How to Engage with Subscribers to Increase Profitability

Transcription

1 How to Engage with Subscribers to Increase Profitability

2 Summary Catalyst Every interaction between a subscriber and a communications service provider (CSP) presents an opportunity to strengthen the relationship. Consequently, a well-architected subscriber engagement solution is a must-have not a nice-to-have part of the CSP's strategy. When approached correctly, subscriber engagement increases average margin per user by incentivizing usage, growing revenue, creating advocates, and lowering operating expenses, as well as contributing to a positive subscriber experience in real time. Ovum view As CSPs undergo their digital transformations, they need to consider how this will impact their current and future subscriber engagement process. Not only do they need to consider how using digital channels will change their current processes, they need to think about re-architecting them, in a costeffective manner that will deliver greater monetization opportunities and deepen engagements. To achieve efficiency and ensure consistency, the subscriber engagement process must manage multiple digital channels as a single experience; it should be proactive and personalized, and should leverage real-time context in order to deliver value for subscribers at the moment of need. Only then will CSPs enjoy improved customer loyalty and higher profitability. What is the value of real-time engagement to CSPs and subscribers? The emergence of subscriber engagement The subscriber engagement process is the proactive outreach CSPs must use to establish a positive experience with their customer bases. It means using the most appropriate and effective channel(s) to deliver a specific message/experience to a user. Real-time subscriber engagement will help CSPs to gain value from the opportunities as they occur. Effective digital transformations enable faster creation of services and offers, the monetization of data to exploit sales and marketing opportunities, and personalized sales and marketing campaigns. This will allow CSPs to reduce costs relating to subscriber retention and acquisition, but equally it can increase net promoter scores (NPS) and customer satisfaction (CSAT), overall revenues, and revenue and margin per user. While the subscriber engagement program needs to be architected across all channels, as the digital world becomes pervasive, some (digital) channels will be more effective than others. Figure 1, for example, shows that smartphones and smartphone apps lead the way as preferred outreach channels, so CSPs need to consider how they engage with customers online or in apps on smartphones and other smart devices.

3 Figure 1: CSPs' preferred channel for subscriber engagement in the digital world Source: Ovum However, challenges with current marketing systems prevent the implementation of effective subscriber engagement programs. A lack of integrated data, platforms, and channels makes it difficult for CSPs to use the data constructively (i.e., contextually and in a timely manner). Ovum's interviews with 100 CSPs about their digital marketing systems found that lack of personalization in digital communications is a major challenge for two-thirds of the companies interviewed, and the time needed to make data actionable adds to the problems (see Figure 2). CSPs need to address these shortcomings and ensure that the new digital assets they are putting in place do enable collaboration between systems and ease of accessing insightful and actionable data. This requires efficient network components, such as traffic management, network analytics, and policy controls, as well as joined-up multichannel processes and strategies that leverage the full power of the valuable data held throughout the CSP business. Figure 2: Challenges with current digital systems in the marketing department Source: Ovum

4 Leveraging digital channels In terms of overcoming these barriers, CSPs need to undertake a number of measures. As CSPs are seen generally as providing poor QoS (quality of service) and QoE (quality of experience) compared to service providers in other verticals, they do need to concentrate on supporting and improving customer experience (CE), and using retention and loyalty programs to deepen customer relationships and counter the competitive threat from their peers as well as disruptive players such as Google and Amazon. As shown in Figure 3, a number of digital channels can be used for subscriber engagement: SMS, USSD, app push, native apps, hybrid apps, in-browser pop-ups, in-browser push notification, app notifications, and subscriber portals and new channels are always emerging. While some are more effective than others in certain situations, in the digital world, in-browser popups and app notifications are among the most effective means of real-time engagement; browser push notifications will become more significant as native browser support becomes more widespread. Figure 3: Digital channels for subscriber engagement Source: Sandvine CSPs can increase the relevance and value of their engagement over time. For example, initially they can promote a simple task, such as the subscriber responding to an SMS to obtain a one-touch view of their account status or balance, or to confirm other details about their account or their profile. CSPs can then bring in a transaction element, for example, directing customers to a portal or app for topping up or responding to status or usage alerts. Hybrid apps, in particular, have a great deal of promise: they combine dynamic, updateable content with the features and functionality of native apps. Because content is hosted and updated in the cloud, it does not need to be recoded and resubmitted to app stores; this provides a timelier experience for subscribers and greater flexibility for the CSP. Best practices Successful use cases need to deliver one or more of the following features (as shown in Figure 4).

