Customer Experience Management (CEM) can be a powerful shield for telcos to defend their position against nimble Over-The-Top (OTT) players, as well as a source of differentiation when competing with other operators.

Pioneering Operators Reaped Return
A lot of best practices can be borrowed from other sectors such as airlines and banking. Role models are also available within the telco sector. Sprint, Hong Kong Telecom and Telstra Australia have achieved great success through their customer experience transformation.

• Sprint turned around from the edge of bankruptcy by focusing on their customers basic needs – identified through customer experience journey mapping.
• Hong Kong Telecom’s share price has doubled in the last three years, by delivering best-in-class service to high value segments, directed by its Customer Experience Steering Committee.
• Telstra reported investment of AUD200m in customer advocacy programs and a return of AUD800m in its 2013 financial report.

   

  Industry Forum driving CEM Maturity
  The Telecom Management Forum’s CEM Maturity Model is a good starting point to baseline customer experience management practices, as well to develop a transformation roadmap. The model described typical stages of maturity and introduces dimensions including vision, strategy, metrics, process, organization, and systems. Interestingly, a telco may be quite mature in one aspect while not so sophisticated in another.

• Through a maturity assessment exercise in 2012, Hong Kong Telecom found itself very mature in CE vision and culture, but less mature in systems. Its internal system development capacity was not sufficient to support their new CE initiatives, or processes. Huawei was engaged in a project to empower the Level 2 Customer Service Managers to resolve usage disputes faster, rather than diverting the request to the backend billing organization. Now the two parties have started to work on new use cases, such as service assurance for MVNOs, and detecting users who perform speed tests with mobile apps so as to proactively manage word-of-mouth.
• In other cases, a telco may have deployed a probe solution, but that does not necessarily mean user-centric service operations have been established. Many probes have been deployed purely for monitoring and troubleshooting network issues. Many telcos are not able to troubleshoot a service level issue by correlating data from multiple probed interfaces. While enterprise customers expect reports on how their staff and business are impacted, many telcos simply reports aggregated usage and network-centric KPIs. To help operators to clearly understand where they stand, Huawei has developed a detailed set of questions based on the TM Forum maturity model. The company is also collaborating with industry players to define CEM Metrics to measure customer experience across multiple touch-points, including retail outlets, web portal, customer service, and operations.

   

  Capturing Revenue with Experience Differentiation
  At the core of CEM, the goal is to create a meaningful and differentiated experience that closely aligns with the brand promise. However, few respondents said that their organization has a clear customer experience strategy, according to a Europe Communication survey in 2Q2013.

  Credit should be given to a challenger Axis, in Indonesia, who successfully leveraged experience design to gain a 23% growth in 2013, in a highly competitive and crowded market with 10 operators. The Axis marketing organization positioned its brand personality as “Smart” and “Fun”. All its marketing campaigns as well as customer services reinforced the message that customers made a “smart” choice. To deliver a fun experience, Axis staff would recommend the use of cartoon figure names to prepaid users who are not willing to fill in the personal detail sign-up form. Amused customers turned out to be very willing to provide complete personal information, which further helped up-selling of family bundles. “Smart” and “Fun” are two brand attributes that are well recognized by customers, according to Forrester Research.

  Shanghai Unicom set forward to capture the enterprise segment by boosting customer confidence in the acquisition process. To achieve their goal, in 3Q2012, they introduced customer experience metrics into their organizational performance appraisals, in order to drive mindset changes. Following that consulting phase, a new Service Operation Center (SOC) was established with a new team to undertake the task of service assurance together with NOC. A dashboard was designed to monitor important customers, and assure important areas. Many visitors, including their prospective enterprise customers, were impressed by its SOC, and became more willing to sign up.

  User-centric Service Operations helps Shanghai Unicom to better serve mass market segment as well. When WeChat server outage was detected by its SOC in August 2013, Shanghai Unicom proactively informed subscribers, and avoided flooding of customer inquiries. In comparison, another telco’s call center was overwhelmed due to lack of service level visibility.

  Develop Customer Loyalty by Leveraging Experience Data
  Net Prompter Score gained more adoption in 2013. According to the European Communications’ (eurocomms.com) survey in 2Q2013, 29% of the 100+ respondents selected Net Promoter Score (NPS) as the most important metric, trailing Customer Satisfaction (CSAT) which was selected by 39% of respondents.

  The adoption of NPS brings in a perspective on the longer term relationship between the customer and provider, as well as revealing the emotional aspect of the attitude towards the provider. However, it should be emphasized that NPS is the outcome of customer centricity, and provides limited information in diagnosing root causes. Telcos have unique access to a lot of data related to customer feedback, for example, customer requests made at retail outlets, customer comments on social media, and customer calls to the hotline. These data provide vital insight into what the customers want. Passive probes also provide insight into the customer experience of the usage of telecommunication services.

  The following figure illustrates the % of customers whose feedback can be collected by the different techniques. Using probes, with subjective and objective association analytics, the experience of potentially 100% of the customers can be measured. This will include dissatisfied customers, referred to as Very Annoyed Person(VAP), whose issues should be resolved proactively.

   

   

  

  Figure 1: Percentage of customers whose experience is collected.

   

   

  Leveraging data from passive probes, an operator in Turkey launched a campaign to compensate users who suffered with voice call drops. Compensation was used to buy time, while optimization was carried out for areas with a high density of Very Annoyed Persons, i.e. suffering users. The budget for the program was borrowed from 1/10 of the budget allocated for advertisement. It turned out that the investment brought back a great return. Net Promoter Score improved by 8 points.

  Summary
  There is no better time to transform towards customer centricity. A few operators have achieved great success. This article shares Huawei’s experience of collaborating with pioneering operators in their CEM transformation. The TM Forum has created a good foundation for operators to assess their CEM maturity and develop a transformation roadmap. Experience must be designed in order to capture new revenue from new segments. NPS is the outcome of customer centricity, but provides limited information to diagnose root causes. Telcos should leverage the data available in operations to measure customer experience and foster loyalty.

  — Clarence Luo, Director, Transformation Practice, Huawei CEM Service Solution, with Jonathan Hopkinson and Trevor Cheung