Customer Relationship Management – The New Differentiating Tool for Communication Service Providers

1. Introduction

The 1990s will be remembered as a key inflection point in the communications industry. During this time, communication service providers spent billions of dollars on hardware, software, and network build-out. They focused on building out the back office, or Operational Support Systems (OSS), network management systems and billing.

At the same time, the undergoing deregulation in the communications industry led to increase in competition and that of the consumer’s power with a reduction in exit barriers and an overall slowdown in volume growth.

While on the one hand the absolute number of service providers increased, on the other hand, deregulation and technology evolution led to a blurring in the distinctions between services offered by various companies. So we had cable companies entering the local telephony market and wireless companies offering domestic / international long distance voice & data services. All this meant an increase in competition as felt by the incumbent players. The mere offering of specific products / services could no longer be a differentiator and the resultant price wars soon reduced the industry to a commodity status.

In addition, the advent of internet technology enabled rapid dissemination of information and in most cases the consumer was only a click away from the competition. Number portability along with a reduction in one-time registration charges ensured that not only did the consumer have the power of information with him / her, but also, he / she could exercise that power and switch carriers as and when needed.

If all this was not enough, at least in the developed countries the market for traditional wireline voice services, which were the mainstay for most incumbent players, showed first signs of slowdown and eventual decline. Volume growth by adding new subscribers could no longer be the strategy of choice for these service providers.

The impact of this increase in competition, growth in consumer power and reduction in volume growth has been acutely felt by the telecom service providers who saw a decline in profitability and erosion of margins / cash flow. And so, building truly "Loyal" customers is fast becoming the pressing requirement in the industry.
Welcome to the world of Customer Relationship Management (CRM) - the age where the customer, has truly become the king.

If managing customers is critical then what is it that customers really want? Actually fairly simple things like -
* Friendly interface that is easy to do business with - the travel industry has known it for decades
* Unified experience irrespective of whom they deal with - the retail industry knows there is nothing like an online customer and an offline customer; they are one and the same
* Personalised experience - the age of mass marketing is coming to a close
* Uniquely tailored and on-demand services - If Toyota can give you a car customized to your choice when you want, surely telcos should do better

While what customers eventually want is so simple and very much available in other industries, the reality is that service providers are confused.

For the communication industry has long been a regulated industry and service providers have grown into complex organizations with equally complex technologies having little customer focus!

Organizations are often split by network technologies and different departments have their own systems and databases which store bits and pieces of customer information in a fragmented manner thus losing an overall understanding of the customer. Most operate with a matrix of applications, across and within channels and product lines that result in silos of customer information. It is not uncommon for large service providers to have hundreds of customer-serving applications that cross:
* Functions (marketing, sales, service)
* Customer segments (consumers, small business, large business)
* Product lines (wireline, mobile, Internet, satellite, cable)
* Channels (call centre, direct sales, Web, direct marketing, partners)
thus creating an incomplete view of their customers. As a result the customer has a truly fragmented experience across different touch points leading to dissatisfaction and a great propensity to defect.

In addition, the silo based approach to customer data precludes useful predictive analysis about the customer, such as who the customer is what products and services is he / she buying and what the customer might purchase in the future and when would he / she be most likely to defect, thus reducing effectiveness of cross-sell / up-sell efforts as also of the associated marketing campaigns.

To add to these, different activities involved in a customer facing process for example in order entry, involve manual interfaces and deal with often old and unreliable databases. This increases process delay and reduces flexibility besides adding to scope for errors. For example, customer service is particularly challenging and solving a simple service problem, may involve multiple call centres, agents, and applications. Eventually service providers suffer from loss in customer satisfaction and often a loss in revenue.

Last but not the least, process ownership is difficult in such an environment since most processes span multiple departments and therefore lack overall owners / champions. The question of therefore looking at service ordering or request resolution process from the customer point of view and improving the same over time becomes indeed difficult for the service providers.

2. The advent of CRM

The advent of CRM software was billed as the “great leap forward” for the front office. CRM was designed to break down the silos of customer information to improve sales, service, and marketing efforts.

The vision for CRM during this time period was that it would provide a single view of the customer across the enterprise and would enable consistent customer interactions. CRM strategies were focused on consolidating interactions and breaking down the barriers that existed between the silos. They were focused on giving the employee the front-office tools to solve a customer problem right the first time, regardless of how the customer interacted with the service provider, be it via the call centre, the Web, a salesperson, or a partner. CRM was focused on providing the right person with the right information at the right time.

Potential benefits from CRM were meant to accrue to all the key stakeholders – the employees, the partners, the customers and thus to the company itself.

CRM has the potential to transform and improve day-to-day operations of employees by standardizing the processes in marketing, sales and service, reducing transaction times, delays and errors and thus improving efficiency.

Not just the employees but also the partners who provide marketing, sales and service support could now have real-time integrated view into relevant customer information from the company thus seamlessly integrating their workflows and reducing associated delays and errors with eventual increase in profitability.

Customers, the target for CRM investments, would benefit from gaining a consistent and personalized experience across multiple channels thus improving overall satisfaction levels. In addition, web and IVR enabled self-service models, appropriately backed by agents would provide 24x7 interaction opportunities to the customers.

All these were meant to have a positive impact on customer satisfaction, reduce churn and increase ARPU by enhancing effective cross-sell / up-sell while at the same time reduce cost errors and delays through automation in processes.

