Published on March 4, 2014
White Paper CSPs Must Deliver Superior Customer Experience Prepared by Ari Banerjee, Senior Analyst Sarah Wallace, Analyst Heavy Reading www.heavyreading.com in conjunction with www.comverse.com June 2013
Executive Summary In today's telco environment, data usage is accelerating, faster networks are rolling out and smart devices are becoming more ubiquitous. In parallel, customers have more choices: a choice of communications service provider (CSP), a choice of interaction method, a choice of over-the-top (OTT) services, etc. If that's not enough, customers' expectations have been raised – in part due to the "always on" Internet experience. CSPs, which wish to both retain customers and persuade them to be advocates, are well aware of increasing demands, but meeting those demands is easier said than done, as they grapple with disparate, siloed legacy systems that are not supporting the customer experience – and the business – well. When updating systems, CSPs will have to keep in mind consistency across all lines of business and customer channels, as well as find a way to make sense of the copious amounts of subscriber data coming from many sources. And while the network and service delivery in general remain important to the customer experience, focusing only on network metrics, such as quality of service (QoS), is not enough. Actionable analytics and intelligent policy management can be used to deliver an overall better customer experience. Other key elements include increased real-time handling, giving more control to the customer, and providing personalized and enriched services. On the back end, coordination and automation will help provide a seamless experience to the subscriber. CSPs have no choice but to be proactive in adopting new approaches so as to be able to provide an optimal customer experience. Otherwise, they risk losing subscribers or alienating potential promoters. On the upside, unlike OTT companies, CSPs have the opportunity to capture and understand many more of the events that can affect the customer experience in time to influence that experience for the best. Greater attention to customer experience is also an imperative if operators are to develop two-sided business models in which they deliver third-party services. CSPs should look to vendors that are experienced with multiple aspects of the customer experience – service delivery, care, marketing, billing and the like – to help them make the transition from disparate systems to a cohesive ecosystem with the customer at the center. HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 2
Key Dimensions of Customer Experience CSPs are looking for the next big thing to differentiate themselves from their competitors. When every operator has similar networks and services, they can only separate themselves from the pack by offering a superior customer experience. The company that manages to do so can be more efficient, more proactive and ultimately more innovative than its competitors. The concept of customer experience management can be broken down into four dimensions: anticipating, controlling, responding to and optimizing the customer experience. These management activities have different timescales associated with them, although there is a trend toward accelerating the ability to carry out these activities from days or weeks to near real time. Since communications services operate in real time, the impact on customer experience is more immediate than in many other industries. The CSP that best anticipates end-customer requirements, improves responsiveness and provides a more personalized level of service is intelligently managing its customer's experience and should reap the benefits in terms of lower operational costs, increased customer loyalty and higher profitability. Figure 1 is based on a recent Heavy Reading survey of 70 unique global operators that highlights the key activities CSPs believe are critical for providing a superior customer experience. Figure 1: Activities CSPs Believe Are Crucial to Deliver Superior Customer Experience Source: Heavy Reading HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 3
CSPs acknowledge that they need to understand their customers' individual experiences in a timely manner (82 percent) and on a continuous basis as they interact with their organizations both on- and off-net. A timely approach puts CSPs in the best position to manage all the moving parts that can affect the customer experience, including the network, services, subscriber devices and contact center interactions. The ability to capture and understand the events that can affect the customer experience in time to influence and optimize that experience is a major source of differentiation for CSPs. Respondents also view order fulfillment as important to customer service (81 percent), as an efficient order fallout management system ensures that order failures are detected and corrected early for prompt provisioning of customer service. The handling of Big Data is also viewed as important (80 percent), as CSPs realize that they must leverage all the data they have on a subscriber in order to provide optimal customer service. From the subscribers' point of view, subscribers want service availability and QoS, and they want to be able to conveniently manage their account through any channel. Subscribers also want CSPs to recognize them as an individual, so that the CSP can anticipate their unique needs, personalize their experience and fix their issues even before their service experience is impacted. Figure 2 looks at key customer experience aspects as perceived by subscribers along with their main characteristics that will help provide superior customer experience. Figure 2: Key Customer Experience Aspects From the Subscriber Point of View Source: Heavy Reading So in comparing the two points of view, CSPs seem to understand what their customers want; now it is just a matter of getting up to speed to meet these needs. CSPs must update their systems to meet the demands of customers, or they will lose them to more competent competition. HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 4
