There has been much debate about the way that mobile tariffs charge customers who have used data while abroad, especially questioning the lack of education for consumers on data roaming and how to use it. However, EU laws that came into place last year aimed at preventing overcharging for roaming has raised the question as to whether telcos are losing control over tariffs and the products they sell, and how this impacts the less tangible aspect of the customer experience?
The cap on data charges means that telcos are losing a valuable source of income, which will need to be supplemented from elsewhere if they are to continue to be as profitable. This is perhaps a small sign that the market’s moving towards commoditisation. In more recent years, operators could compete on a product level, but it seems that this trend will be changing and the market will be forced to return focus onto the customer in order to protect both revenues and the customer base.
Because of the complexity of a telco’s business model, the industry faces multiple customer engagement challenges. Far beyond the traditional landline, telcos now offer everything from mobile devices and tariffs, through to subscription TV, broadband, as well as full packages of multiple services. However the market has become saturated; there is a wide range of suppliers that now offer these products, making it very difficult for competitors to stand out from one another.
Customers switching providers also puts the pressure on. Ofcom rules have made it possible for customers to switch providers without a charge. The law means that if mobile phone, landline or broadband contract providers decide to increase their charges, they now have to give customers 30 days’ notice, and if customers then decide to switch providers because of this, they cannot be hit with a penalty charge for changing.
So with all the changes in the marketplace, providers face some hits on their profitability if they don’t adapt. Today’s consumer is looking for speed, efficiency and positive interaction in its experiences with companies. This is true for any sector they engage with or buy from; but perhaps the complexity of modern telco’s portfolio means that it applies here more than anywhere else.
According to a survey by Strategic Analytics, 2.1 billion people worldwide used a smartphone in 2014, with that figure expected to hit 2.5 billion in 2015. Being able to interact with the companies that they buy from, or are thinking of buying from, through these different mobile channels – SMS, web chat, IM, mobile web, social media – is increasingly becoming the norm. But it’s not just offering customer service via mobile functions; it’s about delivering the same service via any channel. This means getting the same options for service via whatever channel the customer desires. This means a seamless, barrier-free and smooth conversation, without a break, that the customer doesn’t notice.
With telco providers having to juggle market changes, pressure from industry regulators and government, complex product and service portfolios, and left fighting for customer loyalty, it will be interesting to see how and if companies step up the customer experience to maintain a competitive edge. However it is important to remember that putting focus on to the customer, rather than the product, means a strategic change in mind set for telcos. Mobile device lifecycles have become shorter, with newer and more powerful options released every year, but fixed-period exclusive contracts with manufacturers and bells and whistles will likely only go so far in securing loyalty. Business models need to change to recognise that the power is now in the hands of the customer, and not the telco provider any more.
The author is John Batty, senior contact centre consultant at Aspect Software