However, while the incremental benefits that service providers are achieving with CRM are impressive, many of them are falling short of realizing the complete vision of CRM that will allow them to increase market share and retain their most profitable customers. The reality is that many service providers approached CRM from a technology perspective, without fully understanding CRM strategy.
What many of these implementations lacked was a CRM strategy that encompassed multiple channels, business process transformation, application integration, and change management— all driven and sponsored by the highest levels of executive management.
CRM software was often implemented in a silo of one channel or one customer segment and with minimal integration to other applications. Other implementations merely automated existing business processes, without truly redefining the way the company did business.

Integrated service providers of the future have the opportunity to refocus CRM investments to truly transform their businesses into profitable, more customer-centric enterprises. The macro-level business challenges that face them in the future are not significantly different than those that they deal with today: retaining profitable customers and reducing operating costs. However, the business environment that these companies operate in is already beginning to shift and will play a strategic role in shaping the future of CRM implementations.

3. The Way Forward in CRM Implementation

Any attempt at achieving the CRM vision must necessarily start with seeking to understand the customer better. This understanding should be used to design personalized service experience and the same should be consistent across various channels. The next step would be to use that understanding to design newer product / service bundles uniquely tailored to the needs of small customer segments.

Seeking to understand the customer
A holistic view of the customer is important to achieving customer intimacy which will be an important differentiator of the future.
Many service providers failed to achieve this because of lack of CRM vision, inability to integrate multiple applications, silo based decision-making, and other implementation issues. With these lessons learned, future CRM implementations are better positioned to realize this complete view of the customer across all points of interaction. Also, through advancements in the technology supporting CRM applications service providers will be better positioned to tie together multiple applications into a single customer-facing system. Data residing in legacy applications will be shared across the enterprise in a seamless manner. For example, data entered in the process of setting up a customer account will be shared with the billing system, ERP, and the credit system.
As an instance, Life Time Customer Value is playing an important role in how service providers treat their customers. But Life Time Customer Value cannot be calculated from a single data source, it needs integration across different data sources backed by a superior predictive logic.
In summary, service providers would have integrated customer intelligence available to them to determine which customers are profitable, how to market to their customers, which products to develop, and how to better serve their customers.

Use this understanding to unify, personalize and differentiate customer experience management
Seeking to understand the customer is not enough. It is important to deploy this information across all touch points to:
* Firstly unify the customer experience across all touch points across different channels
* Next, personalize service and customer experience for each customer
* Finally, differentiate customer experience to reflect customer loyalty and life time value

There lies the need to go beyond both operational reporting and business intelligence since both of these concern the past and are often meant for middle and senior level management. What is now needed is information available for use in the present to the people who actually interface with the customers. By integrating systems, data can now become readily available to all users—call center agents, sales managers, service representatives, and partners—minimizing the need to navigate to multiple applications and increasing customer insight in real time. This should translate to better, faster and more personalized customer service as users are better equipped with the information necessary to respond to customer needs. Differentiating customer experience based on loyalty, life time value etc. could be a strong complement to existing point based loyalty systems in giving customers that special “delight” experience and reducing churn.

Design product / service bundles uniquely meant for these customer segments
Customers, particularly those that drive value, expect to receive more personalized service. In the long run, they also expect to be offered products and services that are more closely aligned with their needs. Just as the era of mass marketing is drawing to a close so is the era of universally designed products / services.
While providing individual products / services has ceased to be a differentiator and prices are down to commodity levels, the way in which these products / services are bundled together and offered to the customer is fast becoming the new differentiator for communication service providers.
With detailed insight into their customers, service providers can do smaller and thus more accurate segmentation and identify customer needs, wants, and value. They have the tools now to design marketing campaigns that target a segment as small as 1 customer so as to greatly improve the success ratio. They have the means to design bundled products, service offerings, pricing plans and other attributes uniquely tailored to the needs of these small segments. These would not only reduce the cost of marketing campaigns / offers but also make it very difficult for competition to imitate product / service offerings since these would now be tailored to the needs of almost every individual.

Bundle communication with content to elevate value for the customers

The next step would be develop insight into other life aspects of the customers and use the same to bundle extremely relevant content into these existing product / service bundles thus repositioning the utility of the communication service providers in the life of the customer. These steps would have significant impact on customer loyalty and increase average revenue per user (ARPU) — thus leading to increased profits.

In summary, with a holistic customer view, service providers can enhance their customer segmentation to incorporate customer needs as well as the value of the customer. Through this enhanced segmentation they can better align limited resources (based on customer value) to the marketing, sales, and service efforts and to those activities that are most meaningful to the customer. This approach supported by relevant technology is what would help service providers achieve true CRM vision and lasting benefits.

4. About Wipro

Wipro has made significant investments in the telecommunications industry and today 38% of Wipro revenues are derived from the telecom sector. Over 8 of 10 major telecom equipment vendors as well as telecom service providers are our current customers. We help service providers to maximize ROI across all components of their OSS & BSS to improve profitability and lower operational expenses.

Wipro's full range of Business Support Systems (BSS) and Operations Support Systems (OSS) solutions and best in class products through alliances address the specific needs of Wireline, Wireless Cable, ISP/ASP and IDC companies. Wipro provides the full life cycle of services for effective CRM implementation starting for necessary business process modelling, requirements definition, solution and data model design, product evaluation and fitment analysis, implementation, integration, training, handoff and support. Our extensive experience across Application Integration, Business Intelligence, Data Warehousing and Web enabling complements our CRM services to deliver next generation CRM solutions to service providers.
Wipro has developed significant experience and made significant investments building Wipro’s in-house knowledge in CRM, Customer care and Billing (BSS) solutions. Our relationships with industry leaders including Siebel, Amdocs (Clarify), SAP, PeopleSoft (Vantive) and Oracle puts us in a vantage position to deliver the CRM vision articulated earlier. For additional details kindly refer