How telcos can win and retain customers with analytics
In the shifting telecommunications landscape, identifying competitors is more difficult than it used to be. Telecommunications companies (telcos) are no longer just competing among themselves for customers – they must now fend off challenges from device manufacturers and over-the-top (OTT) services running on their network infrastructure, as well as popular digital service providers such as Amazon, Netflix, and Spotify.
Price is no longer an effective differentiator. Years of competing on cost in developed markets has resulted in the commoditisation of connectivity services and squeezed margins.
Instead, industry-leading telcos are now moving towards customer experience to optimise revenues. A recent study by Analysys Mason showed that every 1 percent increase in a telco’s Net Promoter Score results in a 4 percent decrease in churn.
This opportunity is powered by large data volumes, and the ability to derive insights from this data with advanced analytics. But most telcos just don’t have the analytic horsepower to differentiate their service — yet.
Here are three steps that are vital for competing on customer service powered by analytics.
Create a company culture of analytics
Artificial intelligence and machine learning are the buzzwords of the moment, as telcos and other firms strive to turn Big Data into big value. According to McKinsey, companies that inject big data and analytics into their operations show productivity rates and profitability that are 5 to 6 percent higher than their peers.
Although embedding advanced analytics into operational and decision processes has been proven to increase speed, agility and efficiency impact, many telcos are still some way from being able to use these technologies to their advantage.
The benefits are clear, yet analytics has traditionally been the domain of specialists that haven’t necessarily had the business acumen to know which questions to ask of the data. This is changing, as data science continues to become more mainstream. Telcos are seeing clear benefits from being able to apply analytics in areas such as Customer Value Management, informing retention investment strategy and network operations.
Most, if not all, telcos have embarked on some form of ‘digital transformation’ journey in recent times; it’s the business challenge of our time. Telcos need to use data-driven advanced analytics to as part of this process of automation, to answer fundamental questions about how to remain profitable in saturated and commoditised markets, and to make the leap to deliver digital-age customer experience, unlocking new growth from emerging technology.
Driving this transformation requires leadership. If decisions are to be made from data insights, then C-suite buy-in is crucial to ensure investment in the right people and technology. The C-suite must then communicate clear business goals to IT to establish how data analytics can impact these.
Design the user experience from the customer’s perspective
User experiences are often built around existing system limitations, instead of truly being designed with the customer in mind.
To stay competitive, telcos must foster a strong and enduring customer relationship, which requires a more personalised and holistic approach. To achieve this, they must build actionable strategies with the customers at the core based on data insights. There needs to be an efficient way to ‘join the dots’ of an overall customer level relationship across multiple legacy billing systems and product lines. Agents, bots or other self-service capabilities need to instantly recognise things like recent service issues or sales enquiries and base the next action on the right context. We’ve all experienced the frustration of having to interact with many parts of a company before giving up on obtaining a resolution.
They also need to be agile enough to continuously compare these different strategies to better accommodate constant shifts in customer needs and behaviour. This will result in meaningful customer interactions and ultimately, improved loyalty and satisfaction.
The path to a customer feeling that they are understood and treated as an individual rather than as a segment lies at the intersection of digitalisation and intelligence, which means it is underpinned by analytics.
Understand the business context in which the customer operates
Good customer experience also requires telcos to have the most complete and up-to-date picture that their data allows.
Telcos have access to incredibly rich contextual data that can be streamed in real time, such as location, time of day, type of use. All of this data can be used to understand customers’ behaviour and provide insights that enable more personalised services to be offered via the right channels, intelligently identifying who is likely to convert and how to contact them.
When coupled with machine learning capabilities, the power to learn the “unknown unknowns” from outlier data leads to decisions that meet customer needs. Therefore, all customer interactions can be based on up-to-date knowledge and personalised to the context of each situation.
The ability to constantly analyse things like customer web chats in real time will also offer insights that helps to both identify things like service issues and demand for products and services. This can drive quick actions to rectify the problems before a fault becomes a serious threat, or to inform trading investment activity and time limited offers.
Similarly, such data will allow network operations to better predict and mitigate network capacity and maintenance, thereby reducing the risk of network downtime, customer inconvenience and in the long run, impact to revenue.
- » Net Neutrality: Carriers have already begun throttling services
- » Study: UK consumers face 82% price rise from their ISP post-contract
- » Vodafone is doubling the size of its European NB-IoT networks
- » Opinion: China’s huge 5G merger could work in T-Mobile’s favour
- » Almost 20 percent of UK roads suffer from little-to-no mobile signal