Home References Why Customer Segmentation is an Important Business Tool for Operators

Over several decades telecom companies around the world are striving to become as customer-centric as they can be. Not just trying to sell their products; the owners are also fostering a long-term relationship with the customers, interacting with them regularly and understanding their experience gained from using their products, to serve them better.

 Customer Experience Management

Customer Experience Management (CEM) is looking at what customers gain in every part of their relationship with the business. Surveys, feedbacks and other forms of evaluating the aspects of advertising, sales process, support, etc. via online and offline medium. CEM has become a top priority in almost all the industries now, especially in the face of intense competition. It refers to the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy.

 CEM in Telecom:

CEM was founded on the concept of Customer Relationship Management (CRM) to drive better decision-making in telecom companies. The operators focus on the subscriber experience or the ‘interface’ of business relationships. They are now trying to perceive as what a user perceives of their services to evaluate and amend the changes in the system. Not only this, but taking note of what user is experiencing they are able to prompt the right product offer to them in the right time. Techniques and tools employed by operators in CEM is helping them to reduce churn, increase customer retention, loyalty and advocacy, increase usage and ARPU, thereby significantly improving profitability.

 Importance of CEM:

  • Drives customer loyalty and improves customer retention.
  • Increases customer referral rates.
  • Increases customer satisfaction
  • Reduces customer churn
  • Opens up new avenues of opportunities to innovate.
  • Creates a competitive advantage and differentiation

Top trends in CEM:

The competition is investing heavily in customer experience. Reports claim that CEM will be worth $8.39 billion by 2019 and the challenge remains to intelligently prioritize the investments. So, as the competition shifts to provide personalized solutions, the standardized services for the market will be diminished.

Employee experience is equally important as customer experience. There is no doubt that a strong connection exists between employee engagement and customer experience. The operators need to put correct employee engagement measures in place so that they can deliver what their brand promises

Customer Experience Design is gaining traction. The process of designing these experiences requires identifying and closing experience gaps to truly innovate and be able to bring the customer’s expectations into their services and experiences derived from them.

Demand for Personalized and Customized Experiences is on an all-time high. In this age of smart, connected users, personalization is the key to service offering. As more and more players get better in truly understanding their users, the more the demand will be for customization in products and services and it will be one of the hardest thing for the competitors to copy.

The role of emotions in Customer Experience is critical: In it’s truest sense, customer experience is what the customers think and feel. These emotional triggers are vital to dive customer loyalty. So it is indispensable to consider customer sentiments in framing customer experience efforts.

New- age CEM techniques:

  • Marketing automation:This ease down the manual process of collecting and dissecting the marketing data to point out automatically those customers who are in need of assistance or correspondence. Further this system automatically responds to them in a prompt manner with the correct information making use of the channels pre-specified. Automation has become a key ingredient in an integrated customer experience management.
  • Behavioral customer segmentation:In order to provide a personalized experience to users, data is analyzed deeply to correlate the behavioral aspects with the demographics to create meaningful experience and personalized communication to customers every time they interact with the business in any form. It refines the business functions, builds engagement and loyalty. Companies are now stimulating conversations about topics that are personal to customers, to get to know them better and build long-term brand trust.
  • Customer journey maps:These help understand where the customers and potential customers first come into contact with the business and map out their journey thereon. This helps in looking how, where and when customers can be acquired, services and retained. It also helps business to understand loopholes due to which users tend to leave.
  • Query resolution and escalation management:By this it’s easier to know what query and problem the customer is facing and who can be escalated into the matter. This ensures a consistent and timely response to customer queries and complaints. It even helps to identify and eliminate the hurdles in customer experience management.
  • CX software: This system when combined with actionable plans drives more business and new opportunities. It provides a foundation for research and insight into the customer usage trends to serve them better in future. It makes use of the data collected from customer feedbacks, redressal systems, customer support data and other means of communication.

In this blog, our focus will be on the role of customer segmentation in CEM in telecom.

