From a blog first posted on LinkedIn by Honore’ LaBourdette, VP Market Development, Telco NFV Group. VMware.
Have you heard the one about the Telco with good Net Promoter Scores? Well I’m not surprised – until recently, no one had. But that’s all changing as Telco becomes the latest (or as some might complain – the last) industry to embrace good customer experience.
I’m not really stating anything controversial to say that the typical perception of Telco is not an image of the most customer-friendly industry. But it is, as I say, all change ‘round here.
The type of modernisation that certain telcos have in their sights (including, according to this blog, Orange and Optus) is now nothing less than a necessity for the whole Telco sector. Consumer expectations have changed across multiple industries and the marketing mantra for customer satisfaction is: experiences not products. Increased connectivity through mobile and social has led to more empowered consumers. All telcos have recognised this at pretty much the same time, which has meant experience is becoming a key battleground for competition. And the CMO has been thrust to the forefront of battle.
The weapons of engagement
In a completely saturated Telco marketplace, customer retention becomes a critical imperative. It costs much more to find new customers than it does to retain existing ones. Which means it’s a driving factor in the need to invest in customer experience. Some of the ‘weapons’ in the CX arsenal today include:
• Artificial Intelligence
• Speed to market
• New products and services
These are all well and good and are proving their worth across other sectors too, but getting them up and running and then sustaining them in a ‘fresh’ way takes time. And more pertinently – costs money.
New challenges, new revenue channels
A recent blog by Constantine Polychronopoulos on Monetizing the Network looks at some of the new ways in which Mobile Network Operators are generating this much-needed money. They’re under significant pressure to diversify revenue streams for a number of reasons including the erosion of profit by Over The Top (OTT) services. PwC report that revenue per customer is falling in the telco space in nearly every region. When you consider that nearly a quarter of the global market will be using messaging apps in two years from now, the threat telcos face becomes starkly clear.
PwC’s Telecommunications Trends report suggests that telcos need to be “in the vanguard of adopting digital technologies … state-of-the-art infrastructure, sufficiently flexible to handle new and profitable monetization opportunities. Network enhancements could also position your company to take back the technological advantage from OTT providers.”
Telcos are spending significant money ($224bn in 2016) on Mergers and Acquisitions (PwC) in order to diversify their revenue streams or buy out competition. One recent example is AT&T who have bought Time Warner.
Breaking shackles and moving forward
Monetizing the network achieves three simultaneous goals. It stems the OTT services tide; it builds customer loyalty: it improves revenues. Achieving the monetisation depends of three simultaneous abilities. You have to understand your customer; you must deliver personalised services; the network must be capable of responding to the new demands you place upon it, to meet the new demands your customers are placing on you.
If the answer to shrinking ARPU is simply to change the network, that may present a tricky enough challenge. It’s more fundamental than that, however. This is not just a tech issue, although new technologies will play an increasingly pivotal role in making change possible. More than that, it’s about more intelligent marketing, more customer understanding and more preparedness to reassess underlying cultures within the company. NFV (for example) can’t be solely an technology conversation. Marketing, product and experience job functions will be essential for leading telcos into this brave new world.
To meet the customer experience challenge and to deliver smarter personalisation, business models must change. Operating models must change. If it looks as if my message in this article is that everything must change then I think it probably is. Where does such a tall order start to get answered? I would suggest it is in the network; more agile, more flexible, more capable of supporting what your customers want and what you must deliver.
Underpinning this change – fundamental to it in fact – is a flexible and agile infrastructure. NFV is the first step on the road to this agility – so if you’re not already deploying NFV, you really should be. Otherwise you risk the market passing you by.
Knowledge Network Articles enable our partners to create high value content to express a particular view or highlight an opinion in an editorial style environment on Total Telecom, they are not produced by our editors and do not reflect the views of Total Telecom. To find out about content creation opportunities for your organisation visit the information page or email