Part 1 of this series questions whether the heavy investments telecoms have been making to achieve long-term goals are the best CRM strategies or whether less-costly projects with faster paybacks might make more sense.
Telecom innovations have turned the entire globe into a neighborhood. The ability to carry a portable device, such as a laptop computer or a cellphone, has made it possible for consumers to communicate with one another across short or long distances continuously. Ironically, while telecom operators provide a means for improved interpersonal communications, the operators themselves still have a long way to go to make communications with their customers more personal.
This isn’t for lack of trying. The North American telecom sector spent US$430 million in 2008 on customer relationship management programs, according to Infiniti Research.
Telecom operators utilize perhaps the most complete array of IT tools of any industry simply because their entire business is based on technology. A direct mail apparel retailer may use CRM as a marketing tool, but the core business is still clothing. For telecom operators, the core business is based on information technology — both hardware and software — from myriad cell towers and servers to Internet marketing and billing programs.
Struggle for Customer Empathy
Yet there is much more in CRM that telecom operators not only can do — but must do — to hold current customers, gain new subscribers, and more profitably manage their consumer information resources.
Currently, the use of CRM among landline, broadband, and cable/satellite providers is fairly similar. Traditional landline phone service providers tilt toward using CRM in an operational context — for marketing, sales, and service, said Chandrababu Naidu, telecom analyst at Infiniti.
Wireless carriers tend to emphasize using CRM more for analytical purposes, data storage and management, generating business intelligence, and decision-making, he added. However, the growing trend to convergence will have a tendency to flatten the difference in approaches for using CRM.
“Telecom carriers are struggling to fully grasp the customer experience,” Becca Goren, worldwide marketing manager for communications, media, and entertainment at SAS Institute, told CRM Buyer.
One reason telecoms have difficulty in appreciating the full customer experience is that they engage customers via a functional approach rather than a personal one. For example, a telecom’s “tech support” department sees a consumer as a problem needing a solution, while the billing department only has records related to payments, and marketing sees an up-sell or cross-sell opportunity. No one sees all of these functions in a holistic way.
One key to improving the customer experience is to reduce internal “silos” or barriers by integrating all the information on a given customer.
Telecom Integration: It’s a Vision Thing
“Sharing customer insights can help telecom operators understand and improve that experience,” Goren added. “Information such as call detail records and trouble tickets can better drive product development, prioritize service and improve the customer experience. Because the experience is often specific to a product or service, it is also important for carriers to understand how the customer’s experience on a smartphone varies from his or her experience on a fixed line or a home computer’s Internet.” [*Correction – April 13, 2010]
Integration based on delivery channels is increasingly important because of the trend toward the convergence of various wired and wireless products.
“Consumers bleed across many of these sectors, and the key is to integrate these channels into a more cohesive communications strategy,” Ken King, director of telco and media convergence at SAS Institute, told CRM Buyer.
“For example, if a customer is late with a payment, why can’t a message be streamed to the set-top television box for Verizon’s consumers that are using that telco for TV service?” he asked.
“The industry is moving briskly towards quadruple convergence — where companies offer broadband, television and telephone, and wireless services on one bill. This shift is compelling operators to adopt different approaches to provide coordinated and efficient customer service that requires CRM applications with the ability to support converged offerings,” Naidu told CRM Buyer.
In general, the telecom sector has had a tendency to focus CRM efforts on specific “pain points,” according to Scott Kolman, managing director of customer management and product marketing for Amdocs.
“An operator may choose to enhance its contact center operations by implementing a new unified agent desktop. While this allows the operator to realize direct benefits from the implementations, it has not necessarily created an environment whereby there is cross-channel consistency or the sharing of customer insight,” Kolman told CRM Buyer.
That narrow approach also fails to reflect changing consumer trends — today’s customers increasingly wish to communicate and interact with the operator on their own terms.
“Operators could be more productive and have a greater impact on customer satisfaction and loyalty if they stepped back and focused on creating a multichannel customer experience with consistent business processes and flows that are utilized by all channels,” Kolman said.
Telecoms Must Be Smarter Than Devices
In the future, telecoms will need to utilize the tools of CRM on a broader enterprise basis. They will also need to be smarter about how they employ these tools.
For example, in addition to integrating contacts across channels, telecoms will need to provide a greater degree of customization in offering their services, Kolman noted.
“Gone are the days when an operator can create three service plans and expect the customer to choose from one of them. With growing competition and a higher level of customer expectations, the need is to present offers relevant to each individual,” he said.
Telecom Web sites are not as advanced as those in financial services, travel, or even general retail, Kolman contends, largely because of the inherent complexity of service offerings or “bundles.” Improving and simplifying the online channel remains an element for improvement.
“One area that telecoms are seeing a truly big bang for their buck is with optimization analytics,” said SAS Institute’s Goren. “Marketing optimization is a growing area — less mature than campaign management, for example, but the return on investment opportunity is tremendous.”
The idea behind optimization is to relate the use of tools such as audience segmentation and customer analytics to overall corporate objectives. Companies have to make decisions about targeting the right customers with the right offers while staying within budget and channel capacities — and without cannibalizing future sales or saturating customers with too many messages.
CRM Has a Role in Better Bottom Lines
Optimization helps to balance these requirements. By incorporating goals such as promotion campaign budgets, audience parameters, and channel choices into the CRM effort, telecoms can manage their resources better. Carriers outside the U.S. who are required by law to track these costs have experienced unexpected benefits resulting from understanding where profit lies.
Vendors targeting the telecom sector that can meet the industry’s emerging requirements should be well rewarded, with North American telecom CRM spending set to reach $510 million annually by 2012, according to Infiniti.
Recently both SAS Institute and Amdocs rolled out enhancements to their offerings that telecoms could productively utilize. Amdocs’ expanded CES-8 platform now includes features designed to shorten new product development, improve cross-channel contact with customers, and operate more cost-effective CRM applications. With an eye on the telecom sector as a primary target for implementation, SAS introduced its Customer Links analytics program for capturing customer insights from social networking activities.
“Carriers need to view customer information as an asset to be leveraged,” said Goren. “The telecom market is changing rapidly. Extreme competition as convergence continues, flat revenue growth from data services, and churning customers have the combined effect of putting fear into even the most stable of carriers. There’s an opportunity for telecoms to use deep customer insights to drive the new revenue models, reduce churn of profitable customers, improve average margin per user, and the customer experience.”