Why customer engagement and experience is crucial

Change, competition and commoditisation

Communications and digital service providers now operate in highly complex, dynamic, transparent and competitive markets. A bad experience can prompt a consumer to complain loudly online and switch service providers, sometimes taking other customers with them.

At the same time, connectivity is becoming a commodity: Telcos and cable companies are pursuing increasingly fickle customers that gravitate to whichever operator is offering the best deal on a specific handset or package of services.Comparison sites make it much easier for consumers to find the best deal. This trend is exacerbated by increasing competition from global brands, such as WhatsApp, Skype and Facebook, using the Internet to offer low-cost voice calls, messaging and content.

Deeper relationships and differentiation

If they are to survive and thrive, telcos and cablecos clearly need to differentiate themselves and build deeper relationships with their customers, while continuing to cut costs. That challenge is compounded by the need to engage with customers and potential customers across a profusion of marketing channels and touchpoints, including an array of social media, interactive television and a myriad of mobile devices.

In this complex environment, telcos and cablecos need to find a way to costeffectively engage with customers and potential customers on a one-to-one basis. These interactions also need to generate insights that will yield a competitive edge over rivals. For example, a telco needs to identify the behavioural changes that could have a significant impact on its business. For example, a consumer’s posts on social media or a change in their movement patterns could signal that they are about to change service provider.

As social media plays an increasingly important role in shaping the reputations of brands across the entire economy, companies need to become part of these crucial conversations without being intrusive and irritating.

Predictive, proactive and personalised

The first step is to become better at predicting how consumers will behave. To be proactive, rather than reactive, a service provider needs to be able to combine information about specific individuals with insights generated by observing the behaviour of the demographic group they belong to. Ideally, a telco, for example, should be able to figure out in real-time the demographic profile of a new visitor to its web site, analyse his or her behaviour and then combine those datasets to make the right offer at the right time. That requires a highly flexible and capable ICT infrastructure, in which valuable information isn’t trapped in silos and large volumes of data can be combined and analysed in real-time.

But insight alone isn’t enough. Companies need to find ways to cut through the noise. As producing digital content is relatively inexpensive and relatively fast, consumers face a continuous barrage of information. In such a competitive environment, telcos and cablecos need to engage consumers with relevant and compelling content. Timing will be crucial – messages that arrive even ten minutes late could be irrelevant.

But too much communication will almost certainly alienate consumers. Like a waiter in a Michelin-starred restaurant, a service provider needs to strike the right balance between neglecting customers and being overly attentive.

Moreover, not all consumers are equal. Potential customers that are likely to have a high lifetime value should receive a premium, fast-track service designed to create a compelling first impression. Similarly, high-spending customers ought to be rewarded with meaningful, targeted incentives, rather than run-of-the-mill loyalty points. Giving a consumer an unwanted reward wastes both their time and the company’s resources: Customer understanding and empathy are fast becoming key differentiators.

Mindset and metrics

Parts of the telecoms industry are still bedevilled with an engineering-led or civil service-style culture. In many cases, telco employees need a new mindset and new skills. Customer engagement and experience doesn’t stop at the marketing department. Just about every employee in the company needs to be mindful of the customer’s experience and its importance to the future of the business. Staff need to be empowered and incentivised to put customers first. Each and every element of the organisation from sales to operations to debt collection has to interact with customers in a coherent and relevant manner.

In some cases, a service provider may need to appoint a chief content officer to support the work of the chief marketing officer: A steady stream of fresh, provocative and sophisticated content will be crucial to keep customers engaged between purchases.

Carefully calibrated incentives will help embed the right mindset in the organisation. Telcos and cablecos need to decide what are the key metrics they will use to measure their success in engaging with customers and potential customers. How much importance should they place on their net promoter score, churn, customer lifetime value, their web site conversion rate and “Likes” on Facebook? Beyond the organisational boundaries, CFOs also need to identify the right financial metrics to demonstrate that an unflinching focus on customer engagement and customer experience is yielding a return on investment.

The end-goal: Trust

Communications and digital service providers can, of course, learn from other industries. Leading online retailers, such as Amazon.com, have demonstrated that well-designed and automated distribution and communication channels can lead to both lower operational costs and better customer care. The combination of low prices, broad choice and personalised service has fuelled consistently strong growth in Amazon’s sales and created a formidable global brand.

Crucially, Amazon works tirelessly to win the trust of tens of millions of consumers. Once you have that, customers will open your emails, respond to your messages, visit your stores and spend more money with your company.