5 Figure 4: Successful engagement criteria Source: Ovum Provide value to the subscriber. CSPs should give their subscribers something in exchange for their time and attention. For example, Tigo SmartApps (Tigo is Millicom's brand in Latin America and Africa) uses hybrid app functionality, as described earlier. Tigo can update SmartApps in near-real time as the in-app interface is directly edited in the cloud. Subscribers see Tigo's brand and messaging in exchange for being able to define the apps included in their personalized SmartApps package. Real-time updates about areas of interest and offers are other key methods to deliver value, and should be closely linked with efforts to personalize the engagement. Be relevant. Relevance is the difference between being annoying and being interesting. CSPs can use information about the subscriber's location and personal circumstances (e.g., birthdays, offers suitable for other family members or related to previous purchases or upcoming events) to push highly relevant and timely information, in real time, i.e., at the point of need. Personalize the engagement. Personalizing the engagement ensures that value is not generic. CSPs can personalize the subscriber engagement by correlating search history, service usage, additional purchases, and personal interests with the favored device or channels of engagement. This can be done according to location, time of day, and business versus social use. In addition, subscribers should be permitted to manage these parameters and channel preferences themselves to ensure the highest degree of personalization in their interactions with CSPs. Preserve balance. The CSP should ensure that it does not use digital engagement channels to overwhelm subscribers with marketing and sales promotions. It also has a duty of care to ensure that subscribers do not unwittingly download malware, access unsafe sites, or violate copyright laws. Ensure transparency. Along with the duty of care to protect from external threats, CSPs must ensure that their one-to-one or "internal" dealings with subscribers are equally ethical, balanced, clear, and informative. If a subscriber is about to use a service and they do not have enough data, the CSP should give the subscriber clear instructions and options if additional costs or new terms and conditions are involved. For example, to proceed they must buy more data (after being provided with

6 the cost options) and know when they will be billed. It must be clear how and where they can obtain help or further information. Figure 5 shows one example of how Telkom South Africa approaches this issue: when a subscriber receives a usage notification, there is a clear path to find more information. Figure 5: Telkom South Africa's Usage Notification app Source: Telkom South Africa Deliver a high-quality experience. CSPs should allow subscribers to manage and control the look and feel of their own services and devices through a branded hybrid app, portal, or website. Figure 6 provides an example of how the Vivo content store can be rendered to deliver a device-appropriate experience. This both improves the usage experience for subscribers and reduces operational expenses for the CSP. Figure 6: The Vivo content store Source: Vivo Conclusion The digital world is central to the business, social, and personal spheres of life. Defining a successful subscriber engagement process that can embed itself into each sphere and enrich the QoS and QoE will be deeply rewarding for subscribers and CSPs. Subscribers gain just enough of what they need so that they can carry on with their day and benefit from appropriate offers and guidance. CSPs can right-size their operational activities by removing extraneous spend, creating

7 targeted opportunities to increase revenue, and enhancing customer loyalty, which together result in a higher average margin per user. Well-architected subscriber engagement is a must-have, not a nice-to-have, part of today's CSP strategies. Appendix Methodology This paper is based on primary and secondary research conducted by Ovum with CSPs and vendors during the course of its investigations on BDA, CX, OSS, and BSS topics. It also draws on Ovum's ICT Enterprise Insights program, an annual survey of more than 6,000 CIOs, including 500 telecoms CIOs. Author Clare McCarthy, Practice Leader, Telecoms Operations and IT clare.mccarthy@ovum.com Ovum Consulting We hope that this analysis will help you make informed and imaginative business decisions. If you have further requirements, Ovum's consulting team may be able to help you. For more information about Ovum's consulting capabilities, please contact us directly at consulting@ovum.com. Copyright notice and disclaimer The contents of this product are protected by international copyright laws, database rights and other intellectual property rights. The owner of these rights is Informa Telecoms and Media Limited, our affiliates or other third party licensors. All product and company names and logos contained within or appearing on this product are the trademarks, service marks or trading names of their respective owners, including Informa Telecoms and Media Limited. This product may not be copied, reproduced, distributed or transmitted in any form or by any means without the prior permission of Informa Telecoms and Media Limited. Whilst reasonable efforts have been made to ensure that the information and content of this product was correct as at the date of first publication, neither Informa Telecoms and Media Limited nor any person engaged or employed by Informa Telecoms and Media Limited accepts any liability for any errors, omissions or other inaccuracies. Readers should independently verify any facts and figures as no liability can be accepted in this regard - readers assume full responsibility and risk accordingly for their use of such information and content. Any views and/or opinions expressed in this product by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Informa Telecoms and Media Limited.

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