The telecom companies usually have followed a rise trajectory before decade through surge in customer base along with adding considerable numbers for their annual revenue. They have kept the interest rate using the competitors and also have totally game with great results previously. But in the present times, these are facing with an enormous challenge of adaptation for the matured, highly penetrated markets coupled with global recessionary effect. Therefore, a change in paradigm to evolve their business models to the present scenario is highly required as well as the need of the hour may be the customer experience management to attain a higher retention ratio.
Challenge in modern telecom industry – Customer retention
Nowadays in this day telecom industry which has attained high penetration level, obtaining a customer is becoming even costlier. Industry analysis claims that only 25% with the acquired customers stick with the company after an year’s some time and on an average only 20 -30% in the entire customer base is revenue earning/profitable customers. This dugs a deep hole in the balance sheet from the telecom providers. Because of the churning effect of absolutely free themes, there exists a huge imbalance created in gross additions in the customers and net addition.
Forward path: Strategy to customer retention – Customer experience management
Therefore, the key challenge for your telecom operators worldwide is managing customer churn. It affects profitability of the company in case a customer churns ahead of the company can earn back a purchase it incurred in establishing the buyer. Therefore, it’s very important 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. Managing the customer experience and customer value to the revenue earning customers
Identifying the Revenue earning customers
The telecom agencies must define their business logic for identification in the revenue earning customers, for instance: the shoppers with usage more than ARPU these are known as high valued customers, or in the event of pre-paid, customers recharging more than INR 250 each month (In Indian scenario) are viewed as revenue earning. Based on the business rules the complete client 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. Accomplished with the help of various business analysis tools (eg: SAS, SPSS, Teradata, etc.).
Customer experience management
As soon as the identification of the valued/revenue earning customers, managing those identified band of industry is of utmost importance.
Emphasizing customers as an alternative to products
Within the last years, the telecom service providers have focused on introduction of recent products. They have got originated new products/services after which sought to discover or create a niche for them. But increased competition one of many existing service providers and lower barrier to entry for new players has resulted in the growth in predatory activities within the telecom industry. Moreover, the price of buying of new customers has increased considerably. Hence, in the modern times, there is a gradual change in focus from introduction of new products for acquiring clients to customers’ experience management is noted. Currently, the Telco’s must concentrate on retaining the existing valued customers and targeting more wallet share of each customer by making more value and improved customer experience.
For example: In the united kingdom, O2 has aligned its functional silos to obtain its existing customer’s perspective for making product decisions and designing promotional offerings. They have devoted to retention by placing equal weight for renewals and acquisitions. With that the organization has reduced its churn figure to half its existing number.
Nintendo has generated a web-based 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
It has an underlying assumption how the companies will dictate the way forward for telecommunication services and products. But the growing bargaining power the shoppers, there’s a change in paradigm along with the providers should customize their model based on individual customer preferences. The business will observe the lead of the customers in designing and promoting services that will meet specific needs of the customers. Under this circumstance, the service providers need to identify the unique needs of the person customers, and then attempt to develop services which satisfy those multifaceted needs.
Using this type of model, the mass marketing will give method to the customized survey and also the survival in the companies will depend on their ability to meet customer’s demand with an ongoing basis. Quite simply, 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 consumer experience. Improving the footprint by adding on retail stores is among the options that your telecom providers have practiced since ages. Traditional channels like telemarketer firms also have been in focus. Together with the boost in competition and economic slowdown, the operators are looking for economical approaches to serve their customers and keep the service quality intact. Eventually the providers would like to move majority of its sales and services online with the web to attain better economics. Besides attaining an affordable solution by relocating to web channels, the operators can empower the customers can use to complete various activities at a much cheaper price than the retail channels.
Over the internet channels, an individual is capable of doing quite a few pursuits like:
– Bill viewing and online payment
– Online register of the complaint for support
– Altering price plan and subscriptions
– Viewing the product or service catalogue and buy products/services online
As well as the previously referred to activities, the operators may offer promotional services and cross-sell other products on the internet. The operators will surely have added revenue by ticker management on their websites and advertisements.
To provide absolutely free themes a regular and connected experience, the operators need to integrate each of the existing channels. Every time a customer walks-in to some store, the buyer service representative can retrieve his/her past interactions over-all the channels for everyone him/her in the most effective way.
The operator has to analyze/monitor what sort of customers use these channels. With respect to the available data of customers’ use of these channels, the operators can get the preferences of the people customers and mildew their offering accordingly. With that the operators can take shape up customer experience by empowering these to perform activities and so improving the service value for many years.
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