With the tremendous changes and customer volatility in the telecommunication market, customer retention becomes an even greater concern for ISPs/CSPs and Telcos. Customer churn continues to keep C-level executives awake at night. Churn not only erodes profits and reputation, it can also put the entire business in precarious danger. To increase their customer base, operators need to aggressively acquire new customers, but also work to keep existing customers happy for retention.
As you know, it’s far less expensive for Telco operators to retain existing customers than acquire new ones. But how much? According to research, acquiring new customers can be up to five times more expensive than maintaining your existing customer base. In a study by Frederick Reichheld for Bain & Company found that a 5% or more increase in the retention rate can lead to a 25% or more increase in profits.
Increasing Need for Better Quality of Experience (QoE) in Retention
Successful customer retention requires knowledge, interaction and management. First, CSPs need to know who’s likely to leave. Second, they need to identify their most valuable customers. Third, deciding where to focus retention efforts. The prime goals is to catch the most valuable customers, before they leave.
Telcos need to be more proactive in customer retention. By reducing the number of customers lost by as little as 5%, profitability jumps by 25% to 125%. In addition, for every 2% increase in retention, CSPs reduce operational costs by about 10%.
Why such a jump in profitability? It’s due to the added value from retention – loyal customers. Loyal customers are more involved customers. They are the heart of thriving businesses, not only in spirit, but in sales for higher ARPU. Loyalty leads to upselling with 90% more new sales than customers who feel disengaged with your company or dissatisfied with your services. In addition, a loyal customer usually is willing to spend more than 60% on a single transaction than new or disgruntled customers, guaranteeing a unit profitability 23% higher than the average customer.
The Art of Customer Retention
In the shifting world of ISPs/CSps, speed is no longer enough. As we move forward with more devices, apps and IOTs in the home, the importance of QoE rises for consumers. In today’s busy digital marketplace, savvy consumers are always checking out the alternatives. They shop around to get the best deals easily and quickly. Therefore, it’s hard to maintain brand loyalty with more churn as revenues from renewals becomes increasingly harder to achieve. QoE is a key added value today for consumers.
To stop churn, QoE can be a strong differentiator for operators – whether in the sales process or the retention stage. With premium QoE, CSPs connect better with customers for higher retention rates. The best relationships are built on deep knowledge, mutual support and understanding.
Meeting New Consumer Challenges with Application Intelligence
There are two emerging challenges with new use cases of the Connected Home.
First, the Connected Home experience is greatly affected by the plethora of connected applications like gaming, streaming, video conferencing and more. The applications are sensitive to the home environment and specific connectivity conditions. It’s a new support issue for ISP Care teams. They need to understand what’s happening in a customer’s home and how to help.
How can ISPs know what apps are being used in the home?
Care teams require relevant and timely data to provide real time-response. Poor response to customer care needs is a prime factor in customer retention. Today’s customer doesn’t want to wade through a confusing knowledge base, converse with a bot, or interact with poorly trained call center employee.
With Application Intelligence solutions like Veego, ISPs automatically detect of QoE issues, and their root-cause (in/out home), shortening support calls and improving first-call resolution. They also deliver quick problem reports, analyses, and actionable insights for problem resolution to Tier 1-3 customer care.
At the heart of the Veego Application Intelligence technology are five unique leading-edge components – App. ID, QoE Scoring, Root-Cause Analysis, Recommendations, and Resolutions. Together they form a powerful tool that governs the contextual awareness – Veego’s secret-sauce for generating unmatched insights.
How can ISPs be more proactive to retain more customers?
The second challenge is providing a window into the home about churning customers before it’s too late. With the increase in home activity, understanding more about QoE and being proactive in customer care becomes more important. Proactive engagement with subscribers provides operators a sea of insightful data that they can use to halt churn. For example, data analytics can provide information on a poor customer-product fit.
With Application Intelligence, ISPs get new essential information to predict the customer’s churn risk within a certain timeframe, acting even before the customer threatens to leave. This new approach to QoE automatically identifies subscribers’ pains and needs. It enables profiling and segmentation of the subscriber base by trends, events, geography and more, creating groups of likely buyers for dedicated “churn-busting” campaigns.
It’s essential for ISPs to upgrade their Customer Care with Application Intelligence for a premium QoE to reduce churn and facilitate troubleshooting with new visibility and troubleshooting tools. Ideally, weaving the reactive, real-time needs of customer care units and proactive, near real-time requirements of marketing together is a good investment. Veego does this.
Retaining Customers with a Great CX
Reducing churn is key to sustaining long-term growth for telecommunication companies and service providers. Operators will need to embrace the new age data-driven approach to effectively identify potential customer issues for prevention and use KPIs to track the best way to rectify them. With business intelligence powered by Application Intelligence solutions like Veego’s analytics, operators, marketing teams and research departments can make data-driven decisions to better optimize the business process.