With the arrival of customer-focused digital service providers (DSPs) like Facebook, Netflix, and Google into the telecoms arena, telco operators are in serious danger of becoming bystanders.
To survive and even thrive, says Openet’s Barry Marron, operators need to shift their attention from the bottom line, to a much more rewarding customer centric approach. To do this operators must first start to measure themselves against the competition – in this case the DSP. These companies engage with mobile customers day in, day out and more importantly, customers engage with them. The main reason is relevance.
A key aspect of a well-orchestrated retention strategy is the ability to produce offers and services, specifically tailored to the needs, values, and context of an individual customer. Engagement that delivers a personalised experience, will result in happier and more loyal customers, reducing churn and optimising their lifetime value. This is something that many DSPs do well – and operators frankly, do not. DSPs are embracing personalisation, concentrating on delivering the optimum, personalised customer experience. For example:
When a customer signs up as a Netflix customer they get customer service and marketing emails, almost on a daily basis. These emails are not spam, but instead provide customers with useful information based on the content they have watched, or the devices they use, etc. These communications are driving customer engagement with Netflix, and as a result customers are watching more on Netflix. In Q1 2013 Netflix had 4 billion hours of customer viewing. Two years later the figures for Q1 2015 are up to 10 billion hours, with its stock jumping 12%.
Most operators have been slower to embrace this type of customer engagement – many customers only get a bill emailed to them once a month, and some don’t even open it. Yet, a few are certainly leading the way, for example:
o2 UK now deliver additional value to their subscribers by partnering in the UK with Channel 4’s new mobile, all-in-one digital hub called All 4. This value added service gave o2 UK customer’s access to All 4 content 48 hours before it was available on other media.
Like o2, operators must start to draw on their strengths; their network, their customer base and their extensive amounts of customer information, to help deliver excellent customer engagement. Operators have an opportunity to develop deeper relationships with their customers through smarter engagement and drive trust, loyalty, upsell opportunities and profitability. The key here is the operator’s real-time visibility on a customer’s behaviour, which they can use as a trigger to drive an individual engagement— everything from a CRM message to a specific upsell of a new offer (including those from content and other service provider partners).
However, to do this operators need systems in place that enable rapid product development, launch and monetisation. Business support systems (BSS) need to be able to drive real-time, relevant customer engagement – from upselling a new service to providing a customer notification on a loyalty offer. CSPs already have the data in their systems – the key is harnessing this data and turning it into relevant and timely intelligence to drive customer engagement. This type of customer engagement ultimately involves processing huge amounts of data, including data analytics, based on several data sources – user equipment, network and operations/business support systems. Each of these sources must then interact with each other to gather a comprehensive insight.
This poses a challenge to the legacy systems, as many existing OSS/BSS systems are not prepared for emerging new technologies like SDN (software defined networking) and NFV (network functions virtualisation).
NFV concepts need to be applied in the OSS/BSS to deliver on the promises such as agility, reduced total cost of ownership, increased elasticity and greater service availability. This is particularly important for policy and charging functions as there is little point in having a dynamic network if the monetising, access control, and revenue handling systems are not similarly endowed. The advances in network functions virtualisation are enabling these systems to be quickly installed with reduced OpEx and CapEx, thus providing operators with a more agile operating environment and processes.
Operators, like DSPs, have an opportunity to develop deeper relationships with their customers through smarter engagement and increase the relevance of themselves to end-users. This can drive trust, loyalty, upsell opportunities and profitability. However, in order to do this operators need to provide engagement that is personalised, timely and relevant—otherwise customers will not re-act to what they see as generic and irrelevant marketing communications.
The author is Barry Marron, GVP Marketing at Openet