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Customer Segmentation

Customer segmentation entails separating the target audience into sets of similar interest groups on the basis of a marketing or demographics perspective including gender, buying behavior, usage pattern, age-group, special interests and lot more. Two core aims of segmentation are:

  1. To design the right experience-focused value proposition:Companies can tailor-made services and products around each segment and design a fully experience based value offering to serve each of the target group. Like many telecom operators divide customers into high- priority global segments like ‘young, active, fun’ users- offering them services like games and music streaming, live cricket updates, etc. and ‘occasional’ users- offering them an uncomplicated and straightforward mobile experience.
  2. To deliver value to the customer:Companies focus in entirety to offer nothing less of the value proposition that their customers deserve. They emphasize on cross- functional collaboration like marketing and supply chain departments working in line across the whole customer experience. Both departments know and deliver a consistent value proposition together with their overlapping supportive strategies.

CEM and Customer Segmentation in Telecom Industry

In general, customer segmentation allows the companies to target specific groups of customers effectively when they are served as per their taste and preferences. In telecom, segmenting the mass market target audience into similar interests is essential to service and support the subscriber. Customers tend to choose the medium of purchase and subscribe to the services as per their comfort and accessibility.

Some subscribers choose to purchase services online and initiate the relationship on their own. Some customers choose to enquire services at a store and then make an informed decision. Some may even choose to shift to your product after getting influenced by peers and online reviews. Consequently, the way subscribers choose to resolve their complaints and queries also vary from online forums to chat representatives, to calling customer service to visiting store to directly taking up the matter on social media.

The differentiation may also lie in the way and the platform used to consume the content. Given the size of audience operators serve, right segmentation for right customer experience can be done on the following segmentation basis:

  1. Customer Value Segmentation:This segmentation basis focuses on identifying the contribution that a customer makes to the overall organizational profitability based on current relationships with the organization. The standard approach used in this is ‘decile analysis’ to calculate value.
  2. Customer Behaviour Segmentation:This approach is used by most of marketers. The message and medium are tailored as per the needs and preferences of the customers in that segment.
  3. Customer Life cycle Segmentation:This basis notes where the customers are in terms of their relationship with a company, as opposed to their stage in life or their phone usage. The key stages in the life of a customer are: becomes a new customer, growth stage when he is opting for an upgrade, maturity when his phone usage is stable and ending in a decline stage.
  4. Customer Migration Segmentation:This basis is least used, but is still provides a great value in serving customers on different stages. This clearly distinguishes the segments that are declining in value over a fixed period of time, so that a focused action can be taken to retain customers.

Recognizing the different types of customers is an important part of creating a successful market offering to create a personalized experience for each segment.

Thereafter, an analysis is carried out to check their interests and preferability by online surveys and service calls. This confirms that the groups have been identified correctly and strategies are formed suiting to each segment.

What should operators keep in mind while segmenting?

Segment customers in more granular and behavior-centric ways.

Avoid depending on number-driven and service-centric segmentation.

The aim of segmentation should not be to sell efficiently, but to deliver a personalized and relevant experience to the users.

Go beyond the standard practices of segmenting customers, using existing systems and data sets to permute new groups to serve.

It is important to know that people subscribing to same services or generating the same value to the business will not always respond equally to the same marketing messages.

Impersonal, brand-first segmentation can lead to inaccurate marketing plans.

Demographic segmentation along with behavioral aspects prove to be innovative and successful in creating great personalized experiences for the subscribers.

Conclusion:

Around 2014, customer experience related started to gather steam and further raised the bar for the industry.  Since then, operators are not only trying to offer something better than the other players, but are going a step forward to empower customers by providing the best experiences.

The key here is to identify the right segments in grouping your customers, serving them accordingly. Staying one step ahead of the customers, proactively solving their problems and creating a seamless customer experience will help the operators to provide a defying customer outreach and personalized service experience in every interaction between them and the customers.

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