Experience Measurement Heavy Reading's research in the customer experience space points to a few gaping holes in CSP strategies. Most CSPs capture very network-centric and call center-specific KPIs that do not paint the full picture of the end-user experience. However, today leading operators are beginning to use Net Promoter Score (NPS) and other more holistic metrics to measure customer experience. Figure 3 shows the KPIs that CSPs believe are critical for them to measure customer experience. Figure 3: Customer Experience KPIs Source: Heavy Reading CSPs' customer experience strategy needs to be transformative and should be able to anticipate, contextualize and preempt customer complaints and queries and be able to effectively address subscribers' challenges. Though most of the customer experience metrics identified in Figure 3 are well understood, there are some emerging underlying trends that should be further discussed: Net Promoter Score (NPS): NPS has been gaining traction for measuring brand loyalty and advocacy among CSPs. The concept of NPS is used to ascertain how customers feel about the services they are receiving from a brand, in a bid to turn potential detractors into promoters and brand advocates. From an industry benchmark standpoint, the NPS ranking of the communications industry is much lower than other industry verticals – clearly indicating that CSPs have a lot of work to do to convert customers into brand advocates. NPS is becoming an important metric for measuring customer experience by most CSPs, and many CMOs are being measured internally with respect to their organization's NPS score. Anticipating and responding to social channels: Social media plays a critical role as consumers might start their research for any product on a social website and consider their friends' suggestions on Facebook or Twitter, compare product or services online and research further on blogs such as Yelp before actually making buying decisions in the store. From a CSP standpoint, they need the ability to manage their brand on the social channels and also proactively engage with their customers by providing social listening and monitoring capabilities. HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 5
Evolving Market Dynamics No Longer Allow Customer Experience to Be Piecemeal Let us take a look at some of the key trends that are shaping the communications industry today and directly or indirectly influencing CSPs thinking to put focus on the customer experience: Mobile broadband: As mobile broadband usage continues to increase, subscribers need to have a clear awareness of how much they have used to prevent bill shock. CSPs need to enable sophisticated management of traffic and entitlements across devices and family members and be transparent about their data offerings and roaming, or else dissatisfied customers will become angry and churn. Device proliferation: Subscribers today consume data services across multiple devices. They manage their data on devices such as their tablets and laptops, gaming devices and Internet-enabled TVs. In terms of customer experience, issues such as QoS, billing and quota management need to be managed holistically across multiple devices. Personalization: Subscribers today expect offerings that are relevant for their likes and preferences, such as video sharing, online gaming or live content streaming, and not simply tailored around rigid bandwidth or quota levels. CSPs need to support that and be able to create efficient customer loyalty programs that can enable customer stickiness. Demand for cross-channel consistency: Heavy Reading's research shows that for most CSPs, customer interactions aren't coordinated across channels, forcing customers to repeat themselves as they move between service/support channels – a customer dis-satisfier for sure. In our survey, more than 70 percent of wireless operators admitted they do not pass along customer information from one touch point to another, and an overwhelming 82 percent of consumers reported they had to repeat their information in a multi-touch buying process. Tomorrow's market winners should be able to deliver a cross-channel experience that provides the same seamless experience to customers, regardless of whether it is via the Web, smartphone or retail kiosk. OTT-like experience: Giant OTT players are shaping user expectations of how services should be delivered, consumed and experienced. For example, when subscribers are connected to the Internet, they expect to use services on any device and network, anywhere in the world. CSPs attempting to deliver a superior customer experience must ensure they provide their users an OTT-like experience – by modernizing their traditional voice and messaging services. In addition, the emergence of OTT providers has increased the pressure from marketing departments for innovative services and pricing plans. 4G service offerings such as highdefinition video, music, gaming, IP telephony, mobile TV, mobile applications and voice over LTE (VoLTE) might help combat the OTT threat, but they also make supporting the demands of customers more complex. Social media: In a world where more and more customers interact and talk about their experiences and issues online, online brand management has become big business. CSPs that ignore what customers say about them in unstructured environments risk swift and widespread brand damage. Making sense of structured and unstructured data to understand the mood and transaction pattern of customers in real time is therefore critical, as is social network and sentiment HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 6
