Thursday, 24 December 2015

Dichotomy of the modern ‘telco’ Part V – customer engagement & churn and conclusions



Telcos could take a leaf off the digital industry in the way they interact with their customers.  It could help them reduce churn.  Telcos mostly stop interacting after acquiring a customer while the digital industry sees that as the starting point.  This article postulates.  The previous article suggests how telcos can adapt to the digital economy.  The challenges faced by telcos in the digital era are raised in the first.

Customer engagement is an ongoing activity with digital firms.  Part customer service, part sales and post-sales, part post-support it is also used to retain customers.  Social media, email and messaging are some tools used but for better control over the long-term, try building your own community platform, the focus of this post.

Whichever channels are used, there are some rules to follow.

To engage successfully, one must be respectful of the participants. It’s no more just about customer adds.  What unites all successful efforts is a deep commitment to the community; of customers, consumers and would-be customers.  The process should be open and transparent.  Don’t treat them merely as a revenue source. Recently my mobile provider put me on a data plan I didn’t ask for and even before the next bill after I cancelled it, they texted saying I’m back on that plan!  Another time and it’s sayorana.

Continual engagement is a must if you are going to get anything useful.  Be responsive and make information available, the starting point to anchor interaction. Use social.  Some hold workshops and conferences.  And unlike the traditional customer service, manage the process actively, like a branding exercise.  The best ones have a thriving community.  You struck the jackpot if it becomes self organising.

“Telstra crowdsources customer service, so that users support each other to resolve problems without charge” – McKinsey, May 2014.

Once achieved, you have a powerful device.  Besides managing churn, it can be tapped (yes, it’s okay to do this) for feedback, for ideas, to test ideas, grow your customers and like Telstra, use it for customer support.  Or like BMW, to develop a closer relationship to those closer to the ground.  Internal brainstorming can never match this way of injecting customer ideas.

BMW hosted a ‘virtual innovation agency’ on its website where small and medium sized businesses can submit ideas in hopes of establishing an ongoing relationship.  The platform serves as an input device; tapping fresh ideas, suggestions, having a dialog.

How do you begin engagement through a community platform?

Open platform

Build an online open platform and note that one opened to all is more effective than limiting it to customers, obviously with exceptions.  It can be as simple as an extension to your website all the way to a spun-off site like Quirky that General Electric uses to tap innovation.  Many include tools and application programming interfaces, allowing other sites to connect digitally.  This grows the community.  The objective is to build and engage a community around your brand, product or company by deliberately tapping into crowds of customers, consumers, partners, suppliers, external experts and enthusiasts.

Open platforms can be used in different ways.  If it is mostly for listening, say, for opinions and ideas to improve a product, consider this.  For directed activities, say, what features a product could have, try this.

Once an engagement mechanism is successfully put in place, the telco can use it to track customers’ digital lifestyles, test willingness to pay for a type of service, simultaneously test variations before launching a new service (A/B testing).  You now also have a test bed for your lean-based service development or simply use it to manage churn.  The potential depends only on the creativity (and the culturally-adapted] of the executives.

With that, let’s conclude this series.

In the digital industry the customer is king, then content

Bearing in mind that the current generation tend to be impatient, involved, DIY-infused and lives a digital lifestyle, the following from the digital industry may be useful.

·         User experience - move this to the top of the list, not an item in the bucket list as customer service.
·         Rapid provisioning of services - this may mean the older Operations Support Systems needs to be rejigged with speedier ones that support agile and minimum viable product.  And for similar reasons, deploy software defined networking.
·         Give customers more control with digitised self-service tools – provides for immediacy and don’t even think about user manuals or filling onerous forms for service variations.
·         Use blogs to build rich relationship with customers.  Take a look at Square’s blogs.
·         Crucially it’s all about building communities starting with an open platform.

Prioritise the big picture; the telco vs OTT mentality won’t help the bottom line

“Think without, less within”

Once it was only about phone calls, now it’s about broadband, the web, online services, apps and a global ecosystem that no single industry controls.  In this new order, telcos are part of the ecosystem, not the ecosystem.  In this new setting telcos that adjust better, play by its rules, culturally adapt, adopt an open mindset and grasps the mechanics must do better in the internet era that offers a larger opportunity. 
And in the content strategy, monetise data the way the digital industry does.  This is a sizeable source of revenue.

But is change even over in this internet tail?

Here’s something to ponder.  The rise of Uber and the sharing economy has forced the car industry to rethink their business model.  They are starting to accept that the concept of ownership of cars may become antiquated in 10 to 15 years.  BMW is taking a pioneering approach to the issue and thinking about its future being in helping people to get from A to B, rather than simply selling cars.  That’s redefinition!  Will the telco industry experience something similar?  There are developments today, some with venture funding, their partners the handset makers, some unwittingly by the telcos themselves that may similarly redefine the communications providers industry, perhaps now a better term to describe the industry rather than ‘telco’.  What’s driving this is an industry that’s still only quasi-open with a set culture.  Tech as we know leeches on industries with friction to disrupt and there remain serious customer issues with telcos.

Merry X'mas!


Comments appreciated. @tommichen7 is an industry veteran, entrepreneur and had since the dot.com days analysed digital business models.

©Thet Ngian Chen, internetbusinessmodelasia.blogspot.com (2012, 2013, 2014, 2015).  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Thet Ngian Chen and internetbusinessmodelasia.blogspot.com with appropriate and specific direction to the original content.