Globys: Customer lifecycle management -- why telcos aren’t so great at it (and how to get started)

It’s fairly common wisdom that telecom service providers need to get better at customer lifecycle management, the idea of actively managing relationships with customers in a more active and ongoing fashion. Other industries have made a science of managing their customers, while telecom, so often caught up with a technology-first approach to business, has lagged.

The question, perhaps, is where to start to make things better. Telcos acquire an can possibly process so much customer data, with so many ways of slicing and dicing it, that at least part of the problem may lie in taking the first steps.

Lara Albert, senior director of global marketing at “customer experience” solution vendor Globys puts it this way: “If you were teaching an infant to walk you wouldn’t set it on its feet, give it gentle push and then come back in a year’s time to see how it was getting on. That seems to be how telcos treat their customers. They put the energy in at the beginning of a contract and again just before the point of renewal. They need to get better at looking at customers over their entire lifecycle.”

That is fine, but finding the balance is tough – you can’t interfere with your customers – or the baby – too much, they will get annoyed and start throwing their toys out of their stroller (into which they have somehow managed to climb for the sake of this metaphor).

However, there are simple, logical things you can do to get started. Nowadays, the triggers tend to be calendar-based – end of contract, billing date and account balance. “We can quite easily move into the next phase – with a prepaid customer, for instance, you know when his peak usage is, what his average level of top up is, whether he has had a new device recently, whether he uses his phone internationally. All of this is useful in understanding the customer better and moves quickly towards contextual marketing, understanding when, where and how customers use their devices.”

There are already examples of carriers using network data, and even basic customer data such as age, date of birth and address is useful if it is cross referenced with demographic data based on house prices and income in the area. The next stage is predictive modeling and if you can get this enriched data directly to the marketing team, then the combination is even more powerful.

“The possibilities are huge and the barriers might look daunting but aren’t,” says Albert. “With the advent of ‘machine learning’ and predictive modeling, marketers can test hundreds of ‘treatments’ as we call them. At the moment, they can test maybe three or four. Not only can they understand what works and what does not they can begin to understand why. For example, they might come up with data that shows that an incentive to renew or top up was not necessary as the customer would have done that anyway.”

Once the data is put to work, telcos can become more proactive. In recent conversations with carrier customers, Globys found that most admitted that they were reactive rather than proactive when it came to addressing their customers.

“As an example, some telcos will find that data churn is a problem. Sometimes between 60 and 90 days after a data bundle is taken up there will be a drop off. This is normally an education issue and the customers are not able to make the most of the data functionality in the device. All they see is the extra cost and they turn off the data. It is simple enough to engage customers and offer them some tips or a tutorial or some other form of education to show them the value.”

In an industry where the focus is on driving up ARPU and driving down cost to serve, lifecycle management and retention is the fulcrum that balances these two forces. By engaging continually with the customer the telco is in a better position to retain him.

As Albert says “customers of an airline, for instance, want to be loyal. They want to be able to book a ticket and be looked after by one carrier. They know the benefits but both parties have to work at it. The same is true of any industry. Telco is no different and we need to understand that this lifecycle management piece is a key part of the competitive world we live in. But, like the baby, it is a case of learning to walk before you can run.”