Consolidation among communications service providers (CSPs) has been on the upswing for years. And, with a convergence-friendly regulatory climate now in place in the U.S., mergers and acquisitions (M&As) could shift into overdrive.
There are many compelling reasons why CSPs are chomping at the bit to combine forces. Subscriber and revenue growth, cost savings, and access to new technology for rolling out emerging Internet of Things (IoT) and 5G wireless services top the list. Other motivations include broadening geographical distribution (e.g., Charter Communications’ merger with Time Warner Cable), market expansion (AT&T and DirecTV), content access (AT&T and Time Warner), and boosting mobile advertising (Verizon, scooping up AOL and Yahoo).
Moreover, through consolidation, CSPs can lower customer acquisition costs, improve retention rates, and increase average revenue per user (APRU). All worthy goals. But to achieve them, CSPs must go the extra mile to stay connected to the needs of subscribers, even as their companies expand. The kicker? It’s hard enough for them to do that already, and consolidation only makes it harder. Here are four ways CSPs can bake customer centricity into their consolidation strategy.
Make customer experience a top priority
Back in the day when CSPs had few competitors, they could take their subscribers for granted. And most did. That’s no longer a viable tactic. Thanks to cord-cutting options and disruptive newcomers like Google and Facebook, CSPs are seeing their subscribers—and their revenues—fleeing by the millions. And yet, despite efforts in recent years to improve services, telecoms, mobile carriers, cable operators, and internet service providers still occupy some of the lowest rungs in the latest industry comparison surveys, such as net promoter scores (NPS).
One of the best ways CSPs can boost customer satisfaction is by establishing formal customer experience (CX) programs. A holistic approach that encompasses the entirety of a customer’s history with a company over time, CX orchestrates all customer-related activities across all functional areas and lines of business. CX is the difference between noting that a customer service issue was resolved (something most operators already do) and capturing that a customer is still unhappy that there was a problem in the first place (something almost none of them track).
To provide consistently rewarding customer experiences, CSPs will need to overcome the dysfunction stemming from their historically fragmented processes and departmental silos, layers of complexity that greatly increase with M&A activity, by the way. They must also overhaul their creaky legacy operations and business systems, collectively known as OSS/BSS. Augmented with cloud-based options, these tired solutions can deliver the real-time digital agility CSPs need to respond smartly to subscriber demands.
Use data to serve customers, not just bill
CSPs have more data about their customers than practically any other industry. But so far, most have used that data for only narrow, blatantly self-serving purposes, such as documenting data consumption for billing or creating more targeted mobile ads. And yet hidden within that data are insights into customer behavior, preferences, and opinions that reveal how subscribers feel about a provider overall.
For example, with cognitive analytics, like those from IBM Watson, providers can predict which customers are likely to churn and take proactive steps to retain them. Data analytics can also detect which services give subscribers the most trouble, or which subscribers would be most receptive to upsells—handy information to have when you’re expanding offerings through consolidation.
The problem is, many providers can’t gain those insights because subscriber data is buried in separate systems for CRM, billing, accounting, and provisioning, among others. Again, cloud-based platforms can help them bridge information silos. With that data, they can deepen customer connections and increase retention by offering more intuitive services, surgically targeted incentives, and delight-inducing rewards based on customer usage history.
Expand customer self-service
Many of today’s subscribers are not just digitally savvy, they’re also more technically capable. Above all, they’re impatient. They want to explore service options, place orders, renew, and have everything fulfilled instantaneously, using any device or channel. Ideally with minimal clicks or agent intervention. CSPs have been slow to deploy self-service options that are on par with digital trendsetters like Amazon or eBay.
Self-service becomes even more critical as CSPs ramp up deployment of new smart home, connected car, mobile video, and augmented reality services that M&A deals make possible. These new services, along with new devices, product bundles, and pricing plans that accompany them, can be very confusing for subscribers. CSPs can help them navigate new offers and increase conversions by deploying brainier chatbots, richer online FAQs, and interactive guides that truly empower subscribers to get answers, resolve problems, and complete transactions without assistance.
Make customer service more personal
Establishing truly personal connections goes a long way to keeping customers loyal when competitors start waving the latest race-to-the-bottom pricing deal or multi-play bundle. Indeed, according to a 2016 Accenture report, 75% of consumers are more likely to buy from companies that know them by name, make recommendations based on past purchases, or know their purchase history.
Personalization becomes even more essential with consolidation, because customers can often feel overlooked or ignored as providers gain new subscribers and capabilities.
Technology now makes it possible for CSPs to bring old-school personal service to every subscriber interaction and touch point. For example, emails and chat sessions can be pre-populated with personal greetings. Newer omnichannel contact center solutions can capture all information on first contact, so subscribers never have to repeat themselves from one agent to the next. And a subscriber’s social communications can be merged with CRM and contact center solutions so nothing falls through the cracks.
It’s all about the customer
All indications are that M&A activity is here to stay. Comms are banking on consolidation as they jockey for best position in pricing, packaging, bandwidth, coverage, and content deals. The specifics may change, but those battles will continue. When all is said and done, however, the CSPs that will consistently grow their subscriber bases and revenue streams are those who ensure that their customers always come first, no matter how often they merge, how much technology morphs, or which disruptions come down the pike next.
About the Author:
Brendan O'Brien is chief innovation officer and co-founder at Aria Systems, a leading cloud-billing provider. In 2002, he introduced the world to cloud billing and innovated database-driven, enterprise-grade web applications before the concept of “cloud” was on the horizon and is among the industry's foremost thinkers on IoT and recurring revenue.
Photo by Jose Luis Pelaez Inc./Getty Images
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