analysis. This will help CSPs to take preventative actions to avoid churn or customer dissatisfaction, by providing preemptive service assurance and using feedback and sentiment to better understand their customers' preferences and enhance their personalized offerings. Even when facing the trends listed above, customer experience is still being tackled piecemeal by individual functional groups or solutions within the CSP. Hence, CSPs are often falling short on delivering a superior customer experience due to the following reasons: Lack of communications between supporting customer experience pillars (such as the ones described in the next section). This results in the lack of automation, which is especially crucial when trying to create efficiencies across various domains and systems. Inability to pull together customer insights from multiple sources such as network and BSS elements, and to act upon them in real time. Inability to minimize manual effort in troubleshooting or resolving issues. HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 7
Pillars of a Superior Customer Experience It is clear that all parts of the CSP's organization affect the customer experience – from CRM-oriented interactions, such as whether a call center agent is helpful, to infrastructure management-oriented events, such as whether a service is running at five-nines availability, transactions on a home location register are peaking or a cell site is reaching overload. However, it's important to identify the fundamental pillars of superior experience delivery. While customer care and service delivery (from the network to QoS to service delivery engines) have always been and will remain pillars of the overall customer experience, they will need to evolve and adapt to the emerging trends discussed above. And, today perhaps more than ever, the charging and billing aspects of the customer relationship drive the experience, so it is really the business support system (BSS) – with customer care as a subset – that is a pillar. At the same time, emerging trends demand that new solution pillars such as policy management and analytics be made a part of the foundation. Ranging throughout the entire ecosystem, from network to IT and business, each of the solution pillars mentioned brings its own dimensions to the customer experience milieu. Let us take a look at those pillars and the steps operators should take to harness them to deliver a superior customer experience and contribute to the aforementioned characteristics of anticipation, control, responsiveness and optimization to enhance the customer experience. BSS Pillar Add social elements to customer interactions: With users spending considerable time at social networking sites, they are developing habits and expectations that CSPs need to understand – and emulate. Many users today are more comfortable posting a question than calling the call center. CSPs need to meet these expectations by adding social dimensions to their customer care solutions – automatically monitoring and analyzing social interactions. Moreover, CSPs should utilize social channels to drive more personalized campaigns, leveraging new information such as interest groups, fan pages, devices, etc. Delivering smarter customer interactions will result in financial gain for CSPs – less churn, fewer call-center calls, increased subscriptions, etc. – as well as indirect benefits such as NPS improvement, increased customer satisfaction and increased first-call resolution. Ensure real-time collection, processing and evaluation of event data: Real-time interaction and response has a bearing on every aspect of the customer experience. Since customer experience is multi-faceted, data must be gathered from multiple sources, such as previous brand interactions, retail and e-commerce touch points, call-center data, interactive voice response, mobile devices and even social networks. Given the volume of factors that shape a customer's experience and buying behavior – reading and analyzing blogs, comparing prices, searching on different channels, etc. – the overall data set is bound to be extremely large, and the ability to collect this data in real time is crucial. Provide dynamic account control: To ensure customer satisfaction, CSPs need to allow subscribers to control and adjust their offerings and entitlements. For exam- HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 8
ple, subscribers approaching their usage limit should be able to choose whether they want to temporarily upgrade their plan or pay per usage; others asking to watch a live sports game should be able to instantly enhance their allocated bandwidth, etc. Enabling customers to set (for themselves or their family members) balance and usage thresholds as well as notification and alerts policies can enhance customer satisfaction while ensuring a truly personalized experience. Service Delivery Pillar Beyond network QoS and service assurance, service delivery must transform to provide the everywhere experience: As OTT players shape user expectations, CSPs need to enable subscribers to access both traditional services such as voice and messaging, as well as new rich communications services from anywhere in the world using any type of device (mobile phone, tablet, PC) and network (3G, Wi-Fi, fixed, etc.). This is essential as the world makes a phased transition to 4G/all-IP. Modernize traditional communications services: To maintain service relevancy, CSPs must create a user experience strong enough to keep subscribers from going elsewhere. This can be achieved by modernizing their services with