Closing the Customer Engagement Gap THE TELCO CUSTOMER EXPERIENCE IN THE DIGITAL AGE
INTRODUCTION
The window of opportunity is closing for
3 Factors Changing the Game for Telcos
telecommunications companies. Digital service providers (DSPs), such as Google,
Content and digital service offerings are increasing on a global level.
Apple, and Amazon, are emerging as new
Digital services are expected to represent 8% of global CSP revenue in 2017.
players in the market with more expansive services than communications service
The increasing impact of over-the-top (OTT) technologies, such
providers (CSPs) and Telcos. These
as WhatsApp, Hulu, Skype, and Facebook Messenger
industry disruptors have perfected the art of personalized customer engagement and address customer needs head-on—giving their customers what they want, when they want it. CSPs and Telcos seeking to stay competitive need to raise the ante on their products and services by offering more to their increasingly demanding customer
The always-on, on-demand consumer mentality Shifting business models that create massive demand for big data and analytics In this e-book, you’ll learn how to:
base, without antiquated technology and
• Understand the impact of digital transformation in the Telco industry
processes holding them back.
• Discover the power of context and why customer engagement is
a scarce resource • Find out what it takes to deliver a superior customer experience • Unlock new business opportunities by monetizing new services and big data
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CHAPTER ONE
Dawn of the Digital Service Provider
Telco companies have watched and learned
Digital Services on the Upswing
that a basic telephony service offering is simply not enough. Their future success
Content and digital service offerings are increasing on a global level. Digital
depends largely on how they respond to
services are expected to represent 8% of global CSP revenue in 2017.
change and choose to interact with their customers to deliver exciting new services
Projected Services Growth, 2013–2017
1
and experiences. Most Telcos get that the time has come to offer more, but the challenge remains how to do so.
30%
DIGITAL SERVICES
2%
TRADITIONAL SERVICES
Serious About Services Many Telcos are looking to monetize beyond standard voice and data services. “How seriously are you considering the following as new revenue-generating, billable services?” Percentages are a combination of responses 1 and 2 on a scale of 1–5 (1 = very seriously; 5 = not very seriously)
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C H A P T E R O N E D AW N O F T H E D I G I TA L S E R V I C E S P R O V I D E R
The Digital Customer’s Rising Demands In order for Telcos to be successful, they
Customers expect services that are: 2
must understand the new landscape from their customers’ perspective. The balance of power has shifted in the customer’s favor: They are better informed, can quickly browse and compare products and
UBIQUITOUS
RELEVANT
RESPONSIVE
CONSISTENT
A rich omni-channel experience
Contextual, personalized information at every stage of the buying cycle
services, and have more options than ever.
Unfortunately, many Telco companies don’t deliver regular customer engagement highlights.
Real-time customer service with guided recommendations
A brand experience, with regular highlights and engagement moments
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C H A P T E R O N E D AW N O F T H E D I G I TA L S E R V I C E S P R O V I D E R
Understanding the New Customer Journey With the onslaught of digital devices
Traditional Customer Engagement Funnel
in customers’ hands, the traditional engagement funnel no longer exists. The A-to-B, step-by-step process has since been debunked as an archaic model, developed in an era when businesses told customers what was possible.
AWARENESS
INTEREST
DESIRE
ACTION
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C H A P T E R O N E D AW N O F T H E D I G I TA L S E R V I C E S P R O V I D E R
The modern customer journey looks
Modern Customer Journey
complex, but it’s rich with opportunities for engagement. Customers can skip steps, return to others, choose alternate avenues to purchase, recommend, and even criticize offerings. The modern model fosters a healthy, cyclical relationship in which customers respect trustworthy brands and brands embrace loyal customers.
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C H A P T E R O N E D AW N O F T H E D I G I TA L S E R V I C E S P R O V I D E R
The Customer Engagement Gap Many Telco companies try but still
As OTT players emerge with strong
Although the telecom industry knows the
flounder, missing opportunities to
online presences and modern technology
solution lies in the rich repositories of
engage and creating a gap between what
backbones, many Telco companies feel
customer data that they have access to
customers expect and what they actually
less prepared than these competitors
(unequivocally referred to as “big data�),
receive. Closing the engagement gap is
for such personalized customer
the main obstacle remains transforming
particularly challenging for the telecom
engagements, despite spending decades
this data into a true understanding of
industry as a whole.
delivering subscription-based services to
the customer.
their customers.
