The Telco Edge: Maximizing ARPU and Retaining Customers through Improved Experience across the Customer Lifecycle
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1 : Maximizing ARPU and Retaining Customers through Improved Experience across the Customer Lifecycle Telecommunications companies today operate in a hyper-competitive environment. Success means retaining customers and maximising the average revenue per user (ARPU). But maintaining let alone increasing ARPU is increasingly difficult. Multiple factors are converging to put the squeeze on telcos worldwide. The rapid pace of technology change, which provides the opportunity to keep offerings fresh, creates operational challenges. Competition is expanding from new players and even from new sources such as Google and Apple. Increasing commoditization amplifies these challenges. E-commerce is a must-have channel for today s telcos. Given the challenges and competitive climate, however, careful deployment with the right technologies is critical to deliver maximum value. A one-size-fits-all shopping experience will be viewed as one-size-fits-none from the customer perspective and will not foster the customer loyalty that is critical for creating business value. Without a holistic view of the customer relationship across all channels and touch points, you simply cannot offer the right information to the right customer at the right time. Lack of personalisation and customisation capabilities minimizes your ability to offer targeted content and promotions to maximize ARPU and improve customer retention. This white paper examines how telcos can leverage multichannel e-commerce to maximize ARPU and retain customers by providing a true cross-channel experience across the entire telco customer lifecycle. The paper also provides insight into the e-commerce challenges that are unique to the telco industry and offers recommendations for key technology capabilities to consider when evaluating e-commerce solutions. Figure 1: A holistic view of the customer relationship across all channels is critical for maximising ARPU and improving customer retention. 1
2 Customers Demand a Seamless, Multi-Touch-Point Experience The Internet and related technologies are changing the way all companies including telcos do business. Customers have come to expect to be able to interact with companies across a variety of channels. They require choice online, offline, mobile, and other options for every stage in the customer lifecycle. They expect a superior, consistent experience within each touch point. And, increasingly, customers are demanding the ability to easily and seamlessly switch channels, sometimes even mid-transaction. But delivering a truly seamless cross-channel experience can be challenging and many telcos struggle in this regard. How often has a customer received a flyer with a promotion only to be disappointed, and even angered, when the nearest store isn t aware of it and cannot honour the deal? This is not just an e-commerce problem it extends to customer service as well. How many customers are frustrated by an inability of the call centre to resolve a problem that occurred during an online transaction? Or by an inability to help because that s not us, it s our partner? The reality is that the telco customer relationship is complex with many moving parts. The foundation of any successful multichannel strategy is a data model that supports centralised product content management with the ability to publish out to various channels quickly and accurately. This provides the necessary base for an e-commerce and e-service platform that addresses the unique challenges of the telco industry to effectively manage the entire customer lifecycle with the goal to maximise ARPU and lifetime customer value. Figure 2: Customers use many touch points to interact with companies today; telcos must provide a seamless customer experience across all of them. Ericsson centralises product content management with hybris. Has developed a central platform for managing all products and documents Supports 20,000 business users and 300 editors Delivers consistent communications to all partners and customers Integrates with SSO and LDAP for seamless workflow 2
3 Addressing the Unique Complexity of the Telco Industry In order to create business value, e-commerce for the telco industry must meet a specific set of challenges and demands created by an environment of complex relationships and requirements. Telcos must: Maintain complex product and service catalogues. Telco product catalogues are extremely complex. In addition to a wide range of product and service bundles, the near continuous cycle of adding new products and discontinuing old ones creates an enormous management challenge. This is compounded by the variety of sale types which include renewals, upgrades, add-ons, etc. Integrating product information management (PIM) technology is critical to ease the management of these complex product catalogues. Maintain brand consistency across different regions. Providing local products and services across differing languages, currencies, tariff plans, and other regional differences, while preserving global brands and standards, requires careful orchestration. You need to be able to enforce standards while managing regional differences from a single flexible system. Support a multi-touch-point process. Multiple customer touch points require a consistent look and feel across channels such as point of sale, Web, mobile, etc. Even more importantly, however, each point needs to be aware of the others to provide a seamless shopping