Truly Managing the

Customer Experience November 2012

Sheryl Kingstone, Director, skingstone@yankeegroup.com
Table of Contents
Measuring Network Service
Highlights Isn’t Enough 1

• Consistent mobile access is critical to consumers, creating demand for higher Going Beyond the Basics 2
service quality and improved user experiences. Sixty-nine percent of respondents
to Yankee Group’s consumer survey want to be connected at all times, and nearly the Requirements for Transforming
same number say their mobile devices are highly important to both their social and the Experience 4
work lives.
Delivering the Framework
• Customer experience management (CEM) tools are a valuable service, but only if for Success 5
they measure the end-user experience. Communications service providers (CSPs)
must learn from customer expectations, as well as track, monitor and respond to any Conclusions and Recommendations 9
change. The challenge is to apply this knowledge across the company to enhance the
user experience while still retaining profitability for the operator.

• Service quality management (SQM) is the proper way to transition to CEM. The
key is to move from a per-service-only measurement to a per-service, per-user
(PSPU) measurement. Some vendors are currently only measuring quality of service
(QoS), which fails to take into account the emotional factors impacting the end-user
experience. The goal is to move from just an engineering point of view (good, bad,
fair) to a more personalized approach (satisfied, unsatisfied).

• Net Promoter Score (NPS), social monitoring and big data initiatives aren’t enough.
While the critical success factor of the customer experience is the extent to which
the customer’s needs are satisfied, indicators such as Net Promoter Score, likelihood
to churn and other loyalty indicators can be a great start. However, it’s critically
important to relate these results to key network events.

Measuring Network Service Isn’t Enough

For CSPs, providing the right customer experience is the key to boosting operational
efficiencies, building customer loyalty and growing wallet share. The goal is to conquer
new markets and generate new revenue streams while delivering the right customer
experience that keeps customers happy and the business profitable. And while SQM
has been accepted for the past decade with positive results in measuring and managing
the quality of network service, today’s end-users are more sophisticated. They expect
not only higher service quality, but also a differentiated, consistent and transparent
end-to-end customer experience.

This custom publication has been sponsored by Huawei.

