Part 2 - Customer Experience Management (CEM) or how to manage Telco Customers at 360 degree with analytic and big data

Today in most part of the world, mobile devices are reached the full penetration of the population. The mobile expansion era is ending; Telecommunication are becoming a mature market, where maintaining customers and increasing their expenditure is a mandatory strategy for any Telco CEO. 

In a mature market, indeed, the strategy of continuous growth by acquiring new customers is expensive: advertising costs, campaign management expenses, discounting, and equipment subsidies are extremely costly. Acquiring a new customer costs 5-8 times more than maintaining an existing one. On the contrary, account maintenance costs decline over the lifetime of the relationship and long term customers tend to be less inclined to switch, less price sensitive and are more likely to buy ancillary products. So one of the pillar of any Telco strategy must be the increase of customer loyalty.

But Customer loyalty doesn't means only good services; it implies all the aspects of the interaction between subscribers and operators during the whole customer life-cycle: from promotion of new services and tariff plans to the use of self-care web site, from the interaction with the Customer Care to the billing and charging, and obviously the quality of the service perceived. This means that the increase of customer loyalty is not a simple task or an activity owned or demanded to a single department (f.e. Network). It is a more complex activity which involves the whole company. It is a new way to re-think Telecommunication operators around their most valuable asset: their customers.

All the activities targeting the increase of the customer loyalty are grouped under the name of Customer Experience Management (CEM).

CEM is an operative model that Operators have to adopt to be more efficient in preserving and increasing their customer base. It is a shift from Network and IT-centric operational model (OSS and BSS) to a new Customer-centric model, where all company functions are focused in maintaining and acquiring customers. Service providers that will be able to measure and manage the Customer experience will be the most successful.

Unfortunately for Operators, Customer Experience is an extremely complex task to monitor and manage, as it is influenced by many and diverse factors, factors that can happen on different channels and that depends by individual characteristics (f.e. the same event can be perceived differently by two or more users).

Consequentially, to manage the Customer Experience to elements play a crucial role:

• The collection and the analysis of any customer-operator interactions, to transform them in an appropriate measure (QOE KPI). These values are used to monitor to the quality of the user interaction for each subscriber and for each interaction and channel
•  Combine all customer-operator interactions into analytic models which provide a comprehensive and global picture of the subscriber experience (Loyalty score). These value are used to monitor and predict the churn propensity of each subscriber. Analytic models are used also to identify the best or more efficient action to avoid to lose subscribers with high churn propensity score.

In summary, if service providers want to realize strong customer relationships, they must be extremely focused on data management and analytic. In the figure below is shown the overall CEM life cycle.

Figure 1 – Customer Experience Management life cycle

As discussed before, Customer Experience Management isn't a single process but a combination of processes, so to fully implement CEM, all operator-subscriber interaction processes should be transformed in data and analytic driven.

In the table below are shown the key processes and related analytic cases needed to implement a CEM-based company: