The current age of hyper-globalization has brought extreme competition and connectedness, making customer experience management key to staying competitive and relevant. As an industry, telecommunications has lagged behind in delivering stellar customer experiences.
This weakness means telcos that do champion customer experience (CX) can substantially differentiate themselves from the competition, and form lasting relationships with customers.
And to achieve this greater standard of CX, leading telcos & Communication Service Providers (CSPs) are adopting formal customer experience management (CXM) programs to track, manage, and enhance customer experiences throughout their journey.
Considering the critical role that CXM can play in helping telecommunications companies sustain and enhance their customer base, telco organizations must learn why they need to invest in customer service management and how they can do so.
Why telcos need to invest in customer experience management (CXM)
Offering a better customer experience should, quite naturally, improve customer satisfaction and retention.
Unfortunately, the telecom sector is falling short in CX goals – only around 31% of telco users are likely to recommend their telecom company to others, indicating either neutrality or dissatisfaction with the service provider.
Telco providers must, therefore, invest in CXM because:
1. Customer experience can become a brand differentiator in the telecoms sector
Customer experience is quickly becoming a brand differentiator across industries. In 2013, Customer Experience Magazine predicted that CX would overtake product and price by 2020 to become the main brand differentiator. And, according to Forbes, 89% of companies today compete primarily on customer experience.
With the lowest average of 31 on the Net Promoter Score, the telecom industry has a long way ahead to improve customer experience. Improving CX is crucial as they are willing to pay 16% more for better CX. Customers also place great value on customer service and after sales experience, with 77% and 78% of respondents rating quality of customer service and after sales experience as an important factor in choosing a mobile or broadband operator, respectively.
Considering the importance of customer experience for client retention and the inadequate investment in CX so far, telco customer experience management can be a notable brand differentiator, increasing the company\’s competitiveness in the telecommunications sector.
2. Exceptional customer experience can reduce customer churn rate
At 21% per year, the telecommunications sector in the US has one of the highest churn rates per year, meaning that around one-fifth of customers are lost every year.
The high churn rate, or poor customer retention, implies that customer needs are not being met adequately and companies must optimize their processes to keep customers at the center of their business strategy. This is especially important as customer acquisition requires 7 to 13% more investment than customer retention and a 5% increase in customer retention produces over 25% increase in profit.
With most customers placing a high premium on customer service and experience with 32% stating they would take their business elsewhere after one bad experience with a company, it is clear that customer churn can be reduced by building better customer relationships to solve problems and optimize customer experiences.
Among the most effective ways, then, to maximize profits is reducing customer churn through finding CX management solutions including leveraging customer data and customer feedback to create personalized experiences and meet customers\’ needs.
3. Good customer experience can increase revenues
According to a study by Infoquest, \”a totally satisfied customer contributes 2.6 times as much revenue as a somewhat satisfied customer, and 14 times as much revenue as a somewhat dissatisfied customer.\”
In addition, if a customer has had a good experience with your company, there is around a 72% chance that they will share the experience with 6 or more people, bringing more customers to your doorstep. Furthermore, customer-focused companies are, on average, 60% more profitable than companies that are not customer-focused.
The takeaway here is that customer satisfaction directly, and substantially, impacts revenue and profitability. Businesses that prioritize CX are thus better positioned to excel in competitive landscapes. Considering that up to $1.6 trillion is lost due to bad customer service in the US every year, and that a satisfied customer not only contributes more revenue than a dissatisfied one but also shares their experience with others, there is a clear link between good customer experience and higher revenues.
4. Telcos must compete with OTT providers
Telcos are not only competing with other operators but are also increasingly challenged by Over-The-Top (OTT) players. OTT players allow the exchange of voice, video, and text over an IP network, without relying on telco providers.
These players are cannibalizing traditional call and text revenues, adversely affecting the bottom line of CSPs. OTT players like WhatsApp and Apple iMessage account for 80% of messaging traffic, posing a strong threat to telecom operators.
CSPs must explore new revenue streams to circumvent losses to OTT providers, and CX plays a vital role in this shift. Telcos must form stronger relationships with their subscribers and identify new ways to deliver value.
Ultimate Guide to CX Management for Telcos
To benefit fully from CX transformation, CSPs are establishing formal customer experience management programs. CXM strategies account for a customer’s experience throughout their entire journey, and thus, the programs may require buy-in from marketing, sales, and customer support.
While the specifics of the program structure may vary, telecom operators’ core CXM strategy includes these essentials:
1. Mapping the customer journey
The first step to CX management is understanding the customer journey – i.e. how your business engages customers at each interaction point, across channels.
For CSPs, the journey spans:
- Discovery:
This is where a consumer learns about a company, usually through advertisements, research, or recommendations.
- Comparison between operators:
The prospective customer then usually compares different telecom companies, often focusing on factors such as products and services offered, prices, customer support, and user reviews.
- Purchase of service:
Purchase of service is only a part of the customer journey, not the end. Telcos can grow revenue from their existing customer base by improving the post-purchase experience and delivering value-added services.
- After-sale support:
Customer service and support provided after a sale are crucial in fulfilling customer wants and needs, making the way for consumer satisfaction, retention, and loyalty.
Mapping the customer journey can help telecommunications providers chart a strategy to optimize experience at every step of the journey.
2. Collect feedback and capture the Voice of Customer (VoC)
Collecting feedback at every touchpoint helps CSPs capture the Voice of the Customer (VoC) throughout their journey. This feedback helps understand customer behavior and preferences, providing valuable insights to design CXM strategy.
CXM programs use different metrics to quantify customer sentiments, most popular of which are:
- Customer Effort Score (CES):
Indicates how much effort a customer has to put in to find support to resolve an issue, get an answer to a query, purchase or cancel a subscription, etc. The metric helps CSPs identify areas to reduce friction.