Truly Managing the Customer Experience
As Exhibit 1 shows, CSPs must now move from measuring the
quality of individual services to measuring the complete end-
user experience. The successful operator will be the one that
can capitalize on this trend and focus on total CEM.
Exhibit 1: Measuring Per Service Per User Ensures a Better Customer Experience
Source: Yankee Group, 2012
Per Service and
Per Service Per User
Device
Voice
User
SQM Experience
Mobile
Broadband
Going Beyond the Basics
Consistent mobile access is critical to today’s consumers:
Sixty-nine percent of respondents to Yankee Group’s 2011
US Consumer Survey, December, want to be connected
all the time, and nearly the same number say their mobile
devices are highly important to both their social and work
lives. In a world where product differentiation leads to
short-term success, customer-centricity for the service
provider market is paramount.
Managing the customer experience is not just about
capturing customer information and order requests; it
requires a total transformation for the industry. CSPs must
evolve from an operational service strategy to a more
customer-focused experience management model. This is
the only way they can differentiate themselves from the
competition and increase loyalty.
© Copyright 1997-2012, Yankee Group Research, Inc. All rights reserved.
November 2012
Current Operator Strategies Are Not Meeting Demand
CSPs in both mature and emerging markets face competition
from aggressive entrants that have changed the foundation
of the industry. Historically, the communications industry
thought of CEM as simply the technology systems used to
manage either customer relationships or network quality.
End-to-End
To date, CEM strategies tend to be point solutions for
Customer specific customer-facing functions, such as customer service,
Experience customer analytics, network QoS or campaign management.
In the industry today, we hear a consistent CEM drumbeat
as service providers struggle to transform their business
CEM and adopt the “customer is king” mantra. Unfortunately,
their solutions usually suffer from one or more of the
following ailments:
• They are too network-centric. A typical occupational
hazard a service provider network team attempts to
transform, network centricity results when teams view
most of the world through the lens of network and QoS
measurements. These are too narrow and capture just one
part of the experience.
• They are too focused on customer relationship
management (CRM) and customer care. Another function-
specific, inside-out view, this attempt to transform
tends to rely on internal measures of quality, such as
average hold time and call abandonment rates. In reality,
however, such measures have nothing to do with the
overall experience; they simply measure service provider
transaction response efficiency.
• They are too service provider-centric. These
measurements see only those attributes controlled directly
by the service provider and do not include third-party
capabilities such as downloads, ring tones, interconnect
handoffs, entertainment content and applications.
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Truly Managing the Customer Experience
No one of these is necessarily bad or wrong. They are merely incomplete initiatives
that still have room for improvement. Exhibit 2 highlights the potential gaps of
common customer experience initiatives that prevent CSPs from truly creating the ideal
customer experience.
Exhibit 2: Many Customer Experience Initiatives, but No Silver Bullet
Source: Yankee Group, 2012
Customer Experience
Goal
Initiative
Net Promoter Score (NPS) Based on a 1-10 scale, NPS divides
Measurement a company’s customers into three
categories. “Promoters” (those who
rank the company 9 or 10) are loyal
enthusiasts who keep buying from a
company and urge their friends to do
the same. “Passives” (7 or 8) are satisfied
but unenthusiastic customers who can
be easily wooed by the competition. And
“detractors” (1-6) are unhappy customers
trapped in a bad relationship.
Big Data As operators move from siloed,
operationally oriented systems to more
integrated, analytical and socially aware
ones, they face challenges related to
customer data. “Big data” is characterized
by increases in data volume, velocity,
variety and variability. To improve
customer engagement, companies will
invest in big data solutions.
Service Quality Management Designed to passively collect data, SQM
(SQM) tools can provide information on network
availability so network managers can
understand and measure quality of service.
The data these probes collect provides
information that is vital to operational
performance. This information lets
network managers make decisions during
a network crisis or failure, and even take
action to prevent a problem. This data also
provides a manager with key information
when it becomes necessary to upgrade or
enhance a network.
Customer Relationship Customer management initiatives are
Management (CRM) absolutely necessary. They aim to give the
operator an operational 360-degree view
of the customer for sales, service
and marketing.
Policy Policy control adds business logic for
how service providers can manage their
services, resources and customers.
Policy is a valuable initiative within
operators for addressing issues such as
fair usage, bandwidth caps, bill shock and
parental controls.
© Copyright 1997-2012, Yankee Group Research, Inc. All rights reserved.
November 2012
Gap
Does not necessarily translate to loyalty.
It is important to understand that
recommend intention alone will not
suffice as a single predictor of customers’
future loyalty behaviors. Use of multiple
strategies instead of a single predictor
model performs significantly better in
predicting customer recommendations
and retention.
Big data initiatives are extremely valuable,
yet complex. The increase in data volumes
poses new architectural and informational
challenges. The technical challenges of
managing, accessing and analyzing real-
time data streams mean that IT teams are
often unable to respond quickly enough
to new market dynamics and improve
customer experiences.
While there are network monitoring
tools and technologies used in service
and network operation centers, many of
these solutions are managed in their own
silo. Operations staff is overloaded by
the amount of data from networks and
equipment, and they have little ability to
understand its impact on the end-to-end
individual subscriber experience. These
initiatives have limited ability to ferret
out and understand the root cause or
dynamically respond to the problem.
CRM initiatives are usually very customer-
care centric, offering a function-specific,
inside-out view. This attempt to transform
tends to rely on internal measures of
quality, such as average hold time and call
abandonment rates. In reality, however,
such measures have nothing to do with
the overall experience; they simply
measure service provider transaction
response efficiency.
The fact that policy is not just in the
network, but also ties to the B/OSS, means
that it falls between different worlds that
are challenging to bridge.
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Truly Managing the Customer Experience November 2012