Customer Service Expectations vs. Reality 3
-
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CHAPTER TWO
The Power of Context
Context is a powerful device. It empowers
The Engagement Gap
companies to deliver the right products and services to the right customers at the right time. But massive roadblocks prevent Telcos from achieving this, from lacking data insights to incomplete customer views. In the modern economy where engagement is a scarce resource, Telcos must look to leaders from other industries to learn how to transform context into new revenue streams.
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CHAPTER TWO THE POWER OF CONTEXT
Telco Transformation’s Necessary 4
What’s Causing the Engagement Gap?
Bridge the Gap, Build Your Business
• Single-channel processes
In the telecommunications industry,
• Siloed systems
where today’s customers seek more
• Lack of integration
flexible engagement and carrier freedom
Nearly 40% of telecom executives believe
• Messy data
than ever before, bridging the context
that a shift in customer behavior is a top
• Legacy architectures
gap is important to retain and build the
threat to their business.
• Little to no collaboration between
business you already have and to push
marketing and IT • Digital illiteracy among senior leadership • Lack of insight about customer complexities
your Telco company to the next level. 82% of Telco executives believe analyzation and management of customer data are the top necessary business skills.
• Customer mythology
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CHAPTER TWO THE POWER OF CONTEXT
What the Right Solutions Can Do Customer engagement solutions give Telco companies the insight and tools to create immersive and intuitive experiences that intrigue, capture, and
But the wrong solutions can leave customers overwhelmed and downright uninterested. Consumer Perspectives on Engagement Tactics 5
retain target customers. Powerful customer engagement solutions can:
44%
Receive too many offers/promotions
40%
Say most promotions don’t offer anything of interest to them
37%
Delete most of the emails they receive without reading them
ENSURE Telco companies understand,
meet, and surpass customers’ expectations. HELP stage content that addresses
customers’ needs at just the right moment (e.g., targeted offers and
40%
Unsubscribe or opt out because they feel overwhelmed
discounts). DRIVE results and delight customers
across every touchpoint and channel, spanning physical and digital domains. BUILD on customer intelligence, not
just customer data. Closing the Customer Engagement Gap
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CHAPTER TWO THE POWER OF CONTEXT
Context is Key
Competition Across Industries and Continents
Without context, all parties are at a loss:
In the modern economy, telecom
Customers are less likely to care about the
companies aren’t the only ones vying for
service provider, and the Telco is less likely
customer time and money. Many savvy
to understand its customers’ needs.
companies across different industries around the world are changing their
Contextualizing this relationship using
business models to gain insights into their
robust IT systems and personalized
customers and keep their offerings fresh.
experiences can increase engagement, ultimately driving sales and improving
Companies in all industries are shifting
customer satisfaction.
from offering products without any regard for customer relationships to offering services built on relationshipbased business models. These companies are leapfrogging Telcos by leveraging modern technology trends built on the back of the widespread mobile and Internet services that Telcos have enabled globally.
Changing business models is the primary cause of disruption to business, industry, and society as a whole, according to global CEOs.
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CHAPTER TWO THE POWER OF CONTEXT
An Economy of Disengagement The current digital economy is the latest
Early 1900s: Cars appear in the early
2000s: An onslaught of mass-marketing
manifestation of an ongoing symbiosis
century as a scarce and expensive product,
messaging turns people away. But in this
between resource scarcity and resource
but advancements in manufacturing
digital economy, customer engagements
abundance—with the current scarcity not
technologies make them abundant,
are captured to improve the context of
being products or consumer desire, but
available, and affordable to the masses.
advertisements.
consumer engagement. 1950s: The mass production of household goods at affordable prices occurs in major industrial nations, but desire for these goods dips. Engagement is a Scarce Resource 6 1900
1950
2000
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CHAPTER TWO THE POWER OF CONTEXT
Smart, Connected Products Today, companies in all industries are
Turning Customer Data into New Revenue 7
beginning to offer smart, connected products and services, opening up new channels of engagement. This helps companies shift from knowing very little about their customers to capturing valueadded data that’s changing their business models and competitive strategies.
Closing the Gap Companies are successfully closing the engagement gap with interactive, easy-tonavigate customer experiences built using big data analytics. The ideal customer interaction includes everything from proactive recommendations based on past purchase history to OTT partnership promotions to personalized deals delivered based on mobile user location.
