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The telecom service providers usually have followed a rise trajectory previously decade through rise in subscriber base and also adding considerable numbers to their annual revenue. They’ve kept the interest rate with the competitors and still have played the game with amazing success before. However in the current times, these are 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 scenario is highly required as well as the need of the hour could be the customer experience management to accomplish an increased retention ratio.
Challenge in modern telecom industry – Customer retention
In the modern day telecom industry containing attained high penetration level, acquiring a customer gets even costlier. Industry analysis states that only 25% from the acquired customers keep with the company after an year’s serious amounts of while on an average only 20 -30% in the entire usage is revenue earning/profitable customers. This dugs an in-depth hole within the balance sheet with the telecom service providers. As a result of churning aftereffect of the customers, there exists a huge imbalance made in gross additions of the customers and net addition.
Forward path: Way to customer retention – Customer experience management
Therefore, the main challenge for your telecom operators worldwide is managing customer churn. It affects profitability with the company in case a customer churns prior to company can earn back an investment it incurred in obtaining the consumer. Therefore, it is rather 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 subscriber base
2. Managing the customer experience and customer value for that revenue earning customers
Identifying the Revenue earning customers
The telecom providers need to define their business logic for identification in the revenue earning customers, for example: absolutely free themes with usage more than ARPU are called high valued customers, or even in case of pre-paid, customers recharging a lot more than INR 250 a month (In Indian scenario) are viewed as revenue earning. Depending on 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 using various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
Following the identification with the valued/revenue earning customers, managing those identified gang of clients are of utmost importance.
Centering on customers instead of products
Over the past years, the telecom service providers have targeting introduction of recent products. They’ve originated new products/services and then sought to locate or develop a industry for them. But increased competition one of the existing companies reducing barrier to entry for first time players has resulted in the growth in predatory activities inside the telecom industry. Moreover, the price of acquiring clients has grown considerably. Hence, in the modern times, there’s a gradual transfer of focus from introduction of latest products for acquiring clients to customers’ experience management is observed. Currently, the Telco’s need to focus on retaining the prevailing valued customers and targeting more wallet share of every customer by making more value and improved customer experience.
By way of example: In UK, O2 has aligned its functional silos to have its existing customer’s perspective for making product decisions and designing promotional offerings. They have focused on retention by putting equal weight for renewals and acquisitions. With that the organization has reduced its churn figure to half its existing number.
Nintendo has built an online community for capturing customer insights and provides 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 that the agencies will dictate the future of telecommunication products and services. But the growing bargaining power the shoppers, there exists a shift in paradigm along with the companies need to customize their model according to individual customer preferences. The business follows control of the customers in designing and promoting services intended to meet specific needs from the customers. Under this circumstance, the providers have to find out the unique needs of the individual customers, and then attempt to develop services which satisfy those multifaceted needs.
Using this type of model, the mass marketing will give strategy to the customized general market trends and the survival of the service providers is determined by send out capability to meet customer’s demand on an ongoing basis. In other words, customers will dictate the terms of service they want to receive.
Developing multiple channels
The service providers must develop multiple channels for sales and support to enhance the consumer experience. Increasing the footprint by adding on shops is probably the options which the telecom agencies have practiced since ages. Traditional channels like telemarketer firms also have been in focus. Together with the surge in competition and economic slowdown, the operators are searching for economical methods to serve their clients while keeping the service quality intact. Eventually the companies would want to move majority of its sales and services online over the web to attain better economics. Besides attaining an economical solution by transferring to web channels, the operators can empower the customers can use to perform various activities in a a lot less expensive price compared to retail channels.
Online channels, a customer are able to do numerous activities such as:
– Bill viewing an internet-based payment
– Online register of an complaint for support
– Altering price plan and subscriptions
– Viewing the merchandise catalogue and purchase products/services online
Beyond the above mentioned activities, the operators may offer promotional services and cross-sell other products online. The operators might have added revenue by ticker management on their websites and advertisements.
To deliver the shoppers a consistent and connected experience, the operators should integrate every one of the existing channels. Every time a customer walks-in into a retail store, the buyer service representative can retrieve his/her past interactions over all the channels to provide him/her inside the most effective way.
The operator has to analyze/monitor how the customers use these channels. With regards to the available data of customers’ use of these channels, the operators can get the preferences of the baby customers and mould their offering accordingly. With this the operators can build up customer experience by empowering the crooks to perform activities and so increasing the service value for many years.
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