While industry bodies are in the process of developing the While NPS underscores emotional factors that impact
standards for CEM, quality of experience (QoE) and key customer satisfaction and loyalty, CSPs should incorporate
quality indicators (KQIs), vendors are continuing to create that strategy into a new and innovative indicator that
their own initiatives to provide a way to measure end-to-end correlates the overall acceptability and perception of the
PSPU quality. What is important is to construct a way to find product or service by the end-user. They must generate a
the root cause of a problem and its related impact on end- deeper understanding of subscriber needs through the use
users’ QoE. of end-to-end insight across a combined rich data set that
enables the operator to respond to changing subscriber
End-to-end CEM must not only build upon these practices, usage patterns and preferences. This new CEM initiative
but also extend the insight to become much more must incorporate customer experience index (CEI) modeling
actionable. CSPs must be able to learn from customer with an aggregated PSPU-oriented analysis to ensure quality
expectations and track, monitor and respond to any management aligns to the operator’s business goals.
change. The challenge is to apply this knowledge across
the company to enhance the user experience while still By gathering, enriching and using a complete subscriber
retaining profitability for the operator. profile correlated with network information for both real-
time service delivery and operational business insight, CSPs
can achieve their end goal of not only improving customer
Requirements for Transforming the Experience experience, but also engaging in proactive communication
Operators need to transform from network-centric to user- regarding network quality improvements.
centric management practices. A user-centric approach Having a finger on the pulse of end-users’ perceived QoS
focuses not only on availability, but also on key factors can help operators expedite the process of discovering
such as accessibility, integrity, retainability and ultimately a areas where performance can be improved, and can in turn
customer’s emotional experience. dramatically impact the business across multiple constituents
Tying the emotional experience of the user with QoS is a (see Exhibit 3).
fundamental piece of CEM. The critical factor for a successful
Exhibit 3: Benefits of Understanding End-to-End Customer Experience Across
customer experience is the extent to which the customer’s the Organization
needs are satisfied. Indicators such as NPS, likelihood to Source: Yankee Group, 2012
churn and other loyalty indicators can be a great start.
However, it’s critically important to relate these results to key Network Operations
Customer Care
Executive
Department Management
network events.
•  Understand true •  Respond preemptively •  Reduce time to identify
Customer experience is a direct result of users’ service quality to service issues and address customer
issues
observations, perceptions, thoughts and feelings as they •  Identify capacity •  Prioritize resources
interact with the product, service or company throughout and coverage that impact greatest •  Increase organizational
requirements or most profitable efficiency and cost
an interval of time. Therefore, a complete CEM system subscribers control on services that
drive customer loyalty
must not only capitalize on customer expectations, but also •  Optimize to improve
•  Interact with
service quality
act on any possible changes in behaviors. It is important customers at the •  Develop, test and grow
right time to improve new services targeted
not only to continually measure customers’ perceptions •  Uncover root cause of
subscriber complaints problem resolution and toward high-value
of network improvements but also to ensure customers satisfaction segments

know what the operator is doing to achieve those results.

Recently, a CTO of a major European mobile operator
shared with us his discovery that unless customers are
informed of the efforts taken for QoS improvement, the net
effect on their satisfaction is negligible.

