By Bart Delmulle, Tomas Keisers, Rene Langen and Alberto Menegazzi
As telecoms markets mature, the steady stream of new customers slows to a trickle. Fixed-line incumbents continuously fight off attackers who attempt to lure away subscribers with low-cost bundles and new technologies. Mobile operators recall the days of breathtaking growth fueled by hordes of new users clamoring for service. Finding new and more effective ways to attract and retain customers has become the Holy Grail for both fixed and mobile players, but most companies struggle to translate this new focus into an end-to-end approach.
Surveys show that a positive customer experience can significantly increase average revenue per client, since it opens up opportunities for up-/cross-selling. A better customer experience also reduces churn. For example, a leading Western European mobile operator faced the highest churn rates in its market and negative customer perception regarding its network and service quality. After a customer experience transformation, annual churn rates dropped from 31 to 26 percent. And after a retail store improvement program, customer satisfaction rose by 20 percent.
True customer experience excellence entails making the customer pivotal in all activities, enabling telcos to make continuous improvements. Customer experience should, therefore, not be limited to the customer services department, but span the functions of the entire organization and rank high on the CEO agenda.
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McKinsey’s Integrated Customer Experience (ICE) offers an approach to help operators distill actionable customer insights and increase profitability in an environment of slowing growth and increasing price pressure. What sets ICE apart from other techniques is that it builds on a deep foundation of facts and insights about important customer touch points from the customer and operational perspectives.
The customer perspective stems from a granular market survey. This customer experience survey shows how a telco performs in customer experience compared to its direct competitors. In addition, the diagnostic identifies the most critical touch points for a customer based on contact freqency with a particular touch point and the impact the interaction has on the overall customer experience.
Customer satisfaction as a result of these experiences can be mapped, allowing a competitive comparison that reveals which touch points are underperforming and which are “satisfaction spikes” compared with competitors. ICE’s diagnostic component goes one step further. For each touch point, it identifies which have the most impact on satisfaction. The call center, for example, includes experience drivers such as waiting time, staff friendliness, and interactive voice response systems. A “satisfaction cliff” specifies the optimum performance level for each driver.
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Image on homepage – Flickr/neonmushroom