CUSTOMER EXPERIENCE INDEX: CREATING CUSTOMER- CENTRIC CSPs

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1 analysysmason.com RESEARCH STRATEGY REPORT CUSTOMER EXPERIENCE INDEX: CREATING CUSTOMER- CENTRIC CSPs JUSTIN VAN DER LANDE and ANIL RAO

2 About this report This report analyses how customer experience index (CEI) solutions are used to create customer-centric communications service providers (CSPs). It covers what CEI solutions are, which vendors provide them and examples of CSPs that have implemented them. The report also provides recommendations for vendors that provide customer experience management (CEM) and CEI solutions and services, and CSPs that are considering implementing them. It is based on several sources, including our work with CEI vendors, and direct and web-based research with CSPs. VENDORS COVERED Amdocs Ericsson Huawei IBM Nokia Networks China Unicom SK Telecom CASE STUDIES KEY QUESTIONS ANSWERED IN THIS REPORT What is a CEI and what KPIs should be used to create it? How does a CEI work with CEM, service management, customer care and other systems that interact with subscribers? Which vendors or professional service providers offer CEI solutions to the telecoms market? Why is a CEI needed to support a customer-experience-driven CSP? What, if any, pre-requisites are needed to deploy a CEI solution? Is the time right to start using a CEI? WHO SHOULD READ THIS REPORT This report is primarily aimed at vendors of CEM and CEI solutions and services. It provides an analysis CEI solutions in terms of their benefits for CSPs and the potential market for vendors. It provides vendor profiles that include an assessment of their offerings and a summary of their customers. The report helps vendor product managers to improve their understanding of the market and the competition that they need to address. It provides CSPs with an assessment of CEI solutions and their maturity. 2

3 CONTENTS EXECUTIVE SUMMARY CEI DEFINITION AND CONSTRUCTION VENDOR SOLUTIONS AND APPROACHES CPS USING CEI ABOUT THE AUTHORS AND ANALYSYS MASON 3

4 Executive summary The creation of an effective customer experience index (CEI) enables a CSP to manage customer experience by directly linking multiple systems and processes to each subscriber s experience. CSPs are then able to make informed decisions about systems, resources and partnerships, and their impact on customer experience. Figure 1: Customer experience index solutions can provide communications service providers with several benefits Customer experience is becoming a critical factor for CSPs. In the past, they have relied on Net Promoter Score (NPS) survey results to assess customer satisfaction, but these give only partial and delayed information. CEI scores are a synthetic measure of customer experience that use CSP data. CEI data provides a direct link between customer experience and the CSP s systems and resources. CSPs can use this framework to improve customer experiences. CSPs should start creating CEIs, focusing on areas for which they already have data and that most affect customer experiences. This can be refined with supplementary data at a later date. Vendors must target specific areas of customer interaction and points of influence, but must have the ability to use new data attributes as they become available. The use of machine learning will dynamically assess which data is significant. Manage customer experience to boost revenue Guide investment in the business Customer experience index (CEI) Provide an advantage over competitors Reduce churn Source: Analysys Mason 4

5 CSPs are pushing vendors for solutions so that they can differentiate themselves from their competitors by improving customer experience Many CSPs claim that it is their goal to become a customercentric organisation. However, it is difficult to determine which projects, processes or systems have the most impact. NPSs provide CSPs with survey-based customer feedback. These measurements can be used to sample customer interactions, which can then lead to: changes in systems and processes that will improve the customer experience and increase revenue improved operational efficiency and churn reduction. However, NPS surveys approaches are flawed: they are retrospective they cover only some subscribers, not all surveys are not practical to take all the time. CSPs are pushing vendors for solutions that enable them to model all subscribers and use this information to change operational processes dynamically. Implementing CEI solutions across the complete subscriber lifecycle will affect all customer-facing systems and will be a significant challenge for vendors to integrate data sources and provide timely analysis of the potentially large volumes of data. Figure 2: A CEI provides a consolidated data index for optimising established processes and assessing the potential benefits of diverse projects. Customer Customer care processes Service assurance processes Network optimisation processes Retention and churn management Marketing campaigns and offer creation Customer interaction KPIs are consolidated in a CEI Customer experience index (CEI) A CEI is used to optimise each customerfacing system to improve overall customer experience Source: Analysys Mason 5