© Copyright 1997-2012, Yankee Group Research, Inc. All rights reserved. Page 4
Truly Managing the Customer Experience
Delivering the Framework for Success
Since many network operations departments still function
using a network-centric performance management approach
rather than understanding the impact of an end-to-end
experience, the overall impact on the customer experience
cannot be determined. Instead, all departments need to
understand the end-user QoE as it relates to a PSPU SQM.
This is the only logical and effective method for investment
and planning in order to raise the overall level of satisfaction.
Understanding the transformation process of truly managing
the customer experience may require guidance from strategic
telecom industry partners such as network equipment
providers, business process consultants and/or telecom
software consultants. These companies provide unique ideas
on how operators can use their existing network assets and
customer information to create a differentiated customer
experience. It is also important to gain insight from partners
that have experience in a multi-vendor environment, since
many operators do not have just one type of network or
software infrastructure investment.
To truly create a differentiated experience across the
customer life cycle, operators must use insight from both
the service and the user to correlate data from the network,
devices and services, to understand, manage and predict
their customers’ expectations.
Innovative Scenarios That Make Consistent Customer
Experience a Reality
Getting more granular with end-to-end measurement of the
customer experience not only assists operations with better
network infrastructure planning, but also helps sales and
service departments in improving operations and enhancing
revenue-generation opportunities.
By extending the focus beyond SQM, CRM and CEM to a
more complete picture, operators can raise the overall
level of satisfaction. Aggregated PSPU SQM can be used
to group users experiencing substandard performance
issues attributed to a common cause, enabling maximum
targeted improvement. By determining how many end-users
are experiencing substandard service and combining that
information with their location, a more cost-efficient and
effective plan can be confidently implemented.
To truly understand actual user experience, quantitative
data findings must integrate subjective inputs such as user
satisfaction surveys or reports from the customer care
center. However, the process should be undergone in stages
(see Exhibit 4).
© Copyright 1997-2012, Yankee Group Research, Inc. All rights reserved.
November 2012
Exhibit 4: Potential Stages of Customer Experience Transformation
Source: Yankee Group, 2012
End-to-End User
Experience Modeling
Customer Care/
Marketing
•  Marketing Analytics
•  QoE
•  Complaint Handling
Network Operations
•  NPS and Customer
•  Quality Monitoring Experience Indicators
•  QoS-KPI and KQI
SQM is the proper way to transition to CEM, because the
network KPIs and KQIs are already operational. This step
provides the strong foundation necessary for a successful
CEM initiative: Having insight into network performance
and service quality leads to a better understanding of the
customer experience. Once that foundation is achieved,
operators can advance by adding measurements that
determine the emotional factors impacting end-users. More
sophisticated modeling at a PSPU level is perfect for other
departments such as customer care and marketing.
The following are examples of how this insight can improve
customer experience.
Proactively Resolve Problems and React at the Right Time
Rapid growth in mobile broadband subscriber numbers and
data volumes has overloaded backhaul links and parts of the
packet core for most CSPs. Also, busy-hour packet loss can be
highly variable between different cells and at different times
of the day, discouraging users and reducing their likelihood of
downloading revenue-generating content. Combined, these
conditions frequently result in subscribers being downgraded
from 4G to 3G or 2G connectivity levels. The result is a
disappointing experience for subscribers, especially if they’re
using smartphone devices touted as high-speed 3G or 4G.
While SQM can help identify and resolve network issues,
without tying that potential service quality to emotional
factors such as NPS and loyalty indicators, operators will
never truly understand the resulting business impact. They
must use the insight to understand who is having a bad
experience and how much effort is required to bring them
satisfaction. Proactive resolutions of customer problems
are essential to avoid a customer complaint call, and
right-timing interactions—such as lowering average handle
time—will ensure customer satisfaction. It is important
to monitor and proactively act before a customer notices
a problem or has the time to complain to a call center to
avoid not only a negative experience, but also increased
costs to the contact center.
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Truly Managing the Customer Experience
Reduce Average Call Handling Time for Customer Service
Representatives (CSRs)
Typical contact center metrics tracked today focus on first
contact resolution (FCR), average hold time and average talk
time. FCR is attracting the most attention among contact
centers and customer care executives today—and with good
reason. Yankee Group estimates that 60-65 percent of calls
are repeat and/or escalated calls that require extensive
rework or time from more expensive technical support
representatives. This not only creates a drain on contact
center time, but it also erodes the subscriber experience and
could lead to churn.
If an issue is escalated to a call center, an operator should
associate subjective QoE and objective KQI to find out if
the specific network problems are affecting customers’
satisfaction and subjective threshold. It is also important
to share the history of the user’s experience with active
guidance for first-line and/or second-line CSRs so that
average handle time can be decreased through improved
diagnosis of customers’ complaints. This ensures the
trouble ticket includes a technically accurate description of
the customer complaint, enabling corrective action by the
appropriate support group, which dramatically improves
FCR rates.
For example, if subscribers experience connectivity problems
and complain they cannot connect to the Internet, CSRs are
fundamentally unable to determine whether the complaint is
true or false. Typically, CSRs will use a trial-and-error script,
probing to understand the problem. This time-consuming
task can be inaccurate and does not reveal the reality of
what the subscriber is experiencing. With visibility into
the experience of each individual subscriber and his or her
accompanying service, CSRs can confirm if subscribers are
generating and receiving browsing traffic. They can have
visibility into both upstream and downstream throughput,
as well as other performance-impacting conditions such
as high packet loss rates and delays. They can also observe
in real time the status of these performance indicators
(e.g., whether they are increasing or decreasing). With such
information at their fingertips, CSRs can focus on solving the
problem instead of struggling to understand it.
© Copyright 1997-2012, Yankee Group Research, Inc. All rights reserved.
November 2012
By proactively identifying user issues, agents can more
accurately and quickly solve subscriber issues, ultimately
lowering the cost to serve. Effectively understanding the end-
to-end service quality issue demarcation covering device,
wireless network, core network, IP backbone, backhaul, user
behavior and even policy control will improve the efficiency
of the complaint-handling process to reduce the operational
workload, improve customer perception and increase ticket
closure rate. Grouping end-users with common problems
highlights service-related issues that are impacting a greater
number of subscribers. This insight can in turn be used to
proactively avoid more customer calls.
Monitor Revenue-Earning Transactions to Ensure Cross-Sell and
Upsell Success
CSPs looking to escape the “dumb pipe” category must
strategically use data from their network. For example,
marketing must be able to quickly and dynamically define
offers, promotions and pricing with intelligence and context
around the customer or customer segment based on
psychographics and demographics, customer lifetime value,
products and services.
CSPs need to guide both the customer using a self-service
channel and the CSR with relevant products and services
based on needs analysis, policy and eligibility rules. Once an
offer is accepted, CSPs must quickly identify relevant and
personalized additional products or services that add value to
the customer.
Marketing departments are struggling with a multitude of
complex issues related to effective tariff plans, creation of
value-added services and overall benchmarking of industry
standards. Specifically, operators need to understand the
emotional aspects coupled with network KQIs before the
creation of dynamic tariff plans so that target customers will
enjoy the personalized price without any bad experiences
(e.g., network congestion, slow data connection), or they
must validate the effectiveness of dynamic traffic (by users’
level traffic analysis).
It is also essential for marketing departments to ensure
proper campaign analysis. These departments need
insight to evaluate not only the effectiveness of marketing
campaigns, but also their impact on service quality and
network resource utilization. Informed recommendations
for campaign adjustments can be made by understanding
end-user behavior before and after the initiation of a
marketing campaign.
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Truly Managing the Customer Experience November 2012