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CHAPTER TWO THE POWER OF CONTEXT
Engagement in the DNA The common thread among these
Who’s Leading the Charge?
companies is that they understand the need to up their customer game. Although some companies had to transform themselves to get there, newer players were able to build a modern, robust IT infrastructure from the
Switched from selling boxed products to SaaS and now monitors everything on its platform
ground up with laser focus on customer engagement. Telcos need not dwell on the dreaded thought of consolidating decades of legacy systems. With the proper strategy, anything is possible.
Europe’s answer to Zappos, went from startup to IPO in record time Has become a legendary brand in the way it executes successful customer engagement initiatives Has executed a multitude of initiatives such as an OTT network, statistical analyses, and a leading digital customer experience Has quickly become a major player in the sportswear business, with its aggressive acquisition strategy
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CHAPTER THREE
Delivering a Great Customer Experience
The customer experience is a sum of all
What Customers Want
moments between a customer and an organization—from a single interaction at
Delivering value is the key to customers’ hearts, which suggests
one touchpoint to an ongoing relationship
the draw to OTT services, but multi-channel and personalized
over a period of many years. Customers
experiences are not far behind.
across industries are drawn to OTT services, social media, and brands that
According to customers, standout companies: 8
deliver engaging contextual customer experiences. What are the implications for the Telco industry?
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C H A P T E R T H R E E D E L I V E R I N G A G R E AT C U STO M E R E X P E R I E N C E
Room for Improvement 9 According to Net Promoter Scores (NPS)* across industries, communication service providers are falling short of exceeding customer expectations.
* According to 10,000 U.S. consumers
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C H A P T E R T H R E E D E L I V E R I N G A G R E AT C U STO M E R E X P E R I E N C E
Adapt or be Left Behind
Customer Empowerment
The landscape has changed. Telco
10
customers are in the driver’s seat, and their journey is complex and omni-channel.
11
12
It’s time for Telcos to reinvent the customer experience or be overthrown by the competition. Effective strategies can turn engagement from a burden to a competitive advantage—ultimately one that delights customers and confuses the competition.
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C H A P T E R T H R E E D E L I V E R I N G A G R E AT C U STO M E R E X P E R I E N C E
What Should Telcos Focus On?
Key Competencies of a Telco
• Providing better customer self-help
Telcos that make the shift from legacy products to customer-driven
• Improving customer self-service
technologies and services will reign supreme.
• Leveraging digitally driven customer touchpoints • Creating innovative Digital Service
Then
Provider-type services • Using the power of context to deliver what customers want, when they want it
NETWORK INFRASTRUCTURE
TELEPHONY SERVICES
BACKEND SUPPORT DESK
DIGITAL SERVICES
PARTNERSHIPS AND ECOSYSTEMS
Now
CUSTOMER ENGAGEMENT
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C H A P T E R T H R E E D E L I V E R I N G A G R E AT C U STO M E R E X P E R I E N C E
What Telcos Can Do By adhering to solutions that
The 5 Pillars of Engagement
comprehensively combat challenges, Telcos will be set up for success.
COMMERCE: Omni-channel experiences are relevant to your
customers every time. BILLING: Billing is real-time, agile, and dynamic, with superior pricing
and service bundling capabilities. MARKETING: Robust, complete, and contextual marketing solutions
cater to an audience of one and distribute intelligence to the other pillars’ digital domains. SALES: Since traditional CRM is obsolete, new sales processes
must take into account all the channels of interaction, with myriad options, bundles, and parameters across any device. SERVICE: The service experience is consistent across all channels—
at the call center, via social media, or on a device.
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C H A P T E R T H R E E D E L I V E R I N G A G R E AT C U STO M E R E X P E R I E N C E
The DSP Customer Experience The result is a clean, consistent, and gratifying customer experience that reduces churn and increases both retention and NPS.
CUSTOMER ENGAGING WITH TELCO ACROSS ANY CHANNEL AND ANY DEVICE IN A CONSISTENT AND SATISFYING WAY
With a complete and satisfying customer experience in place, the next step for Telcos is to look to monetizing the experience.
