Five Ways to Reduce Churn in Telecommunications - SAS Ways to Reduce Churn in Telecommunications ... an organization uses to manage customer interactions across the ... Create a customer-centric culture

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    Five Ways to Reduce Churn in Telecommunications Customer experience management lessons you can apply now from Harvard Business Review

    Right now, customers are experiencing your company. Theyre using your products, your network and your services. Theyre interacting with your company online, on the phone, by email and in person. The question is: Are those experiences forging a bond or driving your customer into the arms of another provider?

    Churn has long been one of the largest issues facing the commu-nications industry. Its a multifaceted challenge, but there is one silver bullet solution: Make your existing customers so happy they never want to leave.

    How? By managing customer experience. Anyone whos left a store after rude and careless treatment or gotten a kind and efficient customer service rep on the other end of the line knows one thing: Customer experience matters. And the companies investing in customer experience management (the processes an organization uses to manage customer interactions across the enterprise) are far outperforming the ones that dont, according to a recent report from Harvard Business Review (HBR).

    The report, Lessons from the Leading Edge of Customer Experience Management, is an in-depth study of more than 400 customer experience management executives worldwide. The results show a distinct divide between the leading companies and the laggards in profitability, revenue, market share and customer retention (see Figure 1).

    But what does this mean for you? How does the communications industry rate in terms of customer experience initiatives? What are the barriers to effective customer experience management, and how is the communications industry faring? How does the industry compare in terms of customer experience infrastructure and the use of data and analytics? And, most importantly, what lessons can you learn and apply now?

    How does the industry rate in terms of customer experience management initiatives?The good news? Communications companies are more advanced in customer experience management than other industries. Half of the communications organizations surveyed feel customer experi-ence provides a competitive advantage and place high strategic value on customer experience (compared to 45 percent in all other industries).

    The not-so-good news is that theres plenty of room for improve-ment in all industries. Across the board, respondents from all industries are still split on funding customer experience programs, and it appears that no industry feels it does well on customer retention.

    What are the barriers to effective customer experience management and how is the communications industry faring?Across all industries, the big barriers to effective customer experience management are:

    Systemsintegration.

    Organizationstructure.

    Multichannelcomplexity.

    Dataissues.

    http://www.sas.com/en_us/whitepapers/hbr-leading-edge-customer-experience-mgmt-107061.htmlhttp://www.sas.com/en_us/whitepapers/hbr-leading-edge-customer-experience-mgmt-107061.html

  • How does the communications industry rank in terms of using data and analytics for customer experience management?Technology use and analytics methods are well established in the communications industry. Maybe its not surprising that the research showed that communications organizations use the widest variety of data sources for customer experience, including: mobile, social, phone transcripts, surveys, focus groups and sales feedback.

    The research also confirmed that the communications industry is ahead of all other industries in analytics use, specifically: predictive analytics, content management systems and marketing operations management.

    So, which best practices will help communications services providers keep customers happy and reduce churn?1. Create a customer-centric cultureAnd the best way to do that is to pay for it. Though only one in four respondents say they connect compensation to customer experi-ence performance, this tactic was rated more effective than any other customer experience management strategy.

    The majority of respondents also view cultivating a customer focusedcultureandmaximizingcustomerexperienceROIaschallenges, and more than half lack the processes to support customer experience programs.

    But in the communications industry, executives generally rate these obstacles as less daunting than other industries and that indicates more mature, more successful programs.

    How does the communications industry compare in terms of customer experience infrastructure?All organizations have reported an increase in the number and variety of data sources used in customer experience management, but communications organizations are further along in estab-lishing effective practices and metrics.

    Specifically,thesefiveadvancedpracticeswereindicatedasbeingmore common in communications than any other industry:

    Developingaformalcustomerexperiencestrategy.

    Sharingcustomerexperiencemetricsamongemployees.

    Creatingaconsistentsetofcustomerexperiencestandardsacross the organization.

    Factoringthecustomerexperienceintohigh-levelbusinessdecisions.

    Emphasizingcollaborationbetweencustomerserviceandmarketing.