A wealth of subscriber information can be used to understand subscribers’ needs,

interests and behaviors. This not only ensures the delivery of personalized offers, but
also guarantees that the service experience doesn’t negatively affect the brand.

For example, network issues—including SIM card activation bottlenecks, download

purchase failures or poorly performing voice networks—can impede sales and
marketing efforts. Considering SIM card issues usually occur at the beginning of
the relationship, any delays in processing the activation can create a good or bad
impression of the user experience in the crucial first few days.

As 4G and LTE networks mature, over-the-top services such as video and VoLTE impact
network resources. It’s important to correlate precise traffic issues on any particular
service to ensure customer expectations are properly addressed and resourced.
Information could also be used to analyze traffic trends to assist in cooperative
marketing arrangements and/or special pricing to drive adoption of services.

Operators also should design, implement and verify policies to ensure adequate
resource availability for high-value end-users, services or applications based on
mobile broadband capacity assessment and forecasts aligned with the operator’s
business objective.

Supplier Spotlight: Huawei

While there are plenty of IP and circuit switch probe companies, they are not able
to dynamically resolve and meet today’s customers’ needs. In the optimization
space, these companies are missing the key point about the end-user experience
during IP or radio optimizations. Instead of falling into the trap of spending resources
optimizing good user experiences, ICT provider Huawei focuses on improving the
bad ones. In 2012, Huawei made investments in research and development to build
a solution that moves the industry toward end-to-end CEM and enables proactive
prevention. The company believes its radio, IP and B/OSS technologies and strategic
consulting can make it a one-stop shop in the industry to confront customer
experience challenges for operators.

