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The customer experience wave has disrupted several industries and Telecom is one of them. Today, customers aren’t just leaving some of the biggest telecom brands in the world (Comcast ring a bell?) but are making it a point to tell their friends and social connections about their frustrating experiences.
Given what’s happening in the market, it is crucial for telecom brands to not go out all guns blazing and pump millions of cash into advertising and marketing to attract new customers. If anything, it will lead to a complete burn out of resources.
Customer retention is a more pragmatic solution to tackle customer churn. Telecom companies cannot stray away from investing time, money and effort to keep customers delighted. Well, there are reasons for it.
In most industries, acquiring a new customer means you’re likely to spend anywhere between 10 to 25 times more than what you would in retaining a customer. It gets even better. As per the research done by Frederick Reichheld of Bain & Company, increasing customer retention rates by just 5% can increase profits by 25% to 95%.
“Good customers are an asset which, when managed and served, will return a handsome lifetime income stream for the company” – Philip Kotler.
But you might ask why is there a sudden shift of focus on customer retention? It hasn’t been talked about so much before in the telecom segment, let alone embrace it as something highly essential to stay in this business today.
Many telecom companies find themselves in a muddle because of the fact that the market has grown at a blistering pace. For instance, leading cable MSOs (Multiple Service Operators) have entered the wireless field to further saturate an overgrown market and make competition even more stiff. Traditional telecom brands are having to move out of their comfort zone and invest in technologies and processes they aren’t familiar with. Also, they don’t have the right tools to understand customers and resolve their queries. The result? Customers leave and no amount of acquisition strategies is bringing them back!
Also, by looking at the market penetration values in saturated markets, it can be inferred that there is no space for new customers! If you take the United States alone, there are 103 connections for 100 citizens. Telecom companies, therefore, need to strategize wisely. Instead of looking outside for new revenue, they need to identify ways to retain existing customers – easier said than done though!
Telecom brands in Canada are already at it. In 2016, Canada’s two telecom giants, Bell Canada and Telus, spent more money to stop subscribers from leaving them compared to the previous year. Bell Canada and Telus reported increased wireless retention spending for both the full year and fourth quarter of 2016, according to their annual report. Also, both these companies posted an average acquisition cost of $521 compared to retention costs per subscribers of $11.04 and $11.74 respectively.
While telecom companies need to keep hold of their customers, doing it effectively and witnessing the results require an effective end-to-end strategy.
1. Listen to what your customers are saying
Staying in sync with what your customers expect from you is the foundation to an effective customer retention strategy. And to stay in sync, you need to listen to customers across multiple touchpoints. You need to be available for them, at their convenience so that you can record their feedback, specific queries and complaints at any particular time.
2. Don’t just be open to feedback. Action it!
Most churn doesn’t happen overnight. It’s mostly the end outcome of an accumulation of events where the customer feels unhappy with your services. Which is why you need to attend to it at the very beginning and not let the dissatisfaction grow. This translates to acting on customer feedback on time, appeasing disgruntled customers and closing the loop effectively.
3. Anticipate customer churn and behavioral patterns
Recent advancements in technology might have made the playing field level but it has also paved way for telecom brands to be a lot more proactive. Invest in powerful analytics and insight tools to anticipate customer churn, predict customer behavior and devise strategies that boost retention as well as profitability. Map customer retention strategies costs with the expected ROI to effectively prioritize investments.
Telecom companies have to realign their priorities around customer retention. Given the wide range of services they offer – some of which are exclusive of one another – it is important that they deliver consistently delightful experiences and ensure that they build a journey for the customer that is seamless and cohesive. Right now, there’s just too much chaos and obscurity for the customer (imagine the number of times they’re having to repeat the same issue to multiple call center representatives or give feedback only for it to be left untouched by the company). Telecoms have been looking for too long on the outside to solve the customer churn epidemic. The antidote, however, lies within. There can’t be a more effective cure than investing in your own customers!