Boosting value across the customer lifecycle

Patrick Kelly/Analysys Mason
27 Nov 2013

Developed and emerging markets in APAC are increasingly focusing on the customer experience.

Operators in both markets must adopt a strategy to focus on extending the customer lifecycle and creating a positive experience to differentiate themselves from other operators that are focused on price, device offering and network coverage. Operators need to put more attention on their processes and measure the interactions in each stage of the customer lifecycle to keep customers longer and sell more products and services with the overall goal of improving profitability.

Our research shows that operators will spend between 12% and 20% of revenue in the first year on customer acquisition costs, which includes marketing, selling, onboarding and equipment subsidies. With such high cost in the first year, how do operators measure and mange their operational activities against the perceptions of how their performing by their customers?

Most operators have a plan to improve customer experience, a commitment to raise NPS scores, and try to understand the needs of their customers by surveying their customer base frequently. However, customer churn reported by operators in their financial statements every quarter have not improved. In fact, for some operators it is increasing. Mobile churn rates in Europe have not improved for the past three years, according to our analysis.

Many factors contribute to churn. Price, device availability, network quality of service, customer support and bill shock are some of the obvious factors. To improve customer retention rates, operators must be capable of managing it. The starting point is to look at each customer touch-point in the lifecycle and evaluate where the greatest improvements can be made in the short term that raises NPS.

The challenge with assessing the customer's perception is that it is formed from many different interactions with the provider and often times the opinion formed may not be consistently measured across the entire customer base.

Quality of service must be evaluated against the technology and the services consumed by the user. It is this area that the operator should be able to raise NPS scores, improve customer satisfaction and lower churn because surveys show that poor QoS accounts for a high degree of churn. One area that we have seen creative solutions is the ability for the operator to correlate high-value subscribers and access points on the radio network. By looking at the clustering of high-value subscribers and their frequent access points, CSPs can make strategic decisions on which parts of the RAN should be upgraded to improve broadband access and avoid congestion. This simple technique has a positive impact on reducing churn in the subscriber base that contributes higher profit margins.

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