Article
Five Ways to
Reduce Churn in
Telecommunications
Customer experience management lessons you can apply now
from Harvard Business Review
Right now, customers are experiencing your company. They’re using
your products, your network and your services. They’re interacting
with your company online, on the phone, by email and in person.
The question is: Are those experiences forging a bond … or driving
your customer into the arms of another provider?
How does the industry rate in
terms of customer experience
management initiatives?
Churn has long been one of the largest issues facing the communications industry. It’s a multifaceted challenge, but there is one
silver bullet solution: Make your existing customers so happy they
never want to leave.
The good news? Communications companies are more advanced
in customer experience management than other industries. Half of
the communications organizations surveyed feel customer experience provides a competitive advantage and place high strategic
value on customer experience (compared to 45 percent in all
other industries).
How? By managing customer experience. Anyone who’s left a
store after rude and careless treatment – or gotten a kind and
efficient customer service rep on the other end of the line – knows
one thing: Customer experience matters. And the companies
investing in customer experience management (the processes
an organization uses to manage customer interactions across the
enterprise) are far outperforming the ones that don’t, according to
a recent report from Harvard Business Review (HBR).
The report, Lessons from the Leading Edge of Customer
Experience Management, is an in-depth study of more than 400
customer experience management executives worldwide. The
results show a distinct divide between the leading companies and
the laggards in profitability, revenue, market share and customer
retention (see Figure 1).
But what does this mean for you? How does the communications
industry rate in terms of customer experience initiatives? What are
the barriers to effective customer experience management, and
how is the communications industry faring? How does the industry
compare in terms of customer experience infrastructure and the use
of data and analytics? And, most importantly, what lessons can you
learn and apply now?
The not-so-good news is that there’s plenty of room for improvement in all industries. Across the board, respondents from
all industries are still split on funding customer experience
programs, and it appears that no industry feels it does well on
customer retention.
What are the barriers to effective
customer experience management
and how is the communications
industry faring?
Across all industries, the big barriers to effective customer
experience management are:
• Systems integration.
• Organization structure.
• Multichannel complexity.
• Data issues.
Customer Experience Management:
Leading Edge Companies Outperform Laggards
Differences
are revealed
inManagement:
key business
outcomes.
Figure
1: Customer
Experience
Leading
Edge Companies Outperform Laggards.
Differences are revealed in key business outcomes.
Percentage of respondents receiving benefits:
Percentage of respondents receiving benefits:
PROFITABILITY
LEADING
LAGGARD
60% 35%
CUSTOMER QUALITY
LEADING
LAGGARD
66% 27%
REVENUE
LEADING
MARKET SHARE
LAGGARD
60% 28%
LEADING
LAGGARD
54% 29%
CUSTOMER RETENTION
LEADING
LAGGARD
54% 20%
Leading-edge companies give their organization a top box (8, 9 or 10) rating when asked to rate how forward-looking their organization is in its
approach
customer
experience
a 10-point
scale,
where
1 = nottheir
at organization
all forward-looking
and
10 = very
forward-looking.
* Leading-edgeto
companies
give their
organization amanagement
top box (8, 9, or 10)on
rating
when asked to
rate how
forward-looking
is in its approach
to customer
experience
management on a 10-point scale, where 1 = not at all forward-looking
and 10 = verycompanies
forward looking. give
Laggard
companies
give their organization
box (1–4)
ratings when
asked
to rate to
howrate
forward-looking
their organization is their
in its approach
to customer
management
Laggard
their
organization
lowest lowest
box (1–4)
ratings
when
asked
how forward-looking
organization
isexperience
in its approach
toon a 10-point scale, where 1 = not at all
forward-looking and 10 = very forward-looking.
customer experience management on a 10-point scale, where 1 = not at all forward-looking and 10 = very forward-looking.
“Lessons from the Leading Edge of Customer Experience Management,” a report by Harvard Business Review Analytic Services, 2014.
The majority of respondents also view cultivating a customer
focused culture and maximizing customer experience ROI as
challenges, and more than half lack the processes to support
customer experience programs.
But in the communications industry, executives generally rate
these obstacles as less daunting than other industries – and that
indicates more mature, more successful programs.
