The Blogging of Bain 337

shapefinger4's blog

header photo

Customer Experience Operations - The Telecom Market place Ahead


The telecom agencies have always followed an improvement trajectory before decade through rise in client base as well as adding considerable numbers for their annual revenue. They've got kept the interest rate with all the competitors and possess unquestionably game with amazing success before. But in the present times, they are facing with an enormous challenge of adaptation for the matured, highly penetrated markets coupled with global recessionary effect. Therefore, a shift in paradigm to evolve their business models to the scenario is highly required and also the necessity of the hour is the customer experience management to realize an increased retention ratio.

Challenge in modern telecom industry - Customer retention

In the current day telecom industry which has attained high penetration level, obtaining a customer gets even costlier. Industry analysis claims that only 25% of the acquired customers stick with the business after an year's some time to while on an average only 20 -30% in the entire subscriber base is revenue earning/profitable customers. This dugs an in-depth hole inside the balance sheet of the telecom providers. Due to the churning aftereffect of the customers can use, there is a huge imbalance made in gross additions from the customers and net addition.

Forward path: Approach to customer retention - Customer experience management

Therefore, the most important challenge for that telecom operators worldwide is managing customer churn. It affects profitability of the company if the customer churns prior to company can earn back an investment it incurred in obtaining the client. Therefore, it is extremely essential to indentify the profitable customers and retain them.

Retaining the profitable customers includes 2 steps:

1. Identifying the revenue earning customers through the entire subscriber base
2. Managing the customer experience and customer value for that revenue earning customers

Identifying the Revenue earning customers

The telecom providers have to define their business logic for identification from the revenue earning customers, for instance: the shoppers with usage over ARPU are called high valued customers, or in the event of pre-paid, customers recharging over INR 250 a month (In Indian scenario) are believed as revenue earning. Depending on the business rules the whole customer base must be segmented into revenue earning customers and non-revenue earning customers. Managing customer ARPU Average revenue per customer. Managing customer data in scale of 40 - 50 millions can be a challenge. They can do this by using various business analysis tools (eg: SAS, SPSS, Teradata, etc.).

Customer experience management

After the identification of the valued/revenue earning customers, managing those identified group of clients are most important.

Concentrating on customers instead of products

During the last years, the telecom agencies have targeting introduction of new products. They have got originated new products/services and then sought to get or create a industry for them. But increased competition among the existing agencies and minimize barrier to entry for new players has ended in the expansion in predatory activities in the telecom industry. Moreover, the price of acquisition of clients has increased considerably. Hence, nowadays in this times, there's a gradual shift in focus from introduction of the latest products for acquiring customers to customers' experience management is observed. Currently, the Telco's have to focus on retaining the existing valued customers and targeting more wallet share of every customer by making more value and improved customer experience.

For example: In the united kingdom, O2 has aligned its func

Go Back