Telcos and service providers everywhere are facing similar threats to their business. New entrants with new business models offer fierce pricing competition that erodes margins at traditional telco companies. These margin pressures cause two major problems—an increase in cost of the traditional customer experience and a decrease in the lifetime value of consumers ready to switch to new aggressively priced options.
Despite the challenges, network operators remain the largest revenue generators at the center of the tech industry’s value chain.
The nature of their business also means that they have retained direct relationships with broad customer bases, and extensive proprietary data sets on customer behavior, location, and purchase history. These incumbent advantages imply that telcos have an enormous opportunity to ‘fight back’ against industry trends, and most notably through building digitally-native customer journeys and experiences.
A 2017 study from the World Economic Forum and Accenture indicates that operators’ share of telecom industry profits have decreased from 58% in 2010 to an expected 40% in 2019.
The big winners have been content aggregators and distributors. This explains network-content consolidation plays like Comcast’s takeover of NBC Universal, Verizon’s acquisitive spree of AOL and Yahoo!, and AT&T’s recently approved bid for Time Warner. It also explains the surging profits and market value of content aggregation businesses like Facebook (Newsfeed), Amazon (Prime Video), Apple (iTunes), Netflix, and Google (YouTube).
At the same time, as industry profit share has flowed away from operators and towards content aggregation and distribution businesses, the most dominant of those same content players (i.e. the ones that managed to avoid being swallowed up by their network partners) have moved to aggressively integrate backwards up the value chain.
Is it too late to fight back? Research from 2016 indicated that the majority of consumers were ready to switch their mobile network to one of their favorite tech companies if available, and that the proportion skews higher as you increase customer segment value. Whether it be Facebook’s Whatsapp, Google’s Hangouts, Microsoft’s Skype, or Apple’s Facetime, tech giants that have come to be trusted by consumers with delivering innovative, convenient digital experiences are eating up OTT voice and data services and commoditizing the networks which power them from below.
The convenience and cost of digital experiences has translated into a tight correlation between the prevalence and usage of digital channels, and higher levels of customer satisfaction, loyalty, and lifetime value. This relationship has been observed across industries from financial services (e.g. PayPal vs. wire transfer) to travel (e.g. Priceline vs. travel agent).
Telecom is no exception. 2016 studies by Cap Gemini and McKinsey & Co. both showed strong correlations between the proportion of customers that use digital channels for service and support and customer NPS. In an era increasingly defined by digital accessibility, it is simply cheaper, faster, and more convenient for consumers to transact and interact over digital.
The mobile experience is central to a cheaper, faster, and more convenient customer journey, and will play a critical role in redefining what it takes to open a new account, upgrade your data plan, or pay your phone bill.
Many of Localytics’ customers have two, five, or even 10 or more mobile apps, web sites, and social channels (in addition to a real-life experience, such as a brick and mortar location) across which they hope to reach the right customer, at the right time, with the right offer to inspire purchases, loyalty, or engagement. That’s where business happens.
One way to map out a new CX experience is to use a Digital Customer Journey Map.
Here's an example:
This diagram can help your team visualize the path customers might experience through each of the digital touchpoints. Once built, this map will highlight the handoffs, coordination, and overall journey through apps, channels, and milestones which can be personalized to increase customer engagement..
From this initial map, the design of Personalized Interactions (Push, In-App, Inbox, Email) delivered in a full calendar year become the trail maps to your customer’s digital journey.
What offers or content will be of most interest to them based on the path they have taken through your digital landscape?
What communication can your company provide in guiding customers to paths of increasing value, deeper engagement, or friction-less customer service?
Should that communication reach them when they reach a certain day of use, or triggered by an in-app behavior, or in response to an external event in your stores or geographic locations?
The timing and content of your mapped activities will be more impactful if you can increasingly personalize them. (Read our eBook for a more complete explanation of Localytics’ Stages of Personalization and how it is applied to each of the steps in your customer’s digital journey.)
Regardless of your organization’s readiness to meet every opportunity with the right message or offer, this digital engagement journey map creates prototyping and validation opportunities with your marketing team. If you’re ever lacking clarity on ultimate customer value proposition, this is a great way to get back in alignment.
In the U.S. market, Verizon can leverage real-time account balance and usage data from CRM and billing systems to trigger mobile notifications which offer up personalized recommendations based on historical consumption. In one example, a push notification can be used to alert subscribers who have exceeded their monthly data plan allowances and offer them alternatives that may better suit their historical usage patterns.
Rogers Communications, the largest telecommunications firm in Canada, has gone a step further. By using similar data on current and historical consumption patterns to forecast individual users’ likelihood to exceed their plan, Rogers can preemptively warn their customers that they are approaching their plan’s limit. By delivering a utility first with customer value in mind, Rogers can create a welcome touchpoint in their mobile customer journey which ultimately drives to higher rates of subscriber retention and sales.
Back in the U.S. market, Comcast, has been recognized by Accenture and the World Economic Forum for the innovative work they’ve done to capture customer data to deliver better services across their Xfinity X1 platform. Customer-level data captured across mobile, desktop, tablet, and OTT devices percolate throughout Xfinity customer communications to personalize and improve it’s offering. This drives higher levels of customer engagement, which ultimately increases the average subscriber’s lifetime value and volume of ad inventory that Comcast can monetize across its portfolio of media properties.
In Asia, mobile network operators like Telenor’s Malaysian subsidiary Digi can create new lifestyle brands by investing in their loyalty rewards programs. By providing unique location-based services and rewards as in the below example, Digi can make a strategic move to own the customer relationship on mobile, and build their position as an intermediary between the customer and loyalty program partners.
As a predominantly pre-paid mobile business, Digi can also leverage their mobile app to game-ify the new customer onboarding experience, and incentivize account credit top-ups and self-service discovery while promoting their loyalty rewards program. The commercial impact of such efforts are to reduce the cost of customer service while simultaneously increasing retention and customer satisfaction.
These examples are representative of the ways in which the world’s largest operators are just beginning to reimagine the customer journey in digital terms. Looking forward, it’s becoming clear that we are moving towards a world where the services delivered by branches and call centers today are predominantly digital, and the integration of customer data across every touchpoint unlocks higher levels of relevancy and convenience.
Get in touch to see how Localytics can help you reimagine your digital CX and better personalize your engagement with your customers.