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Winning the digital wars through a mobile-centric customer experience strategy

(Image credit: Image Credit: Georgejmclittle / Shutterstock)

In the wake of digital disruption, most telecom companies are responding by transforming their business models to become digital services providers (digital telcos) and launching new digital services such as OTT Video, Consumer and Business IoT, Smart Home, Gaming and Digital Advertising. As digital telcos make this shift, they are also becoming tech companies by creating their own product platforms and partner ecosystems. However, in order to win digital wars against tech companies, communications companies will have to build an integrated product and service experience around mobile apps as the hub for their omnichannel strategy.

For most telecom companies, the reality today is far from this goal. On an average, telecom companies have a self-care apps penetration of less than 20 per cent among their customer base. Active self-care users are less than 10 per cent. If you compare that with digital competitors

like Netflix, Amazon, Apple or Facebook, telcos have a long way to go. For telcos to close this gap, they will have to fundamentally change some of the practices that are holding them back from competing effectively with digital native companies. For example, the complexity of monolithic back- office systems (BSS/OSS), complex pricing structures, siloed products purchase and support processes and product-centric infrastructures and operations. The net effect of all these factors is highly complex and inflexible operations, which makes it difficult to deliver a compelling mobile experience.

Mobile should not be considered as a self-service channel but should become the centre of customer engagement, instead of retail or contact centres. 

If a telecom company decides to make a bet on a mobile-centred experience strategy, to execute it successfully, it will require extreme simplicity in operations, products, pricing and back-office systems, along with business agility. However, these will require some bold decisions. Without simple and agile processes, telcos cannot win the digital war against digital native companies because mobile experience influences brand perceptions more than any other channel. As telecom companies strive to become digital telcos, the mobile-first experience must be a critical part of the winning strategy against digital native companies.

Why telcos are losing ground to digital natives

Why are telcos losing ground to digital native companies? It is largely because telcos still operate as product-centred companies while digital natives operate as experience- driven businesses. Digital companies are able to engage customers with hyper-personalisation, capture valuable data, refine models, monetise data through digital advertising and increase their valuation. Telecom companies will have to put the customer at the centre of their business model and operating model if they want to truly understand customer preferences and deliver the amazing experience that will make them loyal customers.

Telcos are also losing ground because of speed. Digital native companies are, by design, agile, nimble and flexible businesses. They have developed a culture that makes their employees willing to experiment, take risks and fail fast. While many telcos are making progress in becoming agile, their culture needs to catch up with their agile transformation processes and technology tools deployed.

Another reason why telecom companies are losing ground to digital native companies is ineffective business model innovation. Telecom companies will only approve initiatives that make sense based on the economics of their legacy business model. The inability to get approval for business cases that will shift the focus from products-centric to customer-centric initiatives means truly transformative initiatives will be a long shot. For example, a leading US telecom company will not approve business cases based on the uplift in Net Promoter Scores (NPS) as a metric for Customer Experience improvement, a proxy for Churn Reduction or Customer Satisfaction. However, the business case will be approved based on cost reduction, positioned as a cost-effective self-service channel. Telcos are addressing these challenges by building new capabilities.

Making the shift to compete as digital telcos

Most telecommunications companies are undergoing digital multi-faceted transformation programs to simplify their operations, products and systems, in their efforts to become a digital telco.

The key pillars of the transformation programs are:

Connected products and Services: In addition to the traditional Voice, Data and Mobile Entertainment services, digital telcos will sell IoT devices such as connected car accessories, wearables, watches, assets, etc. Just as service providers are selling accessories today, we believe that they will be selling and financing many of these devices in the future, which will make the business model look more like digital retailing than telecoms. As a retailer, simplicity, flexibility, and agility will be critical.

Omnichannel customer engagement: Digital consumers will initiate transactions in one channel and complete it in another. It’s important to have customer 360 degrees data management, ML (machine learning) algorithms and conversation artificial intelligence (AI) that personalise all customer engagements to make customer journeys intuitive, contextual and relevant.

Digital operations: Digital operations will be characterised by zero touch business processes. Every order submitted will flow through without human touch. They will use a combination of simplified products and pricing, Robotic Process Automation (RPA) and ML to eliminate human errors, which is the leading cause for order fallouts.