6 This report looks at what CEI is, how it is implemented and which CSPs are using it to improve their customer experience CEI provides CSPs with a consolidated view in real-time of what each subscriber s experience is at anytime. This enables CSPs to pin-point what systems or processes need to be changed to prevent or reduce a poor customer experience. CSPs can address the shortcomings of NPS survey-based customer feedback by creating a dynamically updated CEI for individual subscribers. The underlying systems that provide the KPIs for the modelling of the CEI enable an automated optimisation of processes to be implemented for each associated system. The report is divided into three sections. The first provides information on what a CEI is and the typical KPIs that are used to the create the index. The second section looks at CEI solution providers and provides some analysis of the different approaches that they take. The final section has some examples of CSPs that have implemented CEI solutions and the details of the uses case that they are supporting. Figure 3: A CEI uses data and modelling techniques to provide a continuous view of customer experience NPS surveys capture data retrospectively at a single point in time, whereas CEIs continuously measure each subscriber s service throughout their lifecycle Evaluate Join On-board Support Renew CEI Modelling based on KPI weighting, data consolidation and creation of KPIs NPS survey NPS survey Sources of CEI data Network Customer Operational Social 6

7 Recommendations 1 CSPs should create a CEI to provide a real-time view of each customer s experience by taking a few KPIs initially and then add greater sophistication at a later date. CSPs need an enterprise-wide measurement of individual customer experience. It is unlikely that data points from all aspects of a customer lifecycle can be incorporated into the index for all subscribers initially. CSPs should start with a limited aspect of a customer lifecycle or a subset of subscribers and then add further data points and add more complexity later once the initial model is proven to be working. 2 Vendors need to develop a more productised approach to CEI, to drive its adoption. Relying on heavy professional services will slow take-up, and add risk and cost to CEI projects. Specialist CEI vendors provide the most efficient method of creating and deploying CEI solutions, for vendors to be successful in deploying CEI, they need to reduce the complexity of its deployment. The development of applications that encapsulate the skills and knowledge needed for a successful implementation will increase the likelihood that CSPs will purchase and be able to successfully deploy a CEI solution. 3 Vendors should integrate CEI into as many processes and systems as possible to extract its value for CSPs. A CEI solution on its own does not provide business value, but it can be applied to a number of processes to add value for CSPs. The most common uses are for identifying subscribers who look likely to churn and those who seem to be satisfied or not. However, CEI results could also be used as top-level service assurance dashboards, or as a criteria for where network investments should be made or which project to invest in. 7

8 CONTENTS EXECUTIVE SUMMARY CEI DEFINITION AND CONSTRUCTION VENDOR SOLUTIONS AND APPROACHES CSPs USING CEI ABOUT THE AUTHORS AND ANALYSYS MASON 26

9 About the authors Justin van der Lande (Principal Analyst) leads the Analytics Software Strategies, Customer Experience Management Software Strategies and CSP IT Strategies research programmes, which are part of Analysys Mason s Telecoms Software research stream. He specialises in business intelligence and analytics tools, the functionality of which cuts across all of the research programmes in this area. He also provides project management for large-scale projects within our Telecoms Software research. Justin has more than 20 years experience in the communications industry in software development, marketing and research. He has held senior positions at NCR/AT&T, Micromuse (IBM), Granite Systems (Telcordia) and at the TM Forum. Anil Rao (Senior Analyst) is a member of Analysys Mason s Telecoms Software research team and is the lead analyst for the Service Assurance programme, focusing on producing market share, forecast and research collateral for the programme. He has published research on IP probes, real-time network analytics and the importance of service assurance in reducing churn and improving customer experience. He holds a BEng in Computer Science from the University of Mysore and an MBA from Lancaster University Management School, UK. 27

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