News article

Retaining the Digital Customer: The Rules Have Changed

Author
Adhish Kulkarni
SVP Solutions
21 Oct 2019

Retaining the Digital Customer: The Rules Have Changed

In the telecommunication industry’s emergent digital landscape, it’s no longer enough to treat or charge customers only at the SIM card level. Rather, the ability of CSPs to engage customers at a household level is becoming central to profitability and competitiveness.

This is confirmed by, among others, the leading analyst firm, Ovum who noted in its 2019 Trends to Watch: Telecoms Operations and IT that among the most pressing requirements service providers face is:

(The) need to make their organizations customer-centric and data driven in the same way that the web-scale DSPs have done. This requires not just investment in platforms but also the implementation of appropriate data management strategies and customer-centric processes.

Despite the evidence, too many CSPs aren’t yet where they need to be. The evidence for this is compelling. New subscriber growth has slowed and profits have been challenged through price wars - often leading to the self-destructive commoditization of services, reducing monthly ARPU at the same time that the cost to serve and consumer demand for connectivity speeds/volume of data consumption has increased.

Furthermore, Mobile, Fixed Line, Broadband and Media/TV convergence or partnerships have driven an increase in products and services available to consumers while IoT, other new delivery paradigms and new types of devices are driving the trend for individuals to use and pay for multiple lines simultaneously.

To address these issues, Ovum’s research further highlights the vital role of partners and solution providers who offer ‘agile delivery models, provide solutions that can be deployed and integrated quickly, and make effective use (within reason) of cloud-based delivery models and cloud-native architectures.’ The critical nature of addressing these requirements, illustrated in the chart below, cannot be underestimated.

In the present Age of Customer Centricity, effective customer engagement requires a deeper understanding of user preferences, profiles and requirements in order to accurately capture prospective interest in relevant products and services and, by extension, to maintain brand loyalty. Traditional approaches to customer engagement (batch-based, below-the-line campaigns and static, transactional points-based solutions) must therefore give way to a set of new, more engaging, offer and loyalty programs that are built for a generation of demanding, social media-empowered digital natives.

Pillars of engagement

Technology (in the form of applications) is the basis for being able to meet this new demand and the advent of the digital consumer is driving the industry towards innovative solutions and approaches. These address what we identify as the four key pillars of action, the response to which we believe will define how brands deliver customer loyalty in the always-on, connected world and how successful they are at doing that. These pillars are:

Using analytics to understand customers - The amount of data available to brands is growing at an exponential pace as more and more consumers use digital channels to interact and transact. This means digital footprints that provide insight into the entire customer journey from initial awareness through to post-purchase satisfaction are being created. For CVM Campaign and Loyalty programs, leveraging this data should form the basis for personalization, reward relevance and designing superior customer programs and it is therefore critical that CSPs are able to deploy solutions that fully leverage the insights that their raw data holds.

An evolved and intelligent approach to Customer Engagement - Focusing on customer engagement has to become a priority for CSPs, indeed for any business operating on a digital platform. Loyalty is particularly critical if customers are to be kept satisfied and long term, active relationships with the brand are to be established. The digital channel allows a heretofore unforeseen level of engagement with customers in real-time at what can be called the ‘moment of truth’, no matter where the customer is. Intelligent customer engagement, for example via gamified mechanics, has the potential to keep subscribers excited and satisfied.

Creating an open partner ecosystem delivers choice - The “walled garden” approach of traditional rewards programs never really worked. And as a result, it is giving way to a more open ecosystem of partners where loyal customers can ‘spend’ their credits in a wider array of ways, via a host of different partners. Tapping the digital channel effectively demands the opportunity to integrate with these (physical and digital) partners on a global scale. As a result, there is a trend of openness that is here to stay, and it will remain a key element for brands that want to remain relevant and to secure ongoing customer engagement through their loyalty programs. For CSPs, new technologies and applications are required to manage open partner relationships with important brands.

Meeting the needs of the always-on and omni-channel - Customer Value, Retention and Rewards Programs have to adapt to an always-on consumer who is channel agnostic, expecting the brand to engage on email, app, or twitter or SMS in real-time. Giving the customer what he wants when and where he wants it is difficult, but it also presents an opportunity to engage in a highly relevant and timely manner. CSPs must find ways to provide meaningful cross-channel experiences at the right level of frequency.

Building the four pillars means investment is required; but investment in what?

The Four Pillars of Engagement, combined with changed consumer expectations in the digital era, suggests that CSPs urgently need to re-think or even reinvent how they engage their customers. New tactics are clearly needed, urgently. Identifying more effective ways to manage a customer‘s brand journey are becoming table stakes for those who want to remain competitive. CSPs simply have to deliver a far more personalized experience.

The challenge here is that these goals cannot be achieved using legacy marketing technologies. As a result, over the coming months, it’s safe to predict that CSPs will have to decide how to make vital investment decisions in the area of customer engagement.

There is evidence that this reality has been recognized in the industry because a closer look suggests that process of investment is slowly starting. Applications addressing requirements in areas such as self-care and provisioning in particular have seen increasing attention in recent months. Ovum’s survey predicts that this year, the top three areas of spend for CSPs are likely to be customer lifecycle management, digital product catalog, and chatbots and virtual agents. These, furthermore, are likely to be significant committments.

Given the breadth of change needed, a piecemeal approach to operating effectively in the digital landscape won’t be sufficient for success. Patchwork infrastructures and workarounds with existing applications won’t be the answer. Joined-up thinking and joined-up operations, a new, lean customer-centricity where experience is prioritized by both operations and IT systems, is needed.

Data represents a particular challenge because it is axiomatic that improving customer-facing processes requires better access to data sources which may presently not be viable. This is why data management has been a focal point for early CSP digital transformation efforts. Effective customer engagement means bringing together multiple data sources. Good-quality data and improved data storage are the backbone of improved customer engagement and the innovative use cases that can be offered to customers.

Engagement driven by personalization means the unification and standardization of communications across multiple channels and categories of customer-related operations is necessary. So the new enagagement technologies need to include a broad mix of capabilities. Systems will have to integrate both digital and non-digital customer channels as well as back-office platforms such as billing and product catalog, and front-line applications such as sales and marketing. A wide range of functions will need to be better aligned to support the customer experience including cloud infrastructure, unified customer data management, security and compliance mechanisms, interaction intelligence, and process automation.

The requirement the industry now has to meet lies in identifying a new type of Customer Engagement Platform (CEP). This will be a technology that moves away from traditional product-centric and siloed approaches and replaces legacy IT with a holistic approach to customer engagement. Ovum’s research confirms that CSPs are already increasingly investing in these sorts of broad-based customer engagement solutions rather than contunuining to rely on the point solutions of the past. If they want to succeed in the market, they don’t have a choice.

Click the below link to read the full article in The Fast Mode:

https://www.thefastmode.com/expert-opinion/15722-retaining-the-digital-customer-the-rules-have-changed

Author
Adhish Kulkarni
SVP Solutions
21 Oct 2019