How does the communications
industry compare in terms of
customer experience infrastructure?
All organizations have reported an increase in the number and
variety of data sources used in customer experience management,
but communications organizations are further along in establishing effective practices and metrics.
Specifically, these five advanced practices were indicated as being
more common in communications than any other industry:
• Developing a formal customer experience strategy.
• Sharing customer experience metrics among employees.
• Creating a consistent set of customer experience standards
across the organization.
• Factoring the customer experience into high-level business
decisions.
• Emphasizing collaboration between customer service and
marketing.
How does the communications
industry rank in terms of using
data and analytics for customer
experience management?
Sponsored by
Technology use and analytics methods are well established in the
communications industry. Maybe it’s not surprising that the research
showed that communications organizations use the widest variety
of data sources for customer experience, including: mobile, social,
phone transcripts, surveys, focus groups and sales feedback.
The research also confirmed that the communications industry is
ahead of all other industries in analytics use, specifically: predictive
analytics, content management systems and marketing operations
management.
So, which best practices will
help communications services
providers keep customers happy
and reduce churn?
1. Create a customer-centric culture
And the best way to do that is to pay for it. Though only one in four
respondents say they connect compensation to customer experience performance, this tactic was rated more effective than any
other customer experience management strategy.
Figure 8
The Most Effective Customer Experience Practices Are Not
Figure
2: Thethe
Most
Effective
Customer Experience
Necessarily
Most
Common
Please
rate
the
effectiveness
of
the
practices
your organization
currently employs to manage
Practices Are Not Necessarily the
Most Common
the customer experience on a scale from 1 to 10, with 1 meaning not at all effective and 10
interviewed by HBR. “We had to make it clear that it’s not another
initiative. It’s part of what we do. We achieve our sales goals via
solid customer experience.”
Please
the effectiveness
of the
practices
your organization
meaningrate
extremely
effective. [ALL SAYING
“EXTREMELY
EFFECTIVE.”
TOP BOX SCORES OFcurrently
8-10; AMONG THOSE WHO
employs
to manage
theCUSTOMER
customer
experience
on a scale from 1 to 10,
ROUTINELY EMPLOY
THE RELEVANT
EXPERIENCE
PRACTICES]
with 1 meaning not at all effective and 10 meaning extremely effective.
Systems integration, channel complexity, organizational structure
● PERCENTAGE “EXTREMELY EFFECTIVE”
53%
27%
Connect corporate rewards to customer experience metrics
52%
62%
Communicate customer experience’s importance to all stakeholders
52%
44%
Develop customer experience strategy to align with corporate strategy
49%
39%
Share customer experience metrics with all staff
47%
8
69%
Most Effective
Customer Experience Practices Are Not
Respond to individual customer‘s feedback
cessarily the Most Common
e rate the effectiveness
46% of the practices your organization currently employs to manage
ustomer experience on a scale from 1 to 10, with 1 meaning not at all effective and 10
45% [ALL SAYING “EXTREMELY EFFECTIVE.” TOP BOX SCORES OF 8-10; AMONG THOSE WHO
ning extremely effective.
3. Tame channels and data
● PERCENTAGE IN USE
and data issues all make providing a consistent customer experience challenging for any company. However, leading-edge
companies recognize multichannel management as a strategic
imperative.
More than half of leading-edge companies say that multichannel
management is extremely important, versus one in five of lagging
companies. In addition, leading-edge companies are more likely
to embrace new channels such as social media, mobile and video.
4. Apply analytics
Leading-edge companies are embracing new technologies and
processes (see Figure 3), and are more effectively applying
analytics to:
• Create organizationwide customer experience standards.
• Analyze cross-organizational customer insights.
• Map customer interactions within the organization.
The leaders also recognize the importance of emerging analytics
technologies, including systems that analyze online behavior,
● PERCENTAGE “EXTREMELY EFFECTIVE” ● PERCENTAGE IN USE
social media sentiment and text, as well as tools that can deliver
analysis of large data sets.
one of the biggest opportunities relates to reward structures. Only one in four (27%) respondentsreal-time
say that
Train new
and existing
staff in PRACTICES]
customer experience skills
NELY EMPLOY THE RELEVANT
CUSTOMER
EXPERIENCE
%
%
they connect formal reward structures to customer experience performance, despite the fact that doing
so wascompensation
rated more effective
any otherexperience
single customer
experience
management
tactic.
