To thrive in today’s competitive mobile broadband market service providers must deliver superior quality of experience (QoE) and enrich the customer experience. With growing pressure to reduce churn and increase revenues, service providers need to have a better understanding of how customers use their services. They need customer experience solutions that provide analytics to derive actionable insights from their wide-reaching customer, network and service data.
Customer experience: the new differentiator
Mobile service providers are constantly searching for new ways to stand out from the competition. In mature markets, it’s getting tougher for providers to differentiate with their networks, device portfolios, and product offerings. Continued improvement in these areas remains essential. But the game is changing, and providers need to rewrite the playbook on differentiation.
The customer experience is attracting interest as a means to differentiate. Regulation and number portability have made it easier than ever for users to churn. As a result, many service providers are shifting their focus from customer acquisition to mass-market retention. Service providers need to keep the customers they have, extract more value from them and, if possible, lure customers away from the competition. These providers believe that a superior quality of experience (QoE) can help them satisfy customers, sell more services and earn more customer recommendations.
The value of QoE
Customer experience and QoE go hand-in-hand. Churn and cost reduction are key drivers for today’s QoE transformation strategies. On average, it costs a North American service provider about US$400 to acquire a mobile customer. With annual churn rates ranging anywhere from 30-50%, a provider with a million customers may need to replace 300,000-500,000 customers each year, spending US$120-200 million in the process. Given these numbers, it’s not hard to see why service providers worry about churn.
The desire to differentiate the customer experience and improve QoE is also inspired by the high cost involved in supporting increasingly complex and diverse mobile offers. Device and service complexity create problems for customers and raise call volumes at service provider help desks. Simply put, today’s mobility issues are tougher to handle and take longer to resolve. High average handle times hinder QoE, frustrate customers and inflate support costs.
QoE redefined
Quality of experience can be difficult to pin down. Traditional definitions of QoE center on network quality and performance. Most service providers embrace and act on these established definitions. They keep their focus on delivering the fast, reliable network coverage customers expect. In some cases, however, service providers can be tempted to over-invest in the network as they struggle to understand how good is “good enough” to meet customer expectations for quality.
There’s no denying that network performance is central to QoE. But service providers can still do more to improve the customer experience.
Information offers a path to a better QoE. Service providers have detailed data on every customer, including device usage, billing history, account type and help desk call frequency. This data can help service providers not only understand how customers interact with the network and services, but also how to improve this interaction. But it means that service providers must look beyond the network toward a more holistic vision of QoE.
Analytics deliver insights
Combined with a clear vision and barrier-free execution, customer experience analytics can help service providers reduce churn, limit the cost of acquisition and increase CLV. For service providers, the bottom line is where analytics can make a significant impact.
Consider a service provider with 10 million customers. With a 5% reduction in churn — from 2% per month to 1.9% per month — the service provider could save US$30 million per year in acquisition costs and lost revenue opportunities. Analytics can contribute by delivering actionable intelligence that enhances customer QoE and addresses factors that influence churn. For example, analytics can be used to identify a faulty cell where a large number of high value customers are located. The engineering or network operations group can then put priority on the resolution of that network fault because it has a large financial impact. They can even take an additional step to message those customers impacted by that issue. Proactive support helps customers enjoy a better QoE while reducing their propensity to churn.
Analytics can generate revenue, too. One way is by improving upgrade success rates; that is, by helping the service provider sell additional services to existing customers. Analytics can improve up-sell capabilities by helping to propose the right upgrades at the right time to the right customers, while increasing service provider revenue and incremental cash flow.
3 Strategies for success
There is no “one-size-fits-all” approach to analytics and delivering customer experience solutions. Each service provider must understand and address its own unique challenges. These challenges may include cutting costs in the call center, maximizing return on network investment or increasing net promoter scores. No matter what the challenges, service providers can succeed by focusing on 3 key strategies.
Adopt a holistic approach
Service providers manage immense volumes of data about customers, services and networks. By evaluating, using and applying this information they can gain a more complete understanding of their customers and how they interact with the services and the network. Armed with comprehensive, data-driven insights, service providers can improve the customer experience.
Break down internal barriers
Many service providers struggle to use and capitalize on the information available to them. Why? Often, it’s because they lack an ability or willingness to share customer experience data across networks and organizational domains.
A superior QoE is built on effective working relationships between internal organizations. Every group — from customer care and marketing to engineering and network operations — must work together. Service provider personnel need to share a common understanding of objectives, expectations, and how analytics can help the organization at every level.
Develop a clear vision
A clear vision of how QoE fits with the business objectives, competitive stance and customer relationships is paramount. To succeed, the decision to deploy customer experience solutions must have buy-in and direction from the executive level. Today, more and more service providers recognize this need and are putting senior executives in charge of customer experience programs. Typically, these executives are established leaders who can influence budgets and priorities. They drive positive change by working with various stakeholders and breaking down silos that separate disparate organizations.
The value of insights
By mining and analyzing data, service providers can broaden and improve their understanding of customers’ experiences, preferences and behaviors. And with access to insights gained through analytics, service providers can predict customer behavior and improve their response to it. These improvements can help service providers transform the customer experience.
Analytics can also help marketing organizations increase utilization in specific parts of the network. For instance, analytics can identify underutilized cell sites and determine which customers are served by these sites. Using this information, marketers can direct targeted offers to these customers to entice them to use the network more often at a particular time of day, or dynamically when the network is underutilized. These targeted offers can improve QoE and increase traffic-based revenue and CLV.
Create a positive customer experience
Data-driven insights about CLV and churn offer real value to service providers. To tap the potential of these insights, service providers need easy ways to access and apply them.
Reports and dashboards provide aggregated information from diverse sources and present it in formats relevant to specific groups within the service provider organization. It’s then up to the service provider to apply these insights to actions like up-sell offers, incentives and help desk exchanges. The success of these actions can depend on many factors, including timeliness, customer appeal, execution and communication.
Beyond reports and dashboards, the next step is to automate the delivery of insights to touch points where they can positively influence the customer experience. These touch points can include customer help desks, self-service portals and app stores. By acting on these insights service providers can build CLV, strengthen customer relationships and prevent churn.
To contact the author or request additional information, please send email techzine.editor@alcatel-lucent.com.