Customer experience: Standing out in the crowded mobile market
Ten years on from the launch of the iPhone in 2007, the mobile landscape is a very different place – from innovations in wireless technologies to mobile applications, smart devices to the Internet of Things. Operators are now faced with dealing with a very dynamic market with disruption and regulatory pressures being the norm and they are having to find ways to add value and compete on price at the same time. Undoubtedly, this is good news for consumers but for operators, this means falling average revenue per user (ARPU) and lower profits, says Bill Safran, CEO of Vizolution.
Breaking from the ranks
There is no doubt that churn rates are an issue for all mobile operators and many have responded by moving towards convergence in the hope that a multi-play approach will make customers more sticky and less likely to switch operator. In the absence of perceived differentiation in the market, operators have also had to constantly innovate with new tariffs and find ways to add value from offering free subscriptions or data.
The problem with this approach is that it only offers a short-term point of differentiation until another operator offers a better value-add or copies the promotion.
This spiral of price competition and value-added services has meant that revenue and profit margins have been steadily decreasing year on year. Operators looking to break out of this cycle need to find ways to differentiate themselves in a crowded market. Whilst it does seem to be a pessimistic outlook for the market, there are some opportunities that remain for differentiation.
Customer experience offers a real and long-term way for operators to differentiate themselves and ultimately retain customers. For example, research by Harvard Business Review shows that customers with the best experiences spend 140% more than those who had the poorest.
Customer experience tugs at the bottom line
Earlier this year, the UK Customer Satisfaction Index (UKCSI) ranked 13 industries and found telecoms to fall at the bottom, below utilities, public services and banks. The same report also found that, compared to a UK average of 12.5%, telecoms sees the highest number of complaints, with 20% of customers experiencing issues.
For mobile operators, there are a number of challenges that directly impact on customer experience, especially for customer journeys conducted over the telephone. These include long compliance scripts, explaining complex products and tariff options.
Failures in these areas are impacting on journeys, with increased journey times, reduced conversion, failed compliance and increased volumes of calls from customers seeking clarity, or questioning what they have purchased. These issues all have an impact on the bottom line while also negatively impacting on customer satisfaction.
The upside is that these are all problems that can be addressed with straightforward and intuitive solutions.
The first thing to do is identify sticking points in the journey.
Crucially, providers seeking to differentiate themselves on customer experience need to first think about these pain points from the customer’s perspective. Are device or package comparisons well communicated, or are customers left confused by the range of options open to them? Are customers being forced to speak to multiple agents to solve a single query?
Similarly, are terms and conditions – whether for insurance or for plans – well understood before a sale is completed? Also, looking at the longer customer journey – do customers call back at a later date because they are confused by what they have bought? Issues like this also give an indication that there is a problem in the earlier customer journey.
Once operators have identified the problem, they can start to devise some intuitive solutions that keep the customer at the centre. For a failed digital journey, can you introduce help at the point of need to get them back on track and drop them back into their digital journey?
Similarly for telephone journeys, can agents bring a digital element into the call, using tools to enable call centre agents to visually show customers product and tariff comparisons or show and digitally sign documentation? The same applies to service interactions – if you could show someone their bill and explain it to them with that visual assistance, you are much more likely to resolve the issue on the first call and prevent further calls from the same customer.
Within the saturated telecoms market, it’s clear that customer experience can be a significant differentiator that could help to reduce churn, build loyalty and ultimately, drive revenue. Bain & Company forecasts that companies excelling in customer experience grow revenues four to eight percent beyond the rest of their market. With the competition closing in and shrinking margins, mobile phone operators stand to make great gains by making customer experience a priority.
The author of this blog is Bill Safran, CEO of Vizolution