“Tying
tothan
customer
metrics
creates
a
ect corporate rewards to customer experience metrics
As
with
most
things,
with
customer
experience
management
you
get
what
you
incentivize.
At one techcustomer focus from top management down. The results are
nology company, all executive- and corporate- (VP) level pay plans include a portion of variable compen%
Figure 10
shared
with everyone, and it’s top of mind for everyone,” said one
sation tied to customer satisfaction. “It sets the tone,” says a company executive. “We’re all going Figure
to be
3: Leading-Edge Companies Are More
%
technology
executive.
measured oncompany
customer success.
You can’t work in a silo.” That’s the case at many leading-edge companies.
Leading-Edge Companies Are More Effective in Using Analytics
municate customer experience’s importance to all stakeholders
Other customer experience practices that were rated “most effective”ANALYTIC
include:
sharing
RD BUSINESS REVIEW
SERVICES
REPORT customer experience metrics and models
%
with allstrategy
employees;
reviewing
customer experience projects and
op customer experience
to align with
corporate strategy
metrics regularly to monitor progress toward business goals; and
%
screening candidates for customer-centric attitudes during the
%
hiring and selection process.
%
Effective in Using Analytics
Please rate the effectiveness of the practices your organization currently employs to manage the
customer
experience
oneffectiveness
a scale from 1 to 10,
not your
at all effective
and 10 meaning
Please
rate the
ofwith
the1 meaning
practices
organization
currently
extremely effective. [TOP BOX 8–10, WHERE 10 = EXTREMELY EFFECTIVE]
employs to manage the customer experience on a scale from 1 to 10,
LEADING-EDGEextremely
COMPANIES ●effective.
LAGGING COMPANIES
with 1 meaning not at all effective and 10●meaning
55%
51%
48%
49%
customer experience metrics with all staff
%
%
Despite being highly rated, these practices are not always
commonly used (see Figure 2).
ond to individual customer‘s feedback
%
%
2. Give the business control of
customer experience
new and existing staff in customer experience skills
A coordinated approach to customer experience management
– one that is built from the ground up – is more likely to take root.
“You don’t want customer experience to sound like just another
of the biggest opportunities relates to reward structures. Only one in four (27%) respondents say that
corporate
initiative,”
said one
customer
experience
connect formal
reward structures
to customer
experience
performance,
despite director
the fact that doing
as rated more effective than any other single customer experience management tactic.
ith most things, with customer experience management you get what you incentivize. At one tech-
20%
17%
12%
Figure 10
0%
Leading-Edge Companies
Are More Effective
in Using AnalyticsCREATE
ANALYZE CROSSMAP CUSTOMER
COMPARE DIFFERENCES
INTERACTIONS
ORGANIZATION-WIDE
Please rate
the effectiveness of theORGANIZATIONAL
practices your organization currently
employs to manage
the
IN EXPERIENCE
CUSTOMER EXPERIENCE
QUALITY
AMONGon a scale from 1CUSTOMER
customer
experience
to 10, with 1 meaning not at WITHIN
all effective and 10 meaning
ORGANIZATION
STANDARDS
extremelySEGMENTS
effective. [TOP BOX 8–10, WHEREINSIGHTS
10 = EXTREMELY EFFECTIVE]
● LEADING-EDGE COMPANIES
● LAGGING COMPANIES
“It’s critical that we have data at our fingertips,” says another senior vice president. “That requires a properly staffed, centralized data decision support function.”
51%
55%
49%
Leading-edge
companies also place more importance
on a number of technologies for customer expe48%
rience management, including online surveys, marketing operations management, real-time decisionmaking tools, social media monitoring software, and content management systems. They recognize the
importance of emerging analytics technologies, including systems that analyze online behavior, social
gy company, all executive- and corporate- (VP) level pay plans include a portion of variable compen-
media sentiment, and text as well as tools that can deliver real-time analysis of large data sets. Figure 11
n tied to customer satisfaction. “It sets the tone,” says a company executive. “We’re all going to be
Integrating all the necessary tools is a challenge, but leading-edge companies devote20%
the resources to
ured on customer success. You can’t work in a silo.” That’s the case at many leading-edge companies.