- Customer Satisfaction Score (CSAT):
Measures a customer\’s satisfaction with a product, service, process, or customer support interaction by simply asking how satisfied they were. The CSAT helps identify the touchpoints in the customer journey that require improvement.
- Net Promoter Score:
Measures a customer’s experience at a given touchpoint, by asking them the question:
On a scale from 0 to 10, how likely is it that you would recommend our company/product/service to a friend or colleague?”.
- Time to Resolution (TTR):
Measures the average amount of time it takes for a customer query or complaint to be resolved. Monitoring TTR helps you to better categorize customer queries so they are handled by appropriate personnel. It also helps catch internal processes that may be slowing down resolution.
3. Implement a closed-loop feedback process
A closed-loop feedback process is one in which you contact clients that have previously provided feedback to start a conversation on improving CX.
A closed-loop feedback program goes beyond simply using consumer feedback to make improvements. It digs deeper to find innovative and effective solutions and enables transformation in the customer experience by responding to client concerns, acknowledging and accepting complaints and praise, and showing gratitude for feedback.
The benefits of implementing a closed-loop feedback process include a better understanding of what consumers expect, how your services match up to their expectations, and what sort of improvement projects may help transform your CS.
4. Enable cross-functional compatibility
Providing an exceptional customer experience requires alignment among the different teams within a telecom company. All teams – including sales, marketing, customer service, and IT – must adopt a customer-centric approach to provide a consistent, personalized consumer experience.
Customer experience is the sum total of all engagements and interactions a customer has with a company – including, for example, interactions with the marketing department when viewing advertisements, the sales team to make a purchase, and the customer support team when calling to resolve a query. Since CX encompasses interactions with multiple departments, it is fundamental for the different teams and departments to be on the same page with regards to a CX strategy.
For example, marketing and product development teams must be aligned on how to market a certain product. Products are created for consumers, and should thus be designed keeping their interests in mind. When designing an advertising campaign for a new product, product and marketing teams must meet to decide how the product can be marketed to customers, keeping in mind not just the functionalities and specifics of the product but also the interests and expectations of the consumer.
Furthermore, alignment between sales and marketing can help companies become 67% better at closing deals.
Companies can enable cross-functional compatibility by consciously adopting a customer-centric mentality within the organization, setting common goals for all departments, initiating discussions on interdepartmental collaboration for improving CX, and sharing customer data in real-time.
Furthermore, telcos should also work to improve their employee experience (EX), which has a direct impact on CX. Companies with highly engaged workers report 20% higher sales, as engaged employees provide better customer service, which leads to increased customer satisfaction.
In essence, aligning all teams towards customer centricity and improving the EX through leveraging helpful tools and strategies can help to upgrade your company\’s CX.
5. Leverage the right technology
Backend and customer-facing technology prove vital to your CEM strategy. Backend technology is technology that improves CX without directly interacting with the consumers, while customer-facing technology interacts with and is directly accessed by customers.
Leveraging artificial intelligence and big data together can help to collect consumer data and use data analytics to derive information that can be used for improving customer experience. AI-powered technology can help to understand and predict consumer behavior, so you can meet needs and introduce new services for better customer experience in telecom.
Furthermore, introducing automation in telecoms\’ customer-facing processes can allow standardization in certain areas and quick and effective resolution of consumers\’ queries. For instance, automated messages can ensure that all customers remain up to speed on new developments and updates in the services offered. Furthermore, leveraging automation to provide self-service options such as chatbots can help customers resolve simple queries without having to wait to speak to an agent, thus improving their experience with the company.
Robotic process automation, too, can prove useful in automating repetitive, tedious, rules-based tasks that do not require complex decision-making. Automating processes through RPA helps to free up customer support representatives to allocate time to complex problems that require human intervention.
In addition to the above-mentioned tools, other CXM tools such as Customer Relationship Management (CRM) software can help to manage customer data to provide personalized service, thus improving CX.
6. Have a clear plan for sales enablement
Sales enablement means providing information and tools to your sales team to help them sell more effectively. A clear plan for sales enablement should impart customer-centric information and tools that help sellers better understand customers, their hopes, expectations, and perceptions, products and services suited to different customers, and how to personalize their selling technique to customers.
An effective sales enablement plan would not only help customers feel understood and cared for, but would also help the sales team sell more.
Important considerations while creating a customer-centric sales enablement plan include:
- A mission:
So brand values are aligned to your selling strategy and your sales team knows why it is selling what it is selling.
- Mapping out the customer journey:
To understand at what point in the customer lifecycle the customer decides to make a purchase
- Alignment between sales and marketing teams:
To pursue common goals to satisfy customers and the increasing requirements in a competitive market.
- Collection of and access to customer information:
To provide personalized experiences to customers while saving time by tailoring interactions based on previously acquired information.
- Clear goals and KPIs:
To track progress and re-evaluate the strategy when needed.
Conclusion
Considering a climate of intense competition, in which telco organizations are continually facing competition from within and outside the sector, telecom organizations must create effective customer experience management strategies to remain relevant.
When implementing a CXM strategy, it is essential to take on board all teams in the organization to arrive at a consensus on providing a customer-centric experience. Not being on the same page regarding the CX strategy can elicit resistance from within the company when implementing the strategy. Therefore, cross-company collaboration is indispensable in making CXM a success.
However, creating and implementing a CXM strategy is not a one-time process. CXM is an iterative process that will require continuous reevaluation and improvements based on evolving customer wants and needs and developments in the sector. Only through a constantly evolving customer experience management strategy can telco providers deliver exceptional CX and ensure customer satisfaction.