multi-device, Web access capabilities and rich user interfaces. Policy Management as a New Pillar Accelerate introduction of new data offerings: In this era of growing demand for IP services, policy management plays a pivotal role in the definition of subscribers' overall quality of experience, enabling dynamic assignments of service entitlements as well as QoS levels. CSPs attempting to deliver most value to subscribers will need to closely align policy solutions with charging, supporting accelerated time to market for new offers as well as a more holistic view of the subscriber. CSPs must leverage both network and IT information to provide the customer with the best possible experience. Analytics as a New Pillar Introduce relevant, personalized plans and offerings: In a recent Heavy Reading survey, 40 percent of consumers say that they like to receive personalized offers from their service provider. Tools such as predictive analytics can use dynamic profiling to analyze incoming data sources such as customer care, product/ service/device portfolios, cost and billing, and network service quality to segment customers. Customers can be segmented by usage, interests, location, socioeconomic status, propensity to churn and influence in their network. HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 9
Break Down the Silos A unified approach to customer experience – across all foundation pillars – is the need of the hour. It is in the best interest of CSPs to look for unified solutions, as siloed solutions can only paint a partial picture of customer experience and result in suboptimal results. CSPs have traditionally operated with a complex, disparate set of silos, including CRM, billing, inventory, provisioning and fulfillment, service management systems, network management systems and the different generations of network architecture – each holding different types of data, in different formats and with different business goals. This must change if a CSP is to truly deliver a superior experience. A unified, holistic approach across all lines of business will allow for end-to-end insight and communication with individual subscribers. For example, as operators move forward with their interest in policy and charging, they should keep other lines of business and parts of the back-office in mind, as it will be crucial that they all work as a whole. So CSPs that already have or are implementing an analytics solution should ensure that it is closely aligned with their policy management and charging solutions. This is an example of breaking through the silos, because an analytics-driven approach to policy management and charging will enhance customer experience by building services, taking into account subscriber behavior and creating and launching personalized offers to customers based on analytics. Unification also enables automation, which is both efficient and should have a positive effect on the customer experience. For example, with a unified system, a CSP can run a marketing campaign that automatically pulls data from customer and billing databases, while using analytics to define relevant target segments. HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 10
Vendor Analysis – Comverse Comverse helps CSPs enhance the customer experience by facilitating smart customer interactions and account control; allowing rapid rollout of relevant, personalized plans and offerings; and enabling enriched communications services that can interoperate across devices and networks. The breadth of the Comverse portfolio enables CSPs to tackle customer experience holistically; addressing various aspects as described in Figure 4 below. Figure 4: Customer Experience Is Everywhere Source: Comverse Comverse provides telecom business enablement solutions that support service innovation and smart monetization. A robust portfolio of products and services helps operators transition to an all-IP world, capture a winning role in new value chains through service and business model innovation and enhance the customer experience. Solutions cover BSS, policy management, digital services and valueadded services. HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 11
Conclusion CSPs see customer experience as a key way of differentiating their brands in highly competitive markets where rivals offer similar services and have the same network capabilities. Our research has shown that customer experience management is a journey and will always remain a work in progress. Embodying the principle of continuous improvement, dazzling the customer will always require further evolution. Many CSPs are linking their customer experience initiatives with business transformation activities, as they seek to become partners and enablers of their customers' "digital lives." In order to accelerate telco responsiveness to the customer experience, decisions need to be made more quickly and cost-effectively, and, whenever possible, automated. For example, intelligence from supporting customer experience pillars should be able to determine how to heal a network fault without human intervention; or what the appropriate response to a customer experiencing difficulties should be – for example, automatically launching a campaign or providing the right self-service guidance. This automation requires tight integration between systems that create intelligence and systems that support customer-related business processes – OSS/BSS, policy control, service delivery, analytics, etc. At this stage of the market, CSPs face the challenge of implementing the right blend of customer experience-supporting solutions that will enable the automation of management actions. HEAVY READING | JUNE 2013 | WHITE PAPER | CSPS MUST DELIVER SUPERIOR CUSTOMER EXPERIENCE 12
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