HomeMobile EuropeOn the personal path to profit

    On the personal path to profit


    It’s been a while since we had a guest blog on Mobile Europe. Here’s one that looks at personalisation — a topic that gets paid a lot of attention but often in quite a cursory way. Often there is little in the way of detail, and the idea of delivering personalised customer offers remains just that – an idea. So, how can operators actually deliver personalised service to customers? What are the steps they can take to understand their customers better, and then to act on that? And if they achieve all that, do they then see actual profit for their efforts?

    Here, Igor Sarenac, VP, Worldwide Communications, Convergys, (pictured) outlines why he thinks personalisation is key to customer profitability:

    Mobile operators must give their customers reasons to voluntarily advocate them, rather than reasons to churn. Operators will begin to achieve these high levels of advocacy when they are able to demonstrate to their customers that they truly understand them. An organisation that can proactively use existing data to deliver a tailored, personalised service to individual customers will succeed in delivering increased revenues through longer-term loyalty.

    The secret is in the segmentation
    Operators can generate a deeper understanding of their customers by better analysing data to create more effective segment-based strategies. Traditionally operators have collected information like customer feedback, operational data (e.g. call resolution times, self-care usage etc.), and customer profile data (payment histories, product history, profitability etc.).  While many operators are skilled at analysing such information in silos, it is imperative they interconnect the data within these three domains (customer feedback, operational data, and customer profile data) and analyse the combined picture. This includes gathering customer feedback on new service creation, how they are delivered, how they are perceived and ultimately, how they are received.

    By combining customer data specific to previous feedback, product usage and ongoing service contacts, mobile operators can group together its most loyal and profitable customers. Such segmentation practices enable operators to build an advocacy and profit profile for each of these highly-valued individuals and target personalised offers to them accordingly. These offers could include device upgrade offers, free concert tickets, free app downloads etc. Mobile operators are increasingly adopting technology that can cost effectively deliver these capabilities to drive more granular segmentation and drive a greater return on customer relationship investments.

    Consolidated, comprehensive and consistent
    To maximise the benefits of effective segmentation, it is vital that mobile operators consolidate multiple systems and data sources. Live customer agents representing operators can optimise call resolution times and keep care metrics at an acceptable level, if they have instant access to a consolidated view of the customer. This should contain the number of recent interactions the customer has had with the company (and the channel selected), a view of the customer’s product adoption, billing history, offer history (acceptance /rejection rates) and overall sentiment towards the organisation. Agents must be aware, as a minimum, what other channels a customer may have used and why they might have proved unsuccessful in resolving the issue.

    Operators should also consider a customer’s social media prowess as part of the segmentation process. This proactively limits bad experiences being shared with thousands of Twitter followers or Facebook friends. When you consider that the average person has 130 friends on Facebook, it is easy to understand how issues can quickly escalate.

    This comprehensive customer view ensures that all new offers, designed to increase customer advocacy, are appropriately targeted and more likely to be accepted. For example, a customer calling to complain about service quality on a particular line is unlikely to welcome an offer of additional airtime credits. It is important that operators, through their network of agents, are able to properly anticipate the moods of their customers.

    From retail to retention – consistency throughout the lifecycle
    Modern point of sale systems now have the potential to provide this same holistic customer profiling functionality. Compelling offers can be prioritised at point of sale according to the customer’s profile and subsequent likelihood of acceptance. This can also be supported by relevant scripting information to enable the sales/support agent to lead a quality customer interaction.

    Creating a clear and consistent view of a long-standing existing customer is relatively straight forward. Effectively segmenting new customers is more challenging and usually starts with a considered estimation of their usage behaviour. It is then important for operators to constantly re-evaluate each customer’s usage patterns and align them to their latest product offerings and options. While this constant analysis may impact recurring revenue, it has a profound impact on longer-term customer loyalty by demonstrating a deep understanding of customer needs.

    What’s personalisation worth?
    Mobile operators will often do anything it takes to prevent customers churning. This has led to some operators giving away free credit or heavily subsidised handset upgrades to low-value customers in return for long-term loyalty.  The reality is that the value of this long-term loyalty rarely exceeds the cost of these incentives.

    By working with a large U.S. operator, Convergys managed to reduce the budget for poorly allocated handset subsidies by 20%, resulting in hard savings of millions of dollars. At the same time, the operator also managed to target handset upgrades effectively and retain its high value clients on longer-term contracts. This led to a variety of additional cross-sell opportunities and new sources of revenue.

    The same techniques have also delivered powerful results for operators based in emerging markets – especially those with a large number of prepaid users. By closely focusing on segmentation and personalisation, these operators have seen sales and retention increase amongst their so called “pay as you go” users, who are far more impulsive in terms of their propensity to churn.

    Operators have a vast range of information at their disposal that enables them to generate a close understanding of their most valued customers. By combining a range of data from multiple systems, these organisations can arm themselves with the relevant knowledge to deliver a tailored and personalised service to these customers. Such techniques are proven to drive customer advocacy and long-term loyalty, which combine to increase revenue and safeguard profitability.