Customer retention a pressing issue for service providers

As mobile and wireline providers encroach on one another’s landscapes, some believe certain strategic initiatives will become more important than ever to help retain customers. Recent studies have only added urgency to this idea.

For example, the U.S. multichannel market delivered its worst performance on record in the second quarter of this year, losing 216,000 customers compared to a 378,000 gain in the same period last year, according to recent SNL Kagan numbers.

Also, operators in cable and telco did not rank very high in the 2010 CxPi (Forrester Customer Experience Rankings), which list 133 organizations across 14 industries in three areas: meeting needs, being easy to work with and enjoyability.

Though T-Mobile, AT&T, and Verizon ranked higher than MSOs, it was really other verticals that prevailed, including airlines, banks, credit card providers, hotels, ISPs, PC-makers, retailers and utilities.

These are not rankings communications service providers are ignoring. 

“We see strategic initiatives from cable and telecom operators around customer experience, network excellence and operational efficiency as they try to combat churn in pay TV and wireless services,” said Tom Erskine, director of industry solutions, communications and utilities for Pegasystems, which offers customer relationship management, business process automation and business process management solutions for the likes of Vodafone, Sky and Orange, as well as implementations for Tier 1 cable and wireless providers in the U.S.

“The cablecos want network excellence so they build out capacity and speed for more HD and 3D programming; with mobile, they look at 4G as a priority for network excellence and the handset for building loyalty to services on that handset; legacy wireline companies are focusing on the business customer and delivering service excellence to the enterprise; and then all are looking at how to be more efficient through automation of processes to boost ARPU,” Erskine said.

On the latter point, being able to spend less to retain the customer is the goal. “You can see someone like Orange realizing huge savings on operating margins because they spend less to retain the customer; there is less revenue dilution when you can do more than just constantly lower price plans to retain customers,” Erskine said, noting that the availability of customer information is the key. 

Whether through self service or agent channels, customer experience will improve as it moves from data-centric to customer-centric models. “The average [service rep] desktop is populated with 40 or 50 pieces of data about customers at the time they are servicing the customer,” Erskine said, explaining that that makes it difficult to deliver a good customer experience without substantial training of agents. “Rather, you want a process- and intent-driven approach where information is delivered according to what the customer wants and intelligence about what that customer may be receptive to in terms of upsell and cross-sell,” he said. 

Instead of grappling with dozens of data fields, reps should get to a point where they rely on scripts that grasp the intent of the customer interaction and deliver only information that is needed, so that they can focus on the customers’ needs rather than struggling to piece together far-flung pieces of data on a screen.

Through the evolution in decision trees and rules execution, the quality and consistency of care can improve. “You can have a situation where every rep is a 'best rep' regardless of whether he or she has been their two months or two years,” Erskine said.

In all, Erskine believes that as customer experience becomes more of a priority, it will improve in all areas — including service delivery, customer service and more customer-centric strategies that help retain customers.