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Customer Strategist Journal
Innovative strategies for building more profitable customer relationships. Published quarterly online and in print.
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Telecom Convergence: Changing the Conversation

The Essential Element of Customer Service in Telecommunications

In response to declining revenue from legacy, and connectivity-based services, telecommunication companies are diversifying their service portfolios to generate new revenue streams. However, most carriers are overlooking an essential component of these new offerings: customer support.

Many telecommunication companies have long struggled to embed a customer-centric and quality-driven strategy and execution model into their customer care organizations. These firms now have an added challenge because legacy services are far easier to support than today's more complex products like 3G-based mobile services or IPTV service. These emerging services demand that operators establish new customer support strategies and a new approach to execution.

That new approach requires telecoms to adopt a fundamental strategy: segmentation-based service. Segmentation-based service will allow a customer care organization to conquer the complexities of customer support in a digital world. This will lead to customer satisfaction, and will lay the groundwork for marketing and sales activities within the customer care organization.

Segmentation-based service
As telecommunications offerings evolve, one of the biggest industry trends is that operators are trying to find ways to engage in a conversation with their customer base via their customer care organization. The reason: As numerous studies confirm, there is a direct correlation between "good customer service" and such value-management levers as customer satisfaction, retention, and up/cross-sell propensity.

The difficulty lies in the current state of customer service in the telecom industry. Telcos are still struggling to support their customers and their existing services as complex new offerings continue to proliferate. And while customers scrutinize service quality, company management dissects organizational efficiency and the cost of running the service operation.

Too many operators provide the same level of service to every customer. This structure has huge cost implications for the organization and results in poor quality and service inefficiency. A segmentation-based approach to service helps to deliver on both customers' and management's expectations by providing the right level of service for each customer or customer group based on their value and needs. Essential to a segmentation-based service strategy is channel migration, which helps to contain service costs.

In simple terms, customers' value is not equal; therefore, their treatment strategies should not be equal. Today such emerging channels as mobile, social media, and the Web create opportunities for telco operators to adopt a segment approach that will allow them to optimize their service quality. Higher-value customers receive higher-quality service through direct channels, while operators migrate lower-value customers to alternative channels. Doing so leads to cost optimization, which would not only improve the company's bottom line, but would also help to offset the cost of differentiated services, like concierge services for high-value customers.

This segmentation-based service methodology should trigger a mind-set shift that has implications in four areas: organizational structure, agent profile and skill-set, quality practices, and performance/KPI monitoring (see sidebar). The service operation needs to be structured to support segmentation-based service. This may require additional agent skill sets, changes to processes that impact service quality, and rethinking KPIs (e.g., moving from average handle time to first contact resolution).

Sales potential
These improvements to the service operation also provide telecoms with the capability to capture potential sales opportunities. Customer care touches customers every day, thousands of times. Consequently, deploying a "sales in service" model should be on the agenda of every major operator today; as the telco service portfolio diversifies there are many new products and services to sell.

However, selling through a service organization is only possible when the "service" part of the experience is ?effective and satisfying. Once a telecom company has the right organizational structure, agent profile and skill-set, quality practices, and performance/KPI monitoring, only then can its customer care organizations reach a mature state where the company can deploy a sales in service model.

Additionally, just as telecoms should vary service delivery based on customer segments, they should use segmentation to determine what to sell to whom during which service interaction. Telecoms need to understand what offer, product, or service a specific customer would be most interested in. In fact, many telco operators today are beefing up their marketing analytics capabilities and adopting propensity modeling to determine the best-fitting product or service for each customer segment. They're then using that insight to develop offers and campaigns, as well as to equip agents with the information they need to make the right offer at the right time during each customer interaction.

Good service sells
The latest trends in telecom today, including service portfolio diversification, create new opportunities yet demand a new strategy. Establishing "good service" is critical, as is using a segmentation-based approach to deliver that service in a way that creates optimum service quality, service efficiency, and cost optimization. Mastering the four areas needed to support optimal customer care in today's changing environment—organizational structure, agent profile and skill-set, quality practices, and performance/KPI monitoring—will not only improve service and support, but will also lay the groundwork for increasing sales to different customer segments.