Telecommunications companies have to be constantly on their toes since the products and services have been growing and changing at a phenomenal speed. Product development capabilities as technology changes drive consumer demand. However, the most important thing to run a successful business is to understand the customer. Owing to the competition and the availability of choice there has been a significant churn in the customer selection for Telecom products and services. Products and pricing plans are developed and discarded in an attempt to retain existing customers and drive new business. Deregulation and increasing competition is forcing companies to move from traditional product-centric operations to consumer-centric operations. The ever increasing customer expectation for newer and better services with a lower cost forces telecommunications service providers to increase their efficiency as never before and reduce their margins and ARPU.
With the increasing needs and expectations, customers tend to accelerate the competition in the marketplace. With better choices and varied options, customers are more inclined to look for better services. Acquisition comes with no barrier of binding the customer to the service provider. It has now become important to focus on customer retention than customer acquisition. The cost of customer acquisition as compared to customer retention is now reducing.
Telecommunications vendors have to analyze their customers’ needs and tailor all their processes in the value chain so as to efficiently and effectively meet their customers’ requirements and increasing demands without impacting their profitability. The major assumption here is that telecommunication companies have a large volume of structured and rich database which can be used to turn large volumes of data pertaining to their customers and services into actionable information using Analytics. Business intelligence/ Business Analytics systems can significantly help in almost all aspects of the value chain to achieve this objective.
In Telecommunications industry, many earlier strategies for business acquisition and development are no longer viable. Organic growth and aggressive market capturing is not the mantra for today but Inorganic growth with a safe playing ground holding customer retention is the new tune they have to play. Monopolies and companies with unique geographical access is a bygone era. Technologies are rapidly adopted by competitors, and breakthrough innovation in either products or services is rare. Optimization of key business processes is the need of time especially with limited resources and the recent brunt of the recession. Instead of serving all customers, companies want to serve optimal customers those with the highest level of profitability and lifetime value as high priority and put customer acquisition as the second priority. Instead of looking backward at business performance and making ex post facto adjustments, companies are seeking to understand how perform optimally and do a predictive analysis on the key performance indicators. Usage of BI and BA tools to make accurate forecasts of future performance so they can react in advance of situations. Instead of throwing money at business problems, they seek to optimize their use of capital and focused working on retention of customers and do a Customer focused business.
Customer Focused Business
The business is driven by the ’Customer‘– a fact that necessitates knowing the customer better. Business has to be customer centric. Customer centricity means to understand and be informed about
- Customers’ requirements and expectations.
- Customers’ changing behavior, demographics and psychology
- Customers’ behavior pattern and activities, and the external factors which impact the customer
Business has to focus more on customer retention and customer care. A greater challenge lies in influencing the customer to be with the organization. The proactive and reactive analysis approach to CRM will help the decision making for telecom service providers
Customer Proactive Analysis
- Customer Segmentation
- Customer Lifetime Value Analysis ( CLV )
- Customer Profitability
- Customer Loyalty
- Customer Cross Sell Ability
- Target customer market
- Campaign effectiveness
Customer Reactive Analysis
- Customer Service Feed-back
- Customer Acquisition, Retention & Attrition Analysis
- Customer complains/ issues/ tickets analysis
The Reinartz and Kumar model below showcases the way in which one should focus on a customer in the rapidly changing world of today. A customer is King but we should be able to Redefine the Strategy on which King to Coronate.
*** More detailed report is present separately
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