Building an Effective Total Customer Experience Model for Telecom Operators
Is your company delivering an effective total customer experience across multiple touch-points and channels? Most companies aren't. They are using conventional approaches that drive departmental or functional silos in delivering inconsistent and disintegrated experiences; demand more and more resources in order to stay in line with competition; and deviate away from achieving designated business targets.
How do companies deliver a consistent and integrated total customer experience, which aligns with corporate objectives, and with the best use of limited resource? One new and unconventional way is to start building a TCE (total customer experience) model by mapping touch-points and associated channels across entire customer lifecycle, assessing the current effectiveness of touch-points' experience, and optimizing resources allocation among touch-points and channels by target objectives.
In this article, I am going to demonstrate the beauties of building, assessing, and optimizing a TCE model, with the data and insights generated from the global mobile communications customer experience research1 co-organized by CustomerThink and G-CEM.
Telecommunications service is big business. So big that almost every marketer is jealous of the scale, scope, budget and size of the business that telecom operators handle year after year. The recurring revenue seems to be a lucrative model to keep cash flowing in, too. However, if you are a telecom operator, you see the story differently. You see a rapid erosion of your core business, caused by commoditization of products and services, fierce price wars, continued investment to keep pace with new technologies and even the emergence of virtual operators.
Common Challenges of Telecom Operators
Telecom operators in different countries and markets face different challenges and threats. Nevertheless, the challenges below may be the most common pressing concerns for telecom operators nowadays.
Telecom operators may try very hard to earn extraordinary Average Revenue Per User Per Year (ARPU) from high-value customers, to drive ARPU from low-value customers, and to drive up Value Added Services (VAS) revenue and margins. Despite the fact that they have spent tremendous resources to implement their winning strategies, ARPU is still decreasing.
Telecom operators may have the most innovative loyalty and retention programs, highly competitive prices, structures and plans, and deliver best-in-class services to their customers. Although they get pretty high satisfaction scores, churn rate is still increasing.
Telecom operators may have the largest market share in their own region, but that makes them particularly vulnerable to low-cost operators. Both customers and employees feel no differences between their brands and their competitors' brands. They struggle to build their brands but just don't know what to do or how to do. Their brands are big but empty.
Telecom operators are adding more and more product and service offerings for their customers; and these customers are experiencing and perceiving them through new and emerging touch-points and channels, especially through social media. Managing such a dynamic and complex mix of channels is a nightmare. It creates inconsistent customer experiences across channels.
Limitations of Conventional Approaches
Without an integrated approach, you are always working independently as departmental or functional silos and delivering inconsistent experiences. Without a quantifiable approach, you are not able to measure, and thus can hardly manage or improve the effectiveness of the customer experience. Without a pragmatic approach, you may build an extremely detailed customer experience process model, good-looking on surface, but taking you nowhere in execution.
How do you manage these challenges? You need the following: a management system that provides you quantifiable metrics to measure results; a scientific approach that clearly explains the relationship between satisfaction, buying behavior and referrals or word-of-mouth; sound and solid management principles to correlate customer experience and your brand strategy; and a systematic framework and methodology to design and monitor effective customer experience delivery across multiple channels and touch-points throughout the entire customer lifecycle.
In short, you need to manage using a TCE (total customer experience) approach.
Build a Quantifiable Total Customer Experience Model
Figure 1 shows a simplified version of the total customer experience model for a mobile network operator. Mobile communications customers experience their entire lifecycle with mobile network providers by interacting across numerous touch-points (denote T1 to T30) at different stages (i.e. Image, Activation, Usage, VAS, Pay, and Service). The respective touch-point experiences are delivered not by single entity, but by various channels (denoted by C1 to C27), under various functions or departments (F2F, Call, Online, DM, Media, Marketing, and Administration, etc.)
There is no single department or function that can claim total ownership of the entire customer experience. With a TCE (total customer experience) model, companies are able to visualize how to deliver and manage an integrated and consistent experience for customers across the matrix of multiple touch-points and channels.
Customers experience you and your brand as a whole, not by different departments or functions.
Assess the Importance Levels of Touch-Points and Channels
The importance levels of each touch-point / channel in driving customer retention and customer referrals are identified. The orange stars denote the touch-points that are important to retention and referrals; blue dots are important to retention only; green dots are important to referrals only; and the grey dots are unimportant to both retention and referrals.
Not all customers are created equal. Treating all your customers equally implies that you are not optimizing the resources you allocate among customers. Similarly, not all touch-points and channels are equally important. Some are more important in driving satisfaction, some are important in reflecting brand differentiation, some are important in driving customer retention or referrals. Some may not be important at all.
As shown in Figure 1, the importance of each touch-point/channel will guide telecom operators to allocate resources differently, and effectively, in optimizing customer satisfaction, brand differentiation, and loyalty.
Not all touch-points / channels are equally important, so allocate resources differently.
Optimize Total Customer Experience by Target Objectives
Different companies have different strategies and priorities, even in a highly competitive and "me-too" industry like Telecom. It is not a wise move to copy your competitors, even if they are considered "best practice" in your industry with similar corporate objectives—their target touch-points may be different from yours.
For example, the Service experience (i.e. touch-points denoted by T25, T28, T29, and T30) delivered by IVR (C8) of the Call channel, the touch-point experience General inquiry (T25), Reporting loss (T29), and Complaint handling (T30) delivered by IVR are unimportant to retention and referrals; the touch-point experience Extra service subscription (T28) delivered by IVR is important to retention and referrals. Only by focusing here, can a mobile network operator manage and optimize the total customer experience by target objectives, in this case, driving retention and referrals.
Telecom operators have been talking a lot about delivering a consistent and branded experience to their target customers, at multiple touch-points and channels, across the entire customer lifecycle. But until they can manage the Total Customer Experience (TCE) with an integrated and quantifiable mechanism, delivering a consistent and branded experience will be lip service rather than real action.
1. The global mobile communications customer experience research was co-organized by Global CEM and CustomerThink. The survey began on March 4, 2009 and ended on May 6, 2009. A total of 2,361 valid responses from 25 countries were collected. The guiding principles and the tools for design, execution and analysis of this research are based on the U.S. patent-pending Branded Customer Experience Management Method invented by Global CEM.
In this article, we use China Unicom as an example. China Unicom is the second largest mobile network operator in Mainland China, with 137 million subscribers by March 31, 2009.