ABILITY FOR CUSTOMERS TO MANAGE ALL SUBSCRIPTION ATTRIBUTES AND SUPPORT NEEDS USING SELF-SERVICE CAPABILITIES
GIVING THE CUSTOMER CONTEXTUAL LOCATIONBASED OR CONTRACT-TRIGGER–BASED OFFERS
REWARDING THE CUSTOMER FOR LOYALTY BY OFFERING BENEFITS, DISCOUNTS, AND UPGRADES
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CHAPTER FOUR
Monetizing the Experience
Customer experience is a hot topic
Telcos That Reduce Churn See Savings
because it can translate to real business value, impacting forecast, stock price,
5% CHURN
and top-line growth. Satisfied customers can turn into brand evangelists, but
4% CHURN
dissatisfied customers can quickly dissolve a company’s hard work.
3% CHURN
The Power of Brand Evangelism Brand evangelists buy more products,
Most Telcos operate under market conditions that are
refer others, remain customers for longer,
competitive with low switching costs. It’s in this climate that the
and offer feedback to improve a company’s
links between a NPS, churn, and future growth are clear. So, how
offerings. Improving a company’s NPS
can Telcos improve the customer experience and impact their
is often seen as the KPI to creating
bottom line?
brand evangelists.
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CHAPTER FOUR
MONETIZING THE EXPERIENCE
From Retail to Real Returns The customer experience starts with
What are the most important goals of your commerce platform? 13
retail—on the Internet, in store, and via
Critical
mobile—and requires a robust commerce platform. In fact, 84% of Telcos say it’s
Important
Not very important
Least Important
Reduce customer chur n 48.8%
“critical” or “very important” for their commerce platforms to enhance the
Very Important
25.6%
11.6%
7%7
%
Provide a single repository of conten t
customer experience, while 74% consider
23.3%
23.3%
34.9%1
6.3%
2.3%
reducing customer churn to be just as important.
27.9%4
1.9%%1
6.3%
9.3%
4.7%
Enhance the customer experienc e 65.1%
18.6%7
39.5%
34.9%1
%7
%
2.3%
6.3%
4.7%
Increase revenues 67.4%
0%
16.3%9
20%
40%
60%
.3%7
80%1
%
00%
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CHAPTER FOUR
MONETIZING THE EXPERIENCE
Savvy Telcos Use Retail Analytics Historically, Telcos have only looked within
Social Media Flash Sale via WhatsApp
their industry for inspiration on how to manage billing and monetization activities. But today’sTelcos are borrowing best
Location: Munich
practices from many other industries, such
Network Capacity: 50%
as high-tech media, the rapidly emerging IoT (connected device) market, and retail. To help predict what customers will buy next, Telcos are looking to analytics and algorithms (strategies used by the
Customer: 10% Data Remaining Monthly Spend: €50 Churn Risk: Average
retail industry) and leveraging complete customer engagement solutions. With a single, real-time customer view, Telcos can deliver the right offer to the right customer
Offer: Love WhatsApp? Refer 2 friends for €5 free WhatsApp Data
at the right time. But the secret is applying smart algorithms. In the example here, the operator has generated a dynamically priced, real-time offer for a curated segment of users on WhatsApp in a region with a lot of current network capacity.
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CHAPTER FOUR
MONETIZING THE EXPERIENCE
Predicting Customer Buying Habits* 14
Anticipated Buyer Habits
Sophisticated algorithms are used to determine what mobile phone owners will purchase next.
For maximum impact, offers should be delivered across all channels and customer touchpoints in a contextually relevant and timely manner.
%
* Percentages indicate the estimated take-up probability for basic mobile plan owners.
%
%
%
%
%
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CHAPTER FOUR
MONETIZING THE EXPERIENCE
New Markets Demand New Services Given that Telco growth will come from
Monetizing Digital Transformation
the monetization of new services, best practices will help guide Telcos to success. To continue to refine their core business
CORE
while also breaking into new digital markets
Voice, data, SMS, multi-play subscriptions, IoT services
and expanding B2B space, Telcos need one complete strategy. DIGITAL App stores, OTT services, micro-transactions
B2B Enterprise, SaaS and cloud, ICT services
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CHAPTER FOUR
MONETIZING THE EXPERIENCE
Legacy Solutions Can Hold Telcos Back When considering monetization, leveraging
What monetization solutions will Telcos invest in?
legacy platforms might seem logical, but it’s not always easy. Many legacy billing solutions are not suited for it, such as cloud subscriptions or complex revenue share models between different
37.2%
CAGR SASS BILLING 15
16%
CAGR REAL-TIME BILLING
partners. Furthermore, they weren’t designed to implement innovative, agile use cases either, where the ideal offer and monetization strategy isn’t clear from the outset. These legacy billing solutions are typically very B2C-focused with little exposure to other scenarios critical to
3%
CAGR ON-PREMISE BILLING
Telco growth.
