If you’ve been reading this blog, you know that we’re all about the customer experience, and helping organizations use their data to create personalized experiences that increase loyalty and reduce attrition.
We find the telecommunications industry as one of the prime markets poised to excel in customer experience because of its abundance of customer data. We have customers in this area that are already benefitting, but recent research from Ovum sparked an important reminder of the impact data and analytics have on delivering world-class customer experiences.
Ovum’s research takes a look at how telcos need to use big data analytics to personalize the customer experience to reduce customer churn and improve loyalty. The findings are eye-opening:
- On average, it takes at least 3.5 years for telcos to break even on subscriber acquisition costs (SACs)
- The average customer lifetime for telcos is currently only 2 years
- Telcos are seeing customers churn at rates as disparate as 1.5% to nearly 6% per quarter
- While more than 70% of telcos that have invested in big data have planned to apply big data analytics across the business, less than 20% of these telcos have been able to fully deploy analytics to support customer-focused initiatives
Despite these findings, Ovum analyst, Chantel Cary, notes that “Telcos recognize the importance of customer retention and understand that big data analytics will help to differentiate the customer experience; many, however, have hesitated to launch big data analytics initiatives that will drive personalized offers and encourage the cross-sell of products that will lead to greater loyalty.”
These findings, coupled with Chantel’s comments, are difficult to digest. Think about it: telcos have so many customers who generate plenty of (operational) data, and have a continuous need to keep customers happy so as to not lose them. And considering telcos’ measure of success is all about the customer—satisfaction, profitability, retention, advocacy, promoter scores—understanding customers and the elements that go into their decision-making is a direct correlation to increasing loyalty and revenue.
If your customers don’t develop a profound personal preference for your company brand and the content it delivers to them, you’ll struggle to grow the business. That’s why telcos need to understand their customers on a deeper, more personal level. They need to understand the ‘DNA’ of each customer. In particular, they must understand the elements that go into customer decision-making, because it increases loyalty—the gateway to revenue.
At NGDATA, our telecom customers leverage their data to target customers at the individual, DNA level to learn about their usage, network, context-based interactions and product preferences in order to deliver the services customers want and improve the overall success of their marketing campaigns.
For the telco industry to effectively stop the cycle of churn, it is critical that they really get to know their customers at this individual level. By looking deeper at customer data, telcos can gain more specific insights, including what makes a valuable customer recommend their service to a friend, what will make them leave, and what other services they can engage the customer in to ensure their happiness, likely eliminating the chance they will make a decision to leave.
With big data technologies, telcos obtain the real-time history of their customers and can monitor their interactions (i.e. payments, mobile and online activity, device preferences, calls, service inquiries, etc.) to proactively reduce churn and uncover new investment opportunities.
If you can truly market to customers in a very precise way, because you understand them at the atomic level, you can certainly gain engagement and responsiveness – changing the consumer mindset. Now, that is powerful.
