services and after that sought to discover or develop a marketplace for them. But increased competition one of the existing agencies and minimize barrier to entry for first time players has ended in the increase in predatory activities inside the telecom industry. Moreover, the price of acquiring customers has expanded considerably. Hence, nowadays in this times, you will find there's gradual shift in focus from introduction of new products for acquiring clients to customers' experience management is observed. Currently, the Telco's have to concentrate on retaining the prevailing valued customers and targeting more wallet share of every customer by creating more value and improved customer experience.
For example: In the united kingdom, O2 has aligned its functional silos to acquire its existing customer's perspective to create product decisions and designing promotional offerings. They have centered on retention by putting equal weight for renewals and acquisitions. With this the corporation has reduced its churn figure to half its existing number.
Nintendo has built an online community for capturing customer insights and will be offering incentives in turn of customer information. From this Nintendo has gained valuable insights into market needs and preferences.
Customer led customization model
There's an underlying assumption the service providers will dictate not able to telecommunication services. But the growing bargaining power the shoppers, there is a change in paradigm and also the providers need to customize their model depending on individual customer preferences. Currently the business will follow charge with the customers in designing and promoting services meant to meet specific needs of the customers. Under this circumstance, the service providers must identify the unique needs of the baby customers, after which try and develop services which satisfy those multifaceted needs.
Using this model, the mass marketing will give strategy to the customized researching the market as well as the survival in the agencies will depend on the business's capacity to meet customer's demand with an ongoing basis. To put it differently, customers will dictate the terms of service they want to receive.
Developing multiple channels
The companies should develop multiple channels for sales and support to enhance the consumer experience. Improving the footprint with the addition of on shops is amongst the options that your telecom agencies have practiced since ages. Traditional channels like sales departments also have been in focus. With the surge in competition and economic slowdown, the operators are looking for economical ways to serve their clients and the service quality intact. Eventually the providers would want to move most its sales and services online with the web to realize better economics. Aside from attaining an inexpensive solution by relocating to web channels, the operators can empower the customers can use to complete various activities in a much cheaper price as opposed to retail channels.
Online channels, an individual are able to do 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 product catalogue and purchase products/services online
Besides the previously discussed activities, the operators can offer promotional services and cross-sell other products online. The operators will surely have added revenue by ticker management on the websites and advertisements.
To deliver the shoppers a consistent and connected experience, the operators have to integrate every one of the existing channels. Every time a customer walks-in to some shop, the customer service representative should be able to retrieve his/her past interactions over everything the channels to provide him/her inside the very best way.
The operator must analyze/monitor the way the customers use these channels. Based on the available data of customers' usage of these channels, the operators can find out the preferences of the individual customers and mildew their offering accordingly. With this the operators can take shape up customer experience by empowering these phones perform activities and so helping the service value in their mind.
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