experience. For example, if a promotion is offered by a service representative over the telephone, there needs to be a record of the details for when the customer goes to the retail store. Create printed materials easily and cost-effectively. Even in today s digital world, there is still a significant In-Store POS need for printed materials such as product catalogues and documentation. Cost-effective production and delivery across multiple channels requires the ability to manage product information and rich media across multiple systems. Support a wide range of complex business models and customer relationships. Even the broadest business-to-consumer (B2C) e-commerce operations must offer a high-quality shopping experience to attract and retain customers. Many of the capabilities required for successful B2C e-commerce are also critical in the business-to-business (B2B) realm but there is additional functionality needed to address specific B2B requirements. Business-to-partner (B2P) offerings, such as white-label e-commerce solutions for business customers, can create significant revenue opportunities but only when they can be quickly and cost-effectively deployed. Delivering advanced functionality for partners, including the ability to independently administer websites, can create a competitive edge. Support a sophisticated and demanding customer base. Whether they are consumers, businesses or partners, today s telco customers are sophisticated and demand a high-quality experience across the entire lifecycle of the relationship. Attracting new customers means delivering a superior shopping experience. Maintaining profitable customers requires superior service while keeping support costs low, which can be accomplished by offering effective self-service support capabilities and integrating customer relationship information across all support channels. In-Store Kiosks Website SMS/MMS & Web Contact Centre Customer Profiles: Segmentations & Personas Business Rules Product Content Figure 3: Multichannel requires a transaction platform that delivers the right content and experience to the right people through the right channel at the right time. 3
4 Managing the Entire Telco Customer Lifecycle Maximising ARPU and retaining customers and gaining other benefits such as reducing costs and securing competitive advantage requires telcos to optimise the value of e-commerce across the entire customer lifecycle. Attract customers with effective and compelling marketing. Integrated online and offline advertising and promotional capabilities, combined with SEO to increase visibility of your online presence, drives traffic and potential customers to your site. Deliver a superior shopping experience to site visitors. Robust search and navigation help visitors easily navigate complex plans and extensive product lines. Personalisation enables you to present relevant and timely content to site visitors to further facilitate the buying process. Ratings and reviews provide peace of mind information to ease decision making and even shorten the sales cycle. Manage sales and fulfilment efficiently. Recommendations provide opportunities for upselling and cross-selling. The ability to support a variety of convenient delivery options such as order online, pick up at the nearest store continues the superior shopping experience. And integration with back-end systems streamlines accurate billing, inventory management, and other back-end operations. Deliver a superior customer care experience. Complete visibility of the customer s history across all channels enables consistent support regardless of channel used. Self-service capabilities enable customers to quickly resolve common issues, freeing support representatives to focus on more complex problems. Manage the contract expiration and renewal process effectively. Timely communications, which are personalised based on history and customer preferences, help decrease churn. SEO advertising promotions renewal search and navigation personalisation ratings and review support plan management billing inventory management delivery up-/cross-selling bundling Figure 4: Maximising ARPU and retaining customers requires telcos to optimise the value of e-commerce across the entire customer lifecycle. 4
5 E-Commerce Technology Considerations for Telcos Increasing ARPU and retaining customers requires a broad range of e-commerce features that not only deliver a high-quality shopping experience but also provide sophisticated marketing and targeting capabilities. At the same time, reducing costs while delivering a superior customer experience is the key to long-term profitability. Deliver a superior experience. Delivering a superior shopping experience requires providing customers with the tools and information they need to research offerings, compare options, and make an informed decision. This includes a broad range of features such as sophisticated search, guided selling, social media, quoting and configuration tools, and cross-channel fulfilment. Manage customer relationships across channels. Managing customer relationships across the entire customer lifecycle from sales to service to renewal requires true multichannel capabilities to maintain consistent branding and content, and to incorporate all channels such as mobile. This requires back-end integration for optimal effectiveness. Optimise cross-selling and up-selling opportunities. Optimising cross-selling and up-selling opportunities uncovers additional revenue potential and can even increase customer loyalty through effective marketing campaigns and targeted offers with well-executed