Catch the Right Customers

How to identify, attract and keep the customers which will drive your telecom business forwards

Challenging Times

Even with modern customer experience management solutions, telecoms find it challenging to design, deliver and assure the optimum experience for each end-user. A “one-size fits all” approach to customer experience delivery is inefficient at best and often harmful. So which users should your business focus on, what do they need and expect from you, and how do you deliver it?

In this article we share some consumer research recently conducted by Huawei’s Customer Experience Transformation Center (CETC) which answers these questions for the general case. The answers are quite revealing, with some customer segments much more desirable than others, and each group having distinct priorities.

Key customer segments

Analysis of over 3000 survey respondents, sampled across mature mobile markets, has revealed 6 distinct customer groups, differentiated by their main motivation for owning a mobile device:- 

Business Focused: Device used primarily for business purposes. Seeks reliable network quality, particularly for voice, together with a high level of customer care.

Value Chaser: Driven by price. Spending money begrudgingly, this user seeks first-class service, but at an economy price.

Family Focused: Device mainly used for maintaining contact with family members. Seeks reliable coverage, particularly in the home.

Entertainer: Uses device for watching videos and playing games. Seeks high speed data, and is an early adopter of new services. Youthful, with limited disposable income.

Socializer: Device primarily used to access social networking sites. Seeks reliable data and application performance.

Heavy User. Consumes large volumes of data for video and applications. Seeks high data speeds and large data bundles.

Whom to target?

Your business strategy may already include the targeting of particular customer segments based upon your own unique competitive environment and specific business goals, but are these really the right customers for you? Let’s take a look at the most desirable customer segments in general.

The chart in figure 1 provides some guidance on this. Each of the customer segments are compared by customer lifetime value (CLV) and their net promoter score (NPS) for network service – in effect it shows their value to you in terms of direct revenue together with their likelihood to recommend your network service to others. The size of the circle represents the relative size of each segment, while the CLV is normalized to UK spending levels.

Although NPS is generally low, as is typical in the telecom space, it is clear that some customer segments are more likely to recommend their service provider than others. There is also a significant difference in CLV between customer segments. Using these criteria, the upper right area of the chart is the sweet spot. Socializers for example, offer a high CLV as a result of high ARPU combined with a lower propensity to churn, and they also have a relatively high NPS. In contrast, value chasers offer a much lower CLV, and are less likely to recommend you to others. 

In addition to socializers, another potentially valuable customer segment is the business focused group, who although demanding, do have considerable CLV. The large group of heavy users is also attractive, being most likely to recommend your network service, and with a relatively high CLV.

Attracting the most valuable

Building on our example above, the most important factors which would attract the heavy user, socializer and business focused customer segments to switch to your business are shown in figure 2. 

Interestingly, none of the most valuable customer segments cite price as the most important factor. The typical heavy user prioritizes higher data speed; you can attract them by offering and promoting high levels of data speed. The Huawei SmartCare CEM solution can support you by monitoring the data speeds being delivered to similar existing users across your network, identifying any faults and areas for improvement, while also generating quantitative data to support associated marketing campaigns.  

Typically, the socializer and business focus customer segments prioritize coverage. More detail on this is provided in figure 3, which shows that both groups prioritize coverage in public areas. Socializers also value home coverage, while the business focused segment tends to place equal emphasis on coverage at home and in business districts.

To attract these customer segments, provide great coverage in these key areas and emphasize this advantage in your marketing campaigns. Again, the Huawei SmartCare CEM solution can monitor the coverage levels experienced by users in these areas, and can identify and prioritize any locations requiring improvement.

How to keep them

After attracting valuable customers, you’ll want to keep them. Figure 4 shows the main reasons people from the three valuable customer segments have changed service provider during the past two years.

Surprisingly, in these days of increased data usage and price competition, it is still poor voice quality and poor customer service that are the most cited reasons for churn. Huawei’s SmartCare CEM solution can really make an impact here. Firstly, the sophisticated voice quality monitoring capability available with the SmartCare solution allows previously hidden voice quality problems to be readily detected and isolated, enabling you to assure the voice quality delivered to your customers. Secondly, SmartCare can transform your customer care processes, leading to much shorter problem resolution times, higher first call resolution rates, and proactive care which can address problems before they have a major customer impact.

Your case, like every case, is unique.

The case listed above is just an example; our experts at CETC can partner with you to apply the same analysis to your own market, identifying those customer segments key to the success of your business. The SmartCare CEM solution can then help you attract and retain these essential customers, delivering real business value.

Huawei will showcase its comprehensive technology capabilities and innovations at Mobile World Congress 2015 in Barcelona, Spain. For more information, please visit: http://www.huawei.com/minisite/mwc2015/preview/en/index.html