17% customer experience ecosystem. One customer experience executive is integrating a
create a cohesive
Promoter and customer effort scores, are not as widely established.
Leading-edge companies use a wider range of metrics, often more effectively, to report on their cust
experience management progress, including measures such as customer lifetime value, indirect t
social media sentiment, and upsell rates. Figure 12
It can be difficult to settle on a set of metrics that matter to both the customer and the company, sa
sales and marketing consultant. “Like everything else,” he says, “we’re often data rich but inform
poor.” But the best customer experience measures tell a financial story.
5. Expand the definition of customer
experience success
Measuring the impact of customer experience efforts is difficult.
Most respondents struggle to tie customer experience investments to the bottom line.
Figure
4: Leading-Edge Firms See Greater Promise
Figure 11
in Emerging Tools
Leading-Edge Firms See Greater Promise in Emerging Tools
In your opinion, how promising are the following emerging
In your opinion, how promising are the following emerging technologies for improving your organizat
technologies for improving your organization’s ability to manage
ability to manage the customer experience? [TOP FIVE EMERGING TECHNOLOGIES]
the customer experience?
● LEADING-EDGE COMPANIES
The more traditional measure of customer success – customer
61%
satisfaction scores – are widely used, yet a variety of other metrics
LESSON SIX: EXPAND THE DEFINITION OF CUSTOMER EXPERIENCE SUCCESS
49%
rated highly important (such as Net Promoter and customer-effort
Measuring the impact of customer experience efforts is difficult—as evidenced by the
scores) are not as widely established.
● LAGGING COM
trouble most
behavior analytics
companies have tyingCustomer
customerexperience/online
experience investments
to business outcomes.
The more traditional measure
54% of customer success—customer satisfaction scores—are widely used in
all companies. Yet a variety of other metrics rated highly important by those that use them, such as Net
Leading-edge companies use a wider range of metrics to report
37%
Promoter and customer
effort scores, are not as widely established.
their customer experience management progress, including
Real-time decision making
Leading-edge companies use a wider range of metrics, often more effectively, to report on their customer
measures such as customer lifetime value, indirect traffic, social
experience management progress, including measures such as customer lifetime value, indirect traffic,
56%
social media sentiment, and upsell rates. Figure 12
media sentiment and up-sell rates (see Figure 4).
31%
It can be difficult to settle on a set of metrics that matter to both the customer and the company, says the
Conclusion
Social media analytics
sales and marketing consultant. “Like everything else,” he says, “we’re often data rich but information
poor.” But the best customer experience measures tell a financial story.
41%
30%
Customer experience efforts need enterprisewide visibility and
Location-based applications
focus to last. “You have to be clear about what you’re trying toFigure 11
35% See Greater Promise in Emerging Tools
accomplish and take it a step at a time,” says one customer experiLeading-Edge Firms
14% are the following emerging technologies for improving your organization’s
ence director, “from marketing the program to employees to In your opinion, how promising
ability to manage the customer
experience? [TOP FIVE EMERGING TECHNOLOGIES]
Text
analytics
developing new processes to rewarding people for customer
● LEADING-EDGE COMPANIES ● LAGGING COMPANIES
experience behavior to reporting on results.” Ultimately, however,
when customer experience becomes a strategic agenda item 61%
for
the whole company, it results in improved business outcomes 49%
across the enterprise.
Customer experience/online behavior analytics
LESSONS FROM THE LEADING EDGE OF CU
Read More:
Download the full report Lessons from the Leading Edge of
Customer Experience Management.
54%
37%
Real-time decision making
56%
31%
Social
Find out how Globe Telecom reduced churn from double digits
tomedia analytics
1.65 percent.
41%
Learn about SAS® solutions for the communications industry. 30%
Location-based applications
35%
14%
Text analytics
LESSONS FROM THE LEADING EDGE OF CUSTOMER EXPERIENCE MANA
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