personalisation. Manage complex bundling and fulfilment requirements. Fulfilment can be significantly more complex in telco than in general retail. Solutions are typically a bundled set of products and services. You need to be able to track which combinations are valid. The almost continual cycle of obsolescence creates a breakneck pace of change that compounds the challenge. In some cases, different elements of a single purchase are fulfilled by different partners, creating service challenges in the event of a fulfilment problem. You need the agility to be able to reconfigure bundles quickly and easily and to manage complex fulfilment across channels and partners. Reduce support costs while improving service. Reducing costs while delivering a superior customer experience maximises profitability. Automating service capabilities for example through self-service support and rules-based tracking and updating for equipment returns and repair can reduce support costs and increase customer retention rates to improve the overall lifetime value of customers. Streamline operations. Streamlining the ability to support multiple sites, brands, catalogues, currencies, languages, local conditions, etc. reduces operational costs. This requires a system that offers centralised management of product information content with support for regional conditions, currencies and taxes, as well as easy integration with back-end systems. Reduce the cost of printed materials. Integrating print capabilities to reduce the cost of producing and distributing materials across channels requires the ability to source content from multiple systems with product data rights management. Reduce reliance on IT. Reducing reliance on IT without sacrificing agility to respond to changing conditions can help control overhead costs. This requires an intuitive user interface so business users can maintain content and manage workflows as well as a flexible infrastructure for rapid deployment and on-going adaptability. Brightpoint easily supports hundreds of partners with white-label online stores. Has developed a central platform for managing 250 white-label stores Publishes multi-supplier catalogues and enables complex bundling and sales of accessories Can easily roll out new stores as needed with different catalogues and functionality hybris has proved that their e-commerce software is made for efficiently managing multiple online stores and tenants. For us, it was very easy to roll out many international white-label stores on their platform. Despite minimised hardware expenses, each store has great flexibility and comprehensive catalogue and e-commerce functions. Jac Currie, chief information officer at Brightpoint 5
6 Conclusion The telecommunications industry is evolving more rapidly than ever across technology, competitive, business model, and regulatory dimensions. E-commerce can no longer be just a bolt-on solution for enabling an online sales channel this approach creates an ill-afforded weak link in a hyper-competitive market. The right multichannel commerce system can, in fact, be a transformative platform that delivers the capabilities required to address the unique challenges of the industry with the flexibility to quickly adapt in the rapidly evolving competitive landscape for customer retention and maximum ARPU. An effective multichannel e-commerce solution must enable telcos to: Introduce new products including plans, devices, and services and drive up-sell, cross-sell, and renewals through e-commerce transactions Decrease churn by presenting relevant and customised content Reduce operational costs by automating processes, reducing time to market, and supporting self-service Improve organisational business processes by streamlining product information and content management Integrate with back-end systems to support fully automated end-to-end processes across the entire customer lifecycle By adopting the right platform, you can not only provide a rich e-commerce experience, but you can create a compelling and lasting competitive advantage over the long term to maximise ARPU, improve customer retention, and increase profitability. About hybris, an SAP Company hybris helps businesses around the globe sell more goods, services and digital content through everytouchpoint, channel and device. hybris delivers OmniCommerce : state-of-the-art master data management for commerce and unified commerce processes that give a business a single view of its customers, products and orders, and its customers a single view of the business. hybris' omni-channel software is built on a single platform, based on open standards, that is agile to support limitless innovation, efficient to drive the best TCO, and scalable and extensible to be the last commerce platform companies will ever need. Both principal industry analyst firms rank hybris as a leader and list its commerce platform among the top two or three in the market. The same software is available on-premise, on-demand and managed hosted, giving merchants of all sizes maximum flexibility. Over 500 companies have chosen hybris, including global B2B sites W.W.Grainger, Rexel, General Electric, Thomson Reuters and 3M as well as consumer brands Toys R Us, Metro, Bridgestone, Levi's, Nikon, Galeries Lafayette, Migros, Nespresso and Lufthansa. hybris is the future of commerce. sales@hybris.com Version: October 2013 Subject to change without prior notice hybris hybris is a trademark of the hybris Group. Other brand names are trademarks and registered trademarks of the respective companies. 6
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