Will 2008 Be the Year of CEM for Telco Companies?

Churn is one of the single greatest problems facing the major Telco’s today. With outdated back end systems trying to keep up with regulation, competition, and an increasingly demanding consumer, many of these companies are seeking out new technologies to help them streamline and improve the customer experience.

Telecommunications companies have learned the hard way that if you ignore the customer experience, consumers take their business elsewhere, and it’s all too easy to do. Industry headlines are drawing attention to this issue in 2008: Blogs from desperate customers trying to get Verizon and other carriers to follow through on service requests appear regularly on the Internet; Sprint admitted that delivering poor customer experience to their customers led to the loss of more than 2 million of them.

Fortunately, solutions exist today that can help Telco companies churn-proof their businesses. Next-generation CEM solutions that employ predictive decisioning to foresee customer needs and enable agents to make relevant recommendations during a customer conversation have proven to decrease churn by providing a much more relevant, appropriate, and value-added customer experience. As an example, take the ability to negotiate a retention offer in real-time; this process is driven by corporate budgetary considerations as well as the needs and propensities of the customer. Such advanced retention capabilities have only recently become possible in a way that is practical for large Telco’s to execute in a call center or other real-time channel.

European Telco companies have already realized that product and price alone will not differentiate their brand. Because brand loyalty, retention and long-term profitability are now so closely aligned with the customer experience, many European telecommunications companies are implementing strategies for delivering a new level of service that not only meets, but exceeds, customer expectations during individual interactions.

Unfortunately for American Telco companies, there has been a growing disconnect between the customer’s experience of the brand through marketing and outbound communications and the experience when interacting with the company. While the brand is protected at all costs for advertising and outbound marketing efforts, inbound interactions are not as successful at enabling the customer to have a positive experience of the brand. Typically, the processes used for inbound communication are highly complex as they involve multiple products, channels, systems, and customer segments managed across often isolated channels. Rather than focusing on the customer’s needs and experience during an interaction, the agent is forced to focus on the often cumbersome administrative process involved in dealing with the customer’s request.

In 2008, with a recession looming over our heads, those Telco companies that act quickly to implement a comprehensive CEM strategy will have a strategic advantage that helps them achieve deeper, more profitable relationships and capture market share from less customer-focused competitors.

Rob Walker, Ph.D., vice president, Marketing (EMEA) and Decisioning Solutions, is responsible for managing the strategic direction and development of Chordiant Software's predictive decisioning technologies. He was previously with KiQ Ltd. and Capgemini. Walker holds a master's degree and a doctorate in computer science from Free University in the Netherlands.