The four pillars of next generation digital customer value management
By : Flytxt
It is an established fact that Communication Service Providers (CSPs) have not been successful in protecting their traditional voice and messaging revenue streams from the Over the Top (OTT) players. Evaluations have shown that over-the-top (OTT) applications generate 20% to 50% less revenue for CSPs. While the exponential rise in data consumption has provided some relief, but this has not been enough to overcome the consistent decline in mobile voice average revenue per user (ARPU).
Competitive pricing pressure and OTT disruption have been accompanied by rapidly increasing infrastructure costs as demands on bandwidth and speed have continued to grow exponentially. As per a World Economic Forum Report, there has been 13%-36% decline in ARPU in all regions globally since 2012.
Decoding the industry challenges
The telecommunications industry is at the forefront of digital transformation, both as an industry witnessing large-scale change in its market environment and as a key driver of worldwide digitisation. Investment by the telecommunications industry in technology and interoperability has underpinned an immense shift in information and capital through the global economy, while providing the building blocks for the emergence of entirely new business models across industries.
Competitive marketplace and increasing usage of alternatives such as Wi-Fi and OTTs is seen as a threat to the telco traditional revenue. For these reasons, traditional offerings in postpaid such as voice and data now comprise unlimited packs due to which, CSPs are experiencing revenue stagnancy. On the other hand, an increasing number of consumers as well as businesses is engaging with digital subscriptions for entertainment, news, books and even healthcare.
OTTs have cannibalised the traditional telecom revenue and it is clear that telecom offerings are longer a driver for incremental revenue.
The shifting CSPs battleground
Customers are beginning to judge the quality of the products or services they receive not only against the multiple players within that sector but also against the customer service they have experienced in other industries. Customers now expect levels of personalisation, on-demand access and quality standards matching those of the leaders in any industry. Making a note of this fact has become increasingly crucial for operators with expectations evolving faster than the industry’s ability to meet them.
Strengthening CSP’s Digital subscription arm
As digital disruptors and OTT players attack traditional communication revenues, telcos are pursuing opportunities to climb the digital ladder up to the services layer. With a large customer base, ownership of key infrastructure and strong technology capabilities, telecom operators are trying to take on the role of digital services providers, often emerging as disruptors to other industries.
Bundling option for digital services along with telecom billing can provide visibility of subscription, digital usage and activities. Accessing online and digital behaviour of customers can allow CSPs to create digital customer centric products and services like video streaming, music subscription, mobile Wallets, micro-insurance and so on.
Role of Customer Value Management (CVM) platform
- Creating Unified identity across the digital subscription
Uncovering anonymity of customer is critical to serve them in digital world. Hence Identity management is an essential component of the digital marketing ecosystem. In simple terms, it is the ability to capture, source, integrate, cleanse and link data to recognise different consumers. CVM solutions need to empower the marketers to consolidate online and offline data sources to support unique identification of consumers and constantly uncover the anonymity of customers by profiling him more accurate and deeper.
- Persona Creation & Prediction of Customers’ Needs
Once the anonymity is uncovered, it is time to create detailed persona for understanding your customers on a deeper level – leveraging emotional, motivational, situational, behavioral, and environmental context. Use of advanced analytics and artificial intelligence techniques helps in predicting their affinity, propensity so as to help markets understand the latent and momentary needs of customers.
- Automated, intelligent and real-time contextual customer engagement
Telcos now wish to move beyond traditional descriptive and exploratory analytics (mainly used for post-mortem of business decisions, to advanced analytics and machine learning for automated decision making. These new big data analytics technology platforms are transforming personalisation by allowing telcos to manage customer expectations in the very moments of truth.
Artificial Intelligence (AI) can greatly personalise and thereby, transform the customer engagement process. Tools like decision management, natural language processing (NLP), text analytics, and machine learning areas can be used to engage customers more deeply in the moment. They allow organisations to provide the type of experience the customer expects, balanced with the needs of the business – goals, margins, acquisition targets, top-line growth, etc.
Entertainment OTT applications are real enablers for accessing a subscriber’s profiling, most recent usage behaviour & sentiments in real-time. Integrating these parameters with telecom data sources will enable customer CVM platforms to engage customers proficiently.
- Incremental Revenue Measurement and Optimisation
Such subscription tactics have allowed operators to create unique service bundles which can also be charged in bill using multi charging models such as pay-per-view, pay-per day, pay-per genre and pay-per device. Distributing the revenues gathered through the CSP bill and pre-pay account to all players in the value has huge potential to generate incremental revenue for CSPs. Along with customer engagement, it is absolutely essential that measurement methodologies are also put in place to track incremental revenue generated along with digital journeys of customers. This will also help in giving a feedback to marketers as to which services are doing well and what strategies are working and not working leading to optimisation.
Summing it all up
Digital transformation has the potential to deliver evolving need for evolving telecom customers, while providing businesses with new opportunities towards value (revenue) creation for telecom organisations.
Subscription services for entertainment, handset insurance, cab and live TV are partnering with telcos merging subscription billing models within telecom billing. Such unified integration of digital services will allow users to manage subscriptions conveniently and telcos to engage and influence digital behaviour of customers.
Digital subscription has proven higher engagement for customers, creating visibility on digital usage of subscribers and has potential to yield greater revenue for telecom companies and for those reasons Telecom CVM has to incorporate digital content subscriptions strategies to thrive subscriber experience & grab uplifting revenue opportunities.