4G World: Customer experience front and center

Today, service providers are competing in an increasingly competitive market, which makes gaining and retaining customers essential to their overall performance.  A hot topic of conversation this week at 4G World in Chicago, Illinois is customer experience, but more importantly the personalization of the customer experience.

“To satisfy a customer, you need to know what satisfies them,” said Steven Cotton, head of revenue management at TM Forum.

Today, service providers are competing in an increasingly competitive market, which makes gaining and retaining customers essential to their overall performance.  A hot topic of conversation this week at 4G World in Chicago, Illinois is customer experience, but more importantly the personalization of the customer experience.

“To satisfy a customer, you need to know what satisfies them,” said Steven Cotton, head of revenue management at TM Forum.

The concept of personalization is as simple as that, but finding out what a specific customer wants is far more challenging and something telecom operators are struggling with.  One way of providing customers with a personalized experience is through self-service applications, such as personalized billing apps on a phone or tablet.

During the 4G World Customer Experience Summit, Yankee Group’s (Boston, Mass., U.S.A.) director Sheryl Kingstone reported results from a recent survey conducted by the company, which surveyed 20,000 North American telecom consumers asking them what they wanted from their service provider.  According to Kingstone, one of the most important pieces of information from the presentation involved how customers preferred to interact with telecom operators.  Home telephones topped the list, followed second by mobile phones.  According to Kingstone, the most significant part about the list was that self-service applications were ranked sixth of the 11 interactions listed. 

“I’ve done this list for a while now,” said Kingstone.  “Self-service being six is significant considering it wasn’t even on the list last year.”

One exhibitor at the show, MoMac (Rotterdam Netherlands), a company providing personal customer interfaces for mobile devices, is in the process of making self-service applications that could give customers the transparency they want by building personalized applications for smartphones.  Through these personalized applications, customers will be able to view their billing information, data usage, and other customized information that fits their needs.

“We are trying to build customer centric experiences,” said Sham Careem, Co-Founder and CCO of MoMac.  “Providers need to think how they can improve customer experience.”

The benefits associated with telecom operators providing things like self-service applications were highlighted in a recent white paper put out by Pitney Bowes (Troy, N.Y., U.S.A.) titled “Customer centricity in the telecommunications industry.”  According to the white paper, improving customer experience is a way in which to keep customers on your service, and by doing this, improving finances overall.

According to the whitepaper, the cost to acquire a customer is more expensive than it is to retain one.  As an example, the white paper explains that by acquiring 500,000 customer, the first year gross profit would around $-245 million, due to a low average revenue per user (ARPU), increased service rate and other factors of taking on a new customer.  If the service provider retains 440,000 of those customers for a second year, the gross profit will be over $350 million.  The increase is due to customers adding on more services, a decrease in advertising, as well as other factors.

In a previous interview with Kevin McShane, vice president of Portrait Software at Pitney Bowes, McShane shared more of the company’s views on customer centric experiences.

According to McShane, telecom operators are product-centric instead of customer-centric.  The operators are aligned by product, meaning someone owns the cable sector, mobile sector, high-speed internet section etc, but nobody owns the customer.

“When you ask a CEO who owns the customer, they usually say ‘everyone owns the customer,’” said McShane.  “When everyone owns the customers, nobody does.”

Instead, according to McShane, operators need to appoint someone to own the customers, and therefore be able to serve their specific needs.  Not only that, operators need to be able to service specific types of customers differently, whether they are “angel” customers or “demon” customers. 

According to McShane, the angel customers are the 20% of customers that generate 80% of a service provider’s profit.  The demon customers are the other 80%, who do not give a service provider a large revenue stream.

“The telecom industry doesn’t have it quite figured out,” says McShane.  “The airlines on the other hand, have VIP clubs and red carpets because they realized that 5-10% of its customers are much more valuable and so they differentiate their interactions.”

It’s not just differentiating interactions, but providing a unique interaction for each customer, that will create a personalized experience.

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