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Telecom on the move from a multi-channel reality to an omni-channel vision

The telecom industry and its services have been, and are, the backbone of digitalization. So it is interesting that so far just this industry has been struggling to provide its own customers a perceived value via mobile or online channels. Originally it lacked the drive, because the entire industry defined service quality mainly through network quality, service hotlines and its own stores. Consumers, on the other hand, experienced how digitization in other industries had transformed and simplified their shopping experience and they now expected the same comfort from their telecom service provider.

For many industries, a sharp increase in online sales was already day-to-day reality as in early 2012 when a simple pure online offer named "Free" entered the telecom market in France. As a result, the share of online sales rapidly increased from under 10 percent to almost 50 percent. Probably one of the most impressive examples of a market ready for change.

Chart Share of Online Sales

Source: Strategy & 2014

 

Telecoms as digital fashionistas

Since then, telecom companies have undertaken a hectic effort to digitize both their internal processes and customer interactions. However, creating a truly continuous omni-channel experience proved to be a challenging undertaking. Telcos are faced with complex products including different contract variants, additional packages, bonus programs and numerous legacy pricing models mixed with physical products.

Not surprisingly the large-scale study done for the book "Leading Digital" in 2014 labels almost half of all telecom companies as "digital fashionistas". That is the second-highest share of all sectors, only surpassed by the travel industry.

Chart Digital Fashionistas

Source: Capgemini Consulting 2014

 

This attests the telecommunications sector that many innovative digital projects and features are launched,

  • but also a lack of coordination,
  • a missing overall digital vision
  • and a digital culture that is more anchored in individual silos than in the company as a whole.

 

Moving to an omni-channel reality

The good news is that omni-channel management can be implemented step by step and quick wins are waiting along the way. In their "Fast-Forward to Omni-Channel Management" case study, Ovum points out the key factors for a successful transformation and a good way for starting the process:

  • Coherent approach: The organizational structure has to be focused on customer experience. This is the only way to ensure that the different parts of the omni-channel development fit together and ultimately form a coherent strategy.
  • Omni-channel management team: Experience shows that all impacted departments need to be represented in the team and backing by top management is critical. An omni-channel transformation should not be driven exclusively by marketing and IT.
  • Customer journey mapping: Identifying the interaction points of different customer types allows the organization the creation of a smooth process across different channels.
  • Integration of legacy systems: The transformation is an ongoing process that must be done while existing processes are still in place.
  • Prioritizing capability gaps: Issues other processes depend on should be given priority. For example, unified customer data is a prerequisite for personalized services. Quick wins, such as reducing support expenditure by offering self-service options, should be included in the roadmap to drive momentum.
  • Prime system integrator: Most companies need external support and the selection of a suitable service provider is key. A combination of technical and management knowledge is necessary and experience across different industry verticals highly beneficial.

 

However, according to Ovum’s recent paper, 70 percent of CSPs are still in an early phase of omni-channel implementation. At least omni-channel has reached the top of the strategic agenda. The "Navigating the Road to 2020" survey by EY puts customer experience management unquestionably at the top of strategic priorities.

Chart most important strategic priorities

Source: EY 2015

 

Concerning the most important initiatives more than two-thirds of surveyed telecom managers list the creation of a more personalized customer experience as the most important project.

Chart most important initiatives

Source: EY 2015

 

This shows impressively that omni-channel is now one of the central concerns of the telecom sector. It is still an ongoing process though that is by no means completed. And there are plenty of reasons to continue on this road:

  • In 2015, Northstream estimated the annual OPEX savings potential by well-implemented omni-channel processes being up to 6.4 billion dollars for Western European suppliers alone.
  • McKinsey, on the other hand, was able to show that telecom customers are much more satisfied if customer contact is purely digital or established via mixed channels. Compared to traditional contact forms, customer satisfaction is 33 percent higher.

 

Disruptive market environment

In the foreseeable future, the telecommunications sector will continue to be a strongly changing market and OTTs in particular will change customer expectations. Particularly in the course of the spread of e-SIMs, new opportunities and risks will arise. According to a current estimate by McKinsey, the proportion of subsidized phones will be reduced to only 8 percent by 2020, thus posing further challenges for customer loyalty.

Chart mobile-phone sales, subsidized vs nonsubsidized

Source: McKinsey 2016

 

A complete omni-channel integration can be a significant contribution to customer loyalty:

  • Mobile first: Mobile experience should be the focus. A central app could allow users to interact seamlessly from the web to the shop. Banks, for example, are showing how the smartphone can be the hub for all services.
  • Online: The online experience can be further simplified and personalized through omni-channel integration. More self-service options and relevant options can be offered.
  • Store: Even highly digital-oriented customers value stores as a physical incarnation of digital products and services. Kiosks with check-in via mobile devices can further enrich and personalize the shopping experience.

 

Above all, it is essential to address changed customer expectation. Each customer has a history and the company is expected to know it. Service interactions, which always start fresh, by now simply incur displeasure.

 

Sources:
Fast Forward to Omni-channel Managment, Ovum, 2017
E-SIM for consumers – a game changer in mobile telecommunications?, McKinsey&Company, 2016
Quantifying the value of Omni-channel CRM for Telecoms, AsiaInfo, 2015
Global telecommunications study: navigating the road to 2020, 2015
Why companies should care about e-care, McKinsey&Company, 2014
Becoming a digital telecom, strategy&, 2014
Leading Digital, Capgemini Consulting, 2014