    54% 20%54% 29%60% 28%

    LEADING LAGGARD

    60%

    Customer Experience Management: Leading Edge Companies Outperform Laggards

    Lessons from the Leading Edge of Customer Experience Management, a report by Harvard Business Review Analytic Services, 2014.

    Differences are revealed in key business outcomes.

    Sponsored by

    Percentage of respondents receiving benefits:

    PROFITABILITY

    35%

    LEADING LAGGARD

    66%

    CUSTOMER QUALITY

    27%

    LEADING LAGGARD

    REVENUE

    LEADING LAGGARD

    MARKET SHARE

    LEADING LAGGARD

    CUSTOMER RETENTION

    * Leading-edge companies give their organization a top box (8, 9, or 10) rating when asked to rate how forward-looking their organization is in its approach to customer experience management on a 10-point scale, where 1 = not at all forward-looking and 10 = very forward looking. Laggard companies give their organization lowest box (14) ratings when asked to rate how forward-looking their organization is in its approach to customer experience management on a 10-point scale, where 1 = not at all forward-looking and 10 = very forward-looking.

    Figure 1: Customer Experience Management: Leading Edge Companies Outperform Laggards. Differences are revealed in key business outcomes.

    Percentage of respondents receiving benefits:

    Leading-edge companies give their organization a top box (8, 9 or 10) rating when asked to rate how forward-looking their organization is in its approach to customer experience management on a 10-point scale, where 1 = not at all forward-looking and 10 = very forward-looking. Laggard companies give their organization lowest box (14) ratings when asked to rate how forward-looking their organization is in its approach to customer experience management on a 10-point scale, where 1 = not at all forward-looking and 10 = very forward-looking.

  • interviewed by HBR. We had to make it clear that its not another initiative. Its part of what we do. We achieve our sales goals via solid customer experience.

    3. Tame channels and dataSystemsintegration,channelcomplexity,organizationalstructureand data issues all make providing a consistent customer experi-ence challenging for any company. However, leading-edge companies recognize multichannel management as a strategic imperative.

    More than half of leading-edge companies say that multichannel management is extremely important, versus one in five of lagging companies. In addition, leading-edge companies are more likely to embrace new channels such as social media, mobile and video.

    4. Apply analyticsLeading-edge companies are embracing new technologies and processes (see Figure 3), and are more effectively applying analytics to:

    Createorganizationwidecustomerexperiencestandards.

    Analyzecross-organizationalcustomerinsights.

    Mapcustomerinteractionswithintheorganization.

    The leaders also recognize the importance of emerging analytics technologies, including systems that analyze online behavior, social media sentiment and text, as well as tools that can deliver real-time analysis of large data sets.

    Tying compensation to customer experience metrics creates a customer focus from top management down. The results are shared with everyone, and its top of mind for everyone, said one technology company executive.

    Othercustomerexperiencepracticesthatwereratedmosteffec-tive include: sharing customer experience metrics and models with all employees; reviewing customer experience projects and metrics regularly to monitor progress toward business goals; and screening candidates for customer-centric attitudes during the hiring and selection process.

    Despitebeinghighlyrated,thesepracticesarenotalwayscommonly used (see Figure 2).

    2. Give the business control of customer experienceA coordinated approach to customer experience management one that is built from the ground up is more likely to take root. You dont want customer experience to sound like just another corporate initiative, said one customer experience director

    Figure 2: The Most Effective Customer Experience Practices Are Not Necessarily the Most Common

    8 | A HARVARD BUSINESS REVIEW ANALYTIC SERVICES REPORT

    one of the biggest opportunities relates to reward structures. Only one in four (27%) respondents say that they connect formal reward structures to customer experience performance, despite the fact that doing so was rated more effective than any other single customer experience management tactic.

    As with most things, with customer experience management you get what you incentivize. At one tech-nology company, all executive- and corporate- (VP) level pay plans include a portion of variable compen-sation tied to customer satisfaction. It sets the tone, says a company executive. Were all going to be measured on customer success. You cant work in a silo. Thats the case at many leading-edge companies.