While the KQI model is structured by Telecom Management Forum (TMF) and is a very
broad concept in this industry, Huawei defines KQIs as a way to measure end-to-end
PSPU quality. Furthermore, the KQI is structured to find the root cause and deliver end-
user QoE.

Huawei is redefining SQM from a per-service to a PSPU measurement to truly measure

the customer experience. It is applying its end-user QoE modeling with its aggregated
PSPU SQM (see Exhibit 5 on the next page).

© Copyright 1997-2012, Yankee Group Research, Inc. All rights reserved. Page 7
Truly Managing the Customer Experience November 2012

Exhibit 5: Measuring and Optimizing for Individual Care

Source: Huawei and Yankee Group, 2012

QoE Modeling and PSPU (Per Service Per User) Enable Individual Care

SMS

Users SMS

Per Service Only Shows the Pipe QoS

Users 75.8% 53.7% 90.3%

52137ms 92.1% 11981ms
2.1% 75.8%
98.8% 93.5%
1.1% 7.3%
SMS
0.3% 11801ms
90.3% 70231ms 89.8%

As the industry shifts from network-centricity to service-centricity, many operators

are shifting the focus of their business metrics to enhance the importance of customer
satisfaction and loyalty. Huawei helps CSPs analyze such business metrics as NPS and
Customer Satisfaction Index on an aggregated level and use them to identify customer
experience issues and challenges. Furthermore, Huawei can help integrate these
metrics across the client organization and improve them with a complete set of use
cases across departments and customer experience life cycle phases.

The current SmartCare trials are in the early stages of the service quality discovery
process. This initial phase to collect and analyze network performance data is being
conducted during the next few months. The results should provide the operator with
incremental improvements to its network performance and customer experience.

© Copyright 1997-2012, Yankee Group Research, Inc. All rights reserved. Page 8
Conclusions and Recommendations
It is time for operators to make a radical change from just measuring independent
KPIs to actually understanding and measuring the end-to-end experience with the
end goal of providing proactive prevention. They must focus on understanding the
“real” service experience so they can ensure customer experience transformation. To
succeed, we recommend operators:

• Make sure any partners can work in a multi-vendor, multi-technology

environment. An important component is the need to manage rapidly growing
multi-vendor and multi-technology networks with diverse standards. To manage
complex multi-layered services, partners should have proven experience adapting
to growing and changing network requirements for managing next-generation
networks in combination with legacy systems.

• Look beyond SQM for measuring the experience. While SQM is not currently
considered the leading end-user satisfaction indicator, it still provides value in the
overall assessment process when supplemented by other network, service, device
and user insights. It needs to be modeled to optimize the experience.
• Ensure a PSPU view—it is the only logical and effective method to raise the
overall level-of-satisfaction indicator. While the critical success factor of the
customer experience is the extent to which the customer’s needs are satisfied,
indicators such as NPS, likelihood to churn and other loyalty indicators can be
a great start. However, it’s critically important to relate these results to key
network events.

About the Author

Sheryl Kingstone HEADQUARTERS
Director Corporate
One Liberty Square
Sheryl is the director of Yankee Group’s Enterprise Research group,
6th Floor
with expertise in customer-centric strategies. Kingstone’s research
helps businesses improve sales effectiveness, customer loyalty and
Boston, Massachusetts
acquisition. Specifically, she helps enterprise clients make decisions 617-598-7200 phone
regarding the use of technology, business processes and information 617-598-7400 fax
to boost sales and optimize top-line business performance. She
also assists vendors with custom research projects, messaging and European
positioning, as well as product road map evaluations. Kingstone 30 Artillery Lane
researches and writes on the top trends in marketing and sales London E17LS
effectiveness and customer-centric processes, and evaluates all CRM United Kingdom
application and delivery strategies. 44-20-7426-1050 phone
44-20-7426-1051 fax
© Copyright 2012. Yankee Group Research, Inc. Yankee Group published this content for the sole use of Yankee Group subscribers.
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as of this date and are subject to change without notice.