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The Customer Engagement & Experience Company

Mobile Number Portability:

Creating Customer Engagement strategies in an evolving telecom landscape

Author

Santosh Kurian

Designation

Vice President Business Development

Date

Feb. ist 2011

www.customercentria.com

MNP brings operators face to face with the question of how they would like to spend their time and resources in this changed scenario: Acquiring customers through short-term offers or Bonding with new and existing customers to create a lasting customer experience.

(MNP) enables mobile users to change to desired Mobile network operator without the need to change their mobile numbers. India has more than 700 million subscribers across the country with nearly 10 operators in each regional circle. MNP is available to all mobile subscribers across India from Jan 20, 2011 onwards.

With such a large volume of customers, it would be interesting to watch closely, consumer behavior amidst the rapidly changing telecom environment, and the resultant marketing strategies that are constructed, focusing on either an aggressive short term acquisition plan or an engaging long term relationship building plan.

What this means ... For subscribers

MNP, reiterates that 'Customer is the King'. Today they have the freedom or flexibility to retain their mobile numbers, while switching from one service provider to another, based on their customer satisfaction levels.

In today's scenario, given that price is not one of the reasons to switch, given that most operators function within a cut throat price band, a customer could have three broad reasons to change his current service provider:

c

Fixed Infrastructure and the resultant quality of product i.e. number of towers, technology, bandwidth etc.

c

Operational considerations and the resultant quality of service i.e. billing, call centers, accessible touch points etc.

c

Overall dissatisfaction with service provider which could include intangible reasons like brand image, promotional offers and overall no brand relationship, which would provide him with a compelling reason to stay.

For Operators

MNP creates a highly competitive market, where service providers will need to go all out to retain their customers and also acquire new customers by offering them, what they really want. The winners of this acquisition game, would be those companies that achieve a perfect balance of being able to decode exactly what the consumers really want (i.e.), good quality of service, competitive price and excellent customer relations, and being able to consistently live up to that expectation.

Given the current high churn rates (the telecom industry sees a churn rate of between 4.5-8% a month preMNP); subscribers opting to shift providers through the MNP route could be limited in the beginning, with most opting for a "wait and watch" approach. The churn could gain momentum, as the herd mentality starts to kick in, and there could be significant gains at this stage for operators that have played their cards right. Post which, the curve is most likely to flatten to a slightly higher than normal churn.

Maturity Phase Customer churn

Potential to limit overall churn with proper customer engagement

Blue - Operator with status quo efforts

Yellow - Operators actively engaging with existing client base while balancing efforts to acquire new customers

Thick Black line denotes the regular churn without MNP

The graph illustrates inevitable initial churn while people queue up to exercise their right to choose. Now, the key differentiator in determining how the game will be played will be the companies that have been or will adopt customer engagement strategies with a focus on delivering superior customer experience. And it is these players that will be able to keep churn to a minimum, while at the same time, being able to attract newer customers. The main objective for a provider would be to limit the impact in the 'mid-term' where a positive 'port' experience could fuel further churn.

While preliminary empirical MNP data denotes that the change in customer churn across industry might not increase by more than 1%. This new scenario, gives customer complete mobility across networks and forces marketers to ensure high levels of service, and keep their customers completely engaged.

As with high growth & distribution driven industries- the focus in Telecom has always been gross-additions. The mantra has been extending reach - far and wide without a concerted effort on distribution efficiencies or loyalty based revenue enhancement; VAS and other ARPU building measures are gimmicky and don't conform to a predictable pattern - for that there needs to be a prudent balance of efforts between attention to retention and acquisition.

With MNP, if the leakage is not contained - it suggests the operator has been unsuccessful in sorting out fundamental issues - it would be safe to assume these very reasons would lead to the very same churn from newly acquired customers over time. ReferralsJWOM have a strong influence on decision making - sooner or later the newly added subscriber will face the same issues resulting in earlier customer churn and a vicious cycle continues.

With the customer, now, firmly in the driving seat Telecom Service providers, have to acknowledge the "voice of the customer", and take the effort to start a dialogue, with the honest intention of building a long term relationship.

The Difference Maker: Customer Ownership Through Enhanced Customer Experience

MNP will definitely have an impact and create volatility in the telecom market but it will simply be an expansion of already existing churn propensities.

With millions being spent on communication to build a brand image for most service providers, phrases like customer relationships, brand bonding, and even the basic good old customer loyalty are being put to the test.

If a service provider professes to truly 'taking care' ofits customers, by providing them with a superior level of service, and promptly addressing their problems/grievances at a competitive price, a good beginning and a sound foundation has been laid. But this in no way ensures that this will remain a long term relationship.

Customer-Engagement-Ready for MNP

Customer Engagement becomes a critical pillar in retention, because it's not just about keeping your customers but it's about truly owning them.

The fact is that this is a "communications" industry. And what the consumer requires is that his service provider truly communicates. And for this to happen, a deeper understanding of the consumer is an absolute necessity.

Must do'sfor a strong customer engagement strategy:

c c c c c

Create Analytics driven Actionable Consumer Insights: Use call behavior, past interactions with the company and basic transaction data as the source.

Personalise! Personalise! Personalise: Arrive at the right offer, at the right time, through the right channel for each and every customer.

Craft and Execute the interaction: Whether it is a sms, an electronic mailer or an outbound call. Every interaction has to be "delightful".

Listen: How did your customer reactto you?

Learn: Document the learning's, so that you know.

And this process repeats itself, again and again and again, until your customer is truly bonded, and this is when the switching costs become really high. Because the next service provider doesn't know him that well at all!

Most telecom marketers are only looking at the green grass in the neighboring field, rather than ploughing and harvesting their own. Currently, most messaging is aimed at luring their competitors customers rather than and engaging (and retaining) their existing base.

At least from a customer service perspective, there are small steps in the right direction, but it's just not enough. A very tactical, local example was from Loop Mobile a regional operator in Mumbai went beyond the talk by offering to compensate subscribers with 50 paise for every dropped call.

On the retention front, most large telecom providers are known to be sending "Thank you for staying with us" smses. The strategy for larger players should be to carry out implicit acquisition campaigns while ensuring the backend jsupport system for existing customers in enhanced. Many operators have made significant investments in churn modeling software, but they still struggle to get maximum value from their data because of the expertise required.

To help organisation's effectively manage their churn, Customer Centria uses predictive modeling techniques based on sound empirical evidence and strong analytics facilitated by a comprehensive marketing services suite of services which ensure that we create value for the right customer at the right time, through the right offer and the right channel.

Marketers can gain from our expertise in having delivered quality solutions to telecom companies in India and across the globe including the leading telecos in South Africa and New Zealand.

Customer Engagement and Experience, has to become an everyday part of a telecom marketers life, in order to stay differentiated. This creates brand advocates, and the results will be resounding and far reaching.

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