    Figure 8

    The Most Effective Customer Experience Practices Are Not Necessarily the Most Common

    Connect corporate rewards to customer experience metrics

    Communicate customer experiences importance to all stakeholders

    Develop customer experience strategy to align with corporate strategy

    Share customer experience metrics with all staff

    Respond to individual customers feedback

    Train new and existing staff in customer experience skills

    53%

    27%

    47%

    69%

    46%

    45%

    52%

    62%

    49%

    39%

    52%

    44%

    Please rate the effectiveness of the practices your organization currently employs to manage the customer experience on a scale from 1 to 10, with 1 meaning not at all effective and 10 meaning extremely effective. [ALL SAYING EXTREMELY EFFECTIVE. TOP BOX SCORES OF 8-10; AMONG THOSE WHO ROUTINELY EMPLOY THE RELEVANT CUSTOMER EXPERIENCE PRACTICES]

    PERCENTAGE EXTREMELY EFFECTIVE PERCENTAGE IN USE

    8 | A HARVARD BUSINESS REVIEW ANALYTIC SERVICES REPORT

    one of the biggest opportunities relates to reward structures. Only one in four (27%) respondents say that they connect formal reward structures to customer experience performance, despite the fact that doing so was rated more effective than any other single customer experience management tactic.

    As with most things, with customer experience management you get what you incentivize. At one tech-nology company, all executive- and corporate- (VP) level pay plans include a portion of variable compen-sation tied to customer satisfaction. It sets the tone, says a company executive. Were all going to be measured on customer success. You cant work in a silo. Thats the case at many leading-edge companies.

    Figure 8

    The Most Effective Customer Experience Practices Are Not Necessarily the Most Common

    Connect corporate rewards to customer experience metrics

    Communicate customer experiences importance to all stakeholders

    Develop customer experience strategy to align with corporate strategy

    Share customer experience metrics with all staff

    Respond to individual customers feedback

    Train new and existing staff in customer experience skills

    53%

    27%

    47%

    69%

    46%

    45%

    52%

    62%

    49%

    39%

    52%

    44%

    Please rate the effectiveness of the practices your organization currently employs to manage the customer experience on a scale from 1 to 10, with 1 meaning not at all effective and 10 meaning extremely effective. [ALL SAYING EXTREMELY EFFECTIVE. TOP BOX SCORES OF 8-10; AMONG THOSE WHO ROUTINELY EMPLOY THE RELEVANT CUSTOMER EXPERIENCE PRACTICES]

    PERCENTAGE EXTREMELY EFFECTIVE PERCENTAGE IN USE

    Please rate the effectiveness of the practices your organization currently employs to manage the customer experience on a scale from 1 to 10, with 1 meaning not at all effective and 10 meaning extremely effective.

    Figure 3: Leading-Edge Companies Are More Effective in Using AnalyticsPlease rate the effectiveness of the practices your organization currently employs to manage the customer experience on a scale from 1 to 10, with 1 meaning not at all effective and 10 meaning extremely effective.

    Its critical that we have data at our fingertips, says another senior vice president. That requires a prop-erly staffed, centralized data decision support function.

    Leading-edge companies also place more importance on a number of technologies for customer expe-rience management, including online surveys, marketing operations management, real-time decision-making tools, social media monitoring software, and content management systems. They recognize the importance of emerging analytics technologies, including systems that analyze online behavior, social media sentiment, and text as well as tools that can deliver real-time analysis of large data sets. Figure 11

    Integrating all the necessary tools is a challenge, but leading-edge companies devote the resources to create a cohesive customer experience ecosystem. One customer experience executive is integrating a number of new tools, including social media sentiment, web monitoring, and analytics, with his companys CRM system to create a complete view of customer experience.

    While there are plenty of tools available to support a solid customer experience management platform, there is no technology panacea. Theres no single system that will give you magical outcomes, says the sales and marketing consultant. Its a matter of taking the time and going the distance building processes with good technology behind themreally understanding the business, really understanding processes and metrics, really understanding the customer.

    That approach is enabling leading-edge companies to overcome the data challenges that can hamper cus-tomer experience management29% said theyve been extremely successful in overcoming data chal-lenges, while another 58% percent said theyve had moderate success.

    Figure 10

    Leading-Edge Companies Are More Effective in Using AnalyticsPlease rate the effectiveness of the practices your organization currently employs to manage the customer experience on a scale from 1 to 10, with 1 meaning not at all eff...

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