Partner onboarding and Ecosystem: Connecting with partner ecosystems through APIs (application programming interfaces) will be critical for a digital telco. Partner interfaces to product catalogues will be critical in selling IoT devices and monetising partner apps and service.

For ease of integration, digital telcos are modernising monolithic applications by using micro-services and APIs to accelerate partner onboarding and promote agility.

Agility and Agile delivery model: Digital telcos will require quick responses to the market. Getting customer feedback on new products/features, promotional offers through A/B testing and social media sentiment analytics will require organisational agility. Operational and technology delivery flexibility is required to be agile.

Enabling mobile-centred customer experience strategy for a digital telco

To be successful, digital telcos must put customers at the centre of the operations and use the mobile channel as the hub for an omnichannel customer engagement strategy, instead of optimising the current multi-channel strategy, in which the call centre is the hub channel. This will require digital telcos to streamline the operations by eliminating inefficient processes in agent-assisted interactions. For example, billing inquiries generate significant transactions in the

call centre channel, which can be eliminated by simplifying the invoices and making it easy for customers to understand the invoice on the mobile self-care app.

To reimagine and enable the mobile experience transformation, digital telcos need mindset shifts and new capabilities that include the following: 

Personalisation: The days of one-size-fits-all content or experiences are over. Now, all

customers are clamouring for more personalised interactions and services, and mobile devices are the perfect platforms for personalisation. We have seen that companies that have adopted hyper-personalisation have watched their revenues climb two to three times faster compared to organisations that stick with the one-size-fits-all approach.

The solution primarily requires experience design, AI and automation. By combining these capabilities, digital telcos can mine social and transaction data to identify customer preferences, understand service experience, personalise content and use AI-enabled chatbots to deliver integrated purchase experience, tailored equipment upgrades, one-click service change, personalised digital bills, cancel and suspend services and services support.

Providing instantaneous service necessitates that all back-end processes be entirely automated. It requires a complete redesign of workflows supplemented with

capabilities from next-gen catalogues, smart inventory and policy-based orchestration to achieve real-fast and zero-touch service delivery. When any type of failure occurs, the system must be able to restore itself and complete the transaction without any manual intervention.

Value metrics and measurements: Mobile self-service has been a growing customer service trend but it’s not being used as a tool to benefit the customer. It is more of a tool to deflect customers from contacting customer service. Digital telcos should track mobile self- service usage analytics to determine if it’s actually a benefit to customers. For example, digital telcos should take the customer journeys approach to metrics to understand how many times customers are able to complete journeys on mobile devices and which type of customer journeys typically require an agent’s assistance to complete.

Taking the customer perspective for defining metrics instead of the internal view will allow telcos to identify customer friction points to be eliminated. For example, many customers abandon online purchase journeys. Targeting to increase online buying transactions while increasing NPS will be a good approach to customer-value-based metrics design.

Brand awareness: In order to thrive in the mobile-centred world, telcos need to rethink the approach to brand awareness and customer satisfaction. Increasingly, that means integrating the digital marketing strategy into the overall marketing and customer experience strategy by combining mobile apps with in-store interactions and service delivery.

Marketing needs to be integrated with the process of creating and managing accounts, which includes usage checks, bill payments, service upgrades and plan changes. Integrating marketing messages with the customer interaction journeys will create a branded customer experience, generating memorable experiences so that the customer keeps coming back.

A mobile-centred customer experience for digital telcos will not be easy. It will require modernisation of the back-office billing and support systems, rethink of the channel strategy and putting customers in the centre of operations. Telcos that make the bet to transform these capabilities will create branded experiences through mobile devices that will rival the experiences delivered by digital native companies. This experience will reduce customer churn, increase the cross-sell and upsell, which will translate into increased ARPU (average revenue per user).

Olu Adegoke, Partner – Communications, Media and Entertainment, Infosys (opens in new tab)
Image Credit: Georgejmclittle / Shutterstock

Over the past 20 years, Olu has advised senior industry executives in the communications, media, entertainment and high-tech industries on new business launch and digital transformations.