Operators’ brands are slipping from view as web companies and over-the-top providers cement themselves in users’ consciences. However, operators have many of the attributes needed to move from today’s transactional relationships to truly personalised interactions that create customer advocacy and ultimately profit. Sponsored by Oracle
Gordon Rawling, Oracle Communications: Operators have been
trying to solve legitimate problems but haven’t tried to address
the problems customers are experiencing in a holistic way
Operators across the world are moving towards delivering personalised customer experiences. The thinking behind this is to reconnect their brands with their users, deliver services tailored to individual needs rather than segmented for groups of users and ultimately to deliver experiences that have improved to the extent that users become advocates of their brands.
The benefits of turning customers into advocates are obvious. A customer who purchases $10,000 of services but influences nobody else to purchase services has a lifetime value of $10,000, while a customer who purchases $1,000 of services but influences $100,000 worth of purchases by other users has a lifetime value of $101,000.
Operators today keep this data — if they even have systems in place that track it — in disparate, disjointed silos and therefore are challenged in understanding true customer lifetime value.
For example, for the customer who spends $10,000, it may cost $5,000 to set them up, $1,500 to acquire them as a customer and $3,950 in customer support costs. The apparently high value customer actually results in a $450 loss. However, the lower headline value customer who spends $1,000 may incur set up costs of only $40, acquisition cost of $80 and support costs of $150, resulting in a profit of $730 for the operator.
Customer-centric brand experience — from transactional interactions to customer advocacy
Operators have been moving along a developmental path that is seeing them transform from the traditional telecoms industry approach of selling a service bundle to a near anonymous customer. They have tried to create loyalty for frequent customers but initiatives have had only limited success — as Rajeev Tankha, senior director of solution marketing at Oracle Communications, explains: “They have failed in this for many reasons,” he says. “Their loyalty rewards have been unappealing and mostly oriented around trying to sell more to the customer. For example, what money do you have to spend before you have enough air miles for a free ticket?
“A lot of operator businesses are all trying to achieve personalisation and ultimately advocacy,” he adds. “But personalisation is not about making you buy more, it’s about making you an advocate. The challenge for operators is how to turn their customers into advocates from where they are today. People walk into Apple stores in their own free time, not to buy products, but because they like it. Who goes to their operator’s retail store just because they like it?”
That requires a giant shift in mindset for many operators who have run their customer relationships on purely transactional bases. To move along the path in the figure, Oracle advises a three stage approach. The first step is to unify the experience and demonstrate clear understanding of the customer and their behaviour. Then the operator can move to personalise their customers’ journey by providing a consistent, personalised, engaging customer experience. Finally, and this point is more recognisable to traditional operators, they can optimise the execution thereby improved services to customers at lower cost.
Complex operating environments
The challenge for operators isn’t just in the customer facing areas of their operations. The fragmented nature of their operating environments means that even if they have the latest CRM front ends that integrate with the multiple customer care channels to provide a consistent user experience, the back office continues to be constructed in silos and the data from each disparate system isn’t necessarily exposed to the touchpoint a user selects.
Typically, operators’ architectures are composed of multiple CRM and billing systems along with a confusing web of other systems that comprise policy management, fulfilment and provisioning, business intelligence, networks and other IT applications.
Add to that the multiple sales and customer contact channels, the many OSS stacks per technology, the legacy of largely customised integration and the duplication of applications or siloes caused by regulation, mergers and acquisitions and the history of the operator involved and scale of the challenge rapidly starts to spiral out of control.
Yet, integrating those to provide near real-time customer profiling is essential if operators are to get to the goal of customer advocacy.
Gordon Rawling, director of EMEA marketing at Oracle Communications, expands on the challenge: “Operators have been trying to solve legitimate problems but haven’t tried to address the problems customers are experiencing in a holistic way,” he says. “It is arguable that if they take a step by step, piecemeal approach they won’t get where they want to in time.”
Operators that take a step by step approach are leaving themselves open to recreating the mistakes of the past in their new architectures. The list of negative attributes such fragmentation creates limits operators to their current generic offer creation, impersonal and unfocused interactions and rigid business models that make it expensive to serve and support customers.
Rawling emphasises that cost, while always important, shouldn’t be the only consideration on the journey to encouraging advocacy. “It you want to get to advocacy, it’s not just about reducing cost,” he says. “It’s not just about upgrading your web portal either, it’s about unifying the experience, personalising the customer’s journey and optimising your execution — in addition to the areas in between them — as opposed to just addressing the individual issues in isolation. All of those piece parts made sense individually but they were deployed for a different world and now we need to produce something fit for purpose. The purpose being that for personalisation the operator needs to understand who each customer is, who their peers are and who they influence.”
Reducing the gaps in current processes will help operators to strengthen their transformation strategy. Oracle Communications has identified a series of process gaps that need to be closed. Today, product launch can take anything from three months to an entire year with the roadmap prepared the year before.
Order fulfilment remains only partially automated in postpaid and corporate environments. For example, 10% of orders are implemented manually in postpaid and 95 % in the business segment. Customer experience is poor in operator shops and online with limited self service capability and transactions in shops take between 30 and 45 minutes to complete and involve around 10 systems.
Further to those challenges, customer information is handed at least three times in a retention transaction and customer data can be scattered across three databases in retail and across five databases in corporate. This is compounded by limited prospect management and channels harmonisation.
Oracle’s customer centric brand experience solution has been developed to enable operators to maximise customer value through unified customer lifecycle management, personalised interactions and to deliver extreme business flexibility to meet ever-changing demands. It encompasses the three key capabilities Rawling describes above: unifying the experience, personalising the journey and optimising the execution. The solution addresses three key metrics: customer lifetime value, customer acquisition and retention and the cost to serve the customer.
Only by enabling operators to collect, hold and make use of complete and trusted customer information will they be able to make customised offers — although the advocacy environment isn’t about interactions that are exclusively sales-oriented — along with personalised and focused interactions.
It will take time both to get the systems deployed and for the shift in operator attitudes to take place but the ultimate goal of moving customers along the development curve to becoming advocates will see operator brands again become significant and deliver operators with the potential to compete in brand value with the current leaders in the digital value chain.
Operators will be able to deliver sustainable differentiation by taking their strong network foundation and the superior customer insight that resides within their systems and using that to deliver truly personalised experiences for their customers.
Unifying the experience, personalising the journey and optimising the experience on top of that network foundation will be the keys to unlocking the benefits of customer advocacy. It will be a virtuous circle in which they will be able to add to the reservoir of insight that they hold continuously as their networks and services are utilised and the value and differentiation they can provide using will increase commensurately. GTB