Telecommunications companies, also known as telcos or telecoms, have a problem: Customer loyalty. Or rather, lack of loyalty. In a 2022 report on customer churn in telecoms(1) close to half the respondents reported canceling their service in the past year—a rate at least twice as high as other industries and 22% higher than telcos’ score pre-pandemic.
What’s driving the disconnect? Mainly, dissatisfaction with the quality of service (QoS). For telco customers, QoS includes such issues as unorganized customer interaction data, lack of reference points, complicated IVR, too many transfers and too much repeating of information between agents and channels.
This comes at a time when customers expect the same simple, fast omnichannel service that Amazon, Uber and other digital natives are known for. With high-speed 5G soon to be everywhere, telco customer expectations will only increase. Without corrective action, dissatisfaction may well keep soaring too.
To add to the challenges, telcos have another problem: lack of market differentiation. Customers often see no compelling reason to stick with a particular brand, so they’re ready to jump ship after one bad experience and hop aboard somewhere else. Once customers have churned, it is extremely difficult, and expensive, to bring them back.
Experts say telcos can turn back churn before it happens by adopting a proactive, personalized CX strategy, fueled by granular customer data and driven by predictive analytics. Here are some key steps and how a successful transformation would work.
The first step is to build a robust data repository by collecting data from previous interactions through email, social media, chat, text, phone and CRM systems. McKinsey suggests including detailed demographic data and historical information such as browsing, purchases, roaming, and mobile app usage for a rich, in-depth picture(2).
Employ AI-powered data management platforms (DMPs) and advanced analytics (AA) to gain insights on customer pain points and needs. Natural Language Processing (NLP) tools can discern sentiment and intention from text messages. Customer churn prediction platforms can predict churn probability, helping to find patterns in existing data that are associated with the predicted churn rate.
By using both historical and near real-time data, telcos can create predictive models to analyze characteristics and identify predictors of the existing audience. This information provides businesses with actionable intelligence to improve customer retention and profit margins.
Empowered with new knowledge and insights, agents at call centers are better able to anticipate the subject of a call and be ready with a relevant, helpful response. They can predict which customers may be ready to churn and when, reaching out with an incentive to stay, such as an upgrade, to turn a potentially negative encounter into a positive one.
Implementing new tools, platforms and methodologies will amount to a major change for many telecoms, and any major change carries risk. Data migrations must be secure. AI and AA platforms must integrate seamlessly with disparate, third-party and legacy systems. Technical glitches can depress customer satisfaction and make churn even worse. The solution? End-to-end software development testing before launch is telcos’ surest safeguard.
In recent research conducted by Gartner(3), proactive telco customer service resulted in a full percentage point lift in net promoter, customer satisfaction, customer effort and value enhancement scores—all indicators of what a proactive approach can do to reduce churn and boost retention.
Beyond churn, leveraging customer patterns and pain points through AI & analytics creates opportunities to deliver new value at every stage of the customer life cycle, from acquisition through renewal. Upgrades, special offers and personally targeted messaging show customers they are appreciated, differentiating a brand and inspiring long-term loyalty. These are precious commodities for any business, and welcome wins for telcos.
Along with elevating CX and reducing churn, AI, ML, NLP and predictive analytics can be optimized with automation to boost operational efficiency, enable smart scheduling, and implement “self-healing” networks. As the world’s leading AI-driven engineering company, Qualitest has the tools, tech and skilled, deployable staff to deliver the telecom development testing services you need.
Resources
1.“State of Customer Churn in Telecom 2022,” Tech-See
2. ”Winning in Telecom CX,” McKinsey & Co.
3. “Drive Customer Loyalty and Retention through Service,” Gartner