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CHAPTER FOUR
MONETIZING THE EXPERIENCE
Legacy Billing Solutions vs. Best-in-Class Customer Engagement Solutions Telco’s legacy billing solutions don’t
Best-in-Class vs. Legacy Solutions
cover as much ground as those that engage customers. BEST-IN-CLASS
LEGACY
= 0%
= 100%
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CHAPTER FOUR
MONETIZING THE EXPERIENCE
Putting Billing Front-and-Center Some Telcos don’t want to change their monolithic billing systems, but many
Old-World Lexicon
leading Telcos are embarking on ambitious
• Revenue management
transformation projects. By implementing
• Business Support Systems (BSS)
solutions for these new services and
• Batch
progressively moving over their general business to the new platform, leading Telcos know that the focus has to be on moving billing from the backend to front of house.
New-World Focus • Customer engagement
The telecom industry is poised to
• Monetization and operations
benefit by shifting focus to a more
• Real time
dynamic, multidimensional approach to doing business.
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CHAPTER FOUR
MONETIZING THE EXPERIENCE
Data Creates Value Telcos need agile monetization and
Customer Interaction-Generated Ideas
operations solutions that provide a single customer view and bring new offerings to
ENGAGE
market quickly so that they can analyze the performance before doing it all again. In the digital world, every customer interaction creates data and data creates business value.
Ideas for NEW BUSINESS VENTURES are created through this data-driven value chain.
REACT
ANALYZE
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CHAPTER FOUR
MONETIZING THE EXPERIENCE
The Future of Customer Experience As Telcos face increasing pressure
With a mastery over these 4 key areas, Telcos are poised to reap huge benefits.
from pure-play Digital Service Providers and other OTT players, they are looking for ways to harness the latest
Understand the impact of digital transformation
technology and process innovations
in the Telco industry.
to help them renovate their business models and find growth in new areas.
Discover the power of context and why customer engagement is a scarce resource.
As this e-book has highlighted, the challenges are clear and numerous, but
Find out what it takes to deliver a superior
so are the opportunities. Powered by new
customer experience.
customer engagement solutions, leaders are widening the gap between themselves
Unlock new business opportunities by
and laggards, ensuring that they will
monetizing new services and big data.
emerge from this age of disruption with products, services, and (most importantly) relationships that are aligned to their customers’ needs.
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SOURCES
“Market Trends: Adjacent Market Revenue Opportunities for CSPs in 2017,” 2014, Gartner 1
2
“From CSP to Digital Service Provider,” 2015, IHS
3
“Seamless Retail Study,” 2014, Accenture
4
“The Power of Context for Telcos,” 2015, SAP
5
“Annual Global CEO Survey,” 2014, PricewaterhouseCoopers
6
SAP
7
SAP
“Worldwide Subscription Billing and Payment Software Forecast,” 2015, International Data Corporation 15
16
“Convergent Charging Software and Services Report,” 2015, IHS
“2014 Global Customer Service Barometer,” Ebiquity/ American Express 8
9
“Consumer Benchmark Survey,” 2015, Temkin Group
“2014 Global Customer Service Barometer,” Ebiquity/ American Express 10
11
“SAP Cloud for Customer Engagement,” 2014, SAP
12
“SAP Cloud for Customer Engagement,” 2014, SAP
“Buying Essentials When Considering a Telco Multi-Channel Commerce Solution,” 2014, Telecoms.com/SAP 13
“Crunch Time: Using Big Data to Boost Telco Marketing Capabilities,” 2013, McKinsey & Company 14
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To find out more, please visit SAP online. For SAP for Telecommunications, visit: http://go.sap.com/solution/industry/telecommunications.html For SAP Hybris, your partner for Customer Experience Management, visit: http://hybris.com To join the discussion about the digital transformation in the Telco industry, visit: http://www.the-digital-future.com
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