Reducing Subscriber Loss with Connected Home Intelligence
It's far more cost-effective for service providers to maintain relationships with existing telecommunication services subscribers than market to, acquire and set up new customers. According to recent industry research, the time and energy required to solicit new customers can be up to five times more expensive than maintaining your existing customer base. Frederick Reichheld of Bain & Company detailed in a 2021 report that a 5% or more increase in the retention rate can lead to a 25% or more increase in profits, a finding the requires more attention.
Because of customer volatility in the telecommunication market, driven in larger part by the pandemic and the international growth of connected home services and solutions, customer retention has become an even greater focus for ISPs/CSPs and Telcos. Subscriber turnover continues to keep industry executives awake at night as they look for strategies to stabilize the shift. The impetus to maintain a positive quality of experience (QoE) for customers is because their loss erodes profits and reputation, putting the entire business in precarious danger. Growing the customer base starts with keeping existing customers happy. This mindset carries through as new customers adopt the organization’s services, building a solid foundation of growth and profitability.
The Need for Quality of Experience (QoE) in Customer Retention
The preservation of a strong customer base requires insight, engagement and oversight. To begin, Communication Service Providers need to know who is likely to end their subscription. Second, they need to identify and prioritize the organization’s most valuable customers. Third, it will be critical to focus on where to focus retention efforts. The primary goal is to catch the most valuable customers before they leave.
Telecommunication providers must be more proactive in terms of customer retention. By reducing the number of departed customers by 5%, profitability jumps by 25% to 125%. In addition, for every 2% increase in retention, CSPs reduce operational costs by about 10%. Why such a jump in profitability? It’s due to the added value from retention – loyal customers. Loyal customers are more involved customers. They are the heart of thriving businesses, not only in spirit, but in sales for higher ARPU. Loyalty leads to upselling with 90% more new sales than customers who feel disengaged with your company or dissatisfied with your services. In addition, a loyal customer usually is willing to spend more than 60% on a single transaction than new or disgruntled customers, guaranteeing a unit profitability 23% higher than the average customer.
Customer Retention as an Art
Throughout the evolving world of ISPs/CSPs, speed is no longer the only driver of QoE. As we move forward with more devices, apps and IoTs in the home, many factors influence QoE for consumers. In today’s busy digital marketplace, savvy consumers often check out the alternatives. They shop around to get the best deals easily and quickly. Therefore, it is hard to maintain brand loyalty with more churn as revenues from renewals become increasingly difficult to achieve. QoE is a key added value today for consumers. Therefore, to stop churn, QoE can be a strong differentiator for operators – whether in the sales process or the retention stage. With premium QoE, CSPs connect better with customers for higher retention rates. The best relationships are built on deep knowledge, mutual support and understanding.
Meeting New Consumer Challenges with Application Intelligence
With respect to the Connected Home, there are two emerging challenges with new use cases. First, the Connected Home experience is greatly affected by the plethora of connected applications such as gaming, streaming, video conferencing and more. The applications are sensitive to the home environment and specific connectivity conditions. It’s a new support issue for ISP Care teams. They need to understand what’s happening in a customer’s home and how to help.
How can ISPs know what apps are being used in the home?
Care teams require relevant and timely data to provide real time-response. Poor response to customer care needs is a prime factor in customer retention. Today’s customer doesn’t want to wade through a confusing knowledge base, converse with a bot, or interact with a poorly trained call center employee. With Application Intelligence solutions, ISPs automatically detect QoE issues, and their root-cause, inside and outside of the home, shortening support calls and improving first-call resolution. They also deliver quick problem reports, analyses, and actionable insights for problem resolution to Tier 1-3 customer care.
At the heart of Application Intelligence technology are five unique leading-edge components – App. ID, QoE Scoring, Root Cause Analysis, Recommendations, and Resolutions. Together they form a powerful tool that governs the contextual awareness – the secret-sauce for generating unmatched insights.
Proactive service providers retain more customers
Another important challenge is the ability to provide a window into the home about churning customers before it’s too late. With the increase in home activity, understanding more about QoE and being proactive in customer care becomes more important. Proactive engagement with subscribers provides operators with a sea of insightful data that can be used to halt churn. For example, data analytics can provide information on a poor customer-product fit.
With Application Intelligence, ISPs get new essential information to predict the customer’s churn risk within a certain timeframe, acting even before the customer threatens to leave. This new approach to QoE automatically identifies subscribers’ pains and needs. It enables profiling and segmentation of the subscriber base by trends, events, geography and more, creating groups of likely buyers for dedicated “churn-busting” campaigns.
It’s essential for ISPs to upgrade their Customer Care with Application Intelligence for a premium QoE to reduce churn and facilitate troubleshooting with new visibility and troubleshooting tools. Ideally, weaving the reactive, real-time needs of customer care units and proactive, near real-time requirements of marketing together is a good investment.
Retaining Customers with a Superior CX
Reducing churn is key to sustaining long-term growth for telecommunication companies and service providers. Operators will need to embrace the new age data-driven approach to effectively identify potential customer issues for prevention and use KPIs to track the best way to rectify them. With business intelligence powered by Application Intelligence solutions with analytics, operators, marketing intelligence and research, service providers can make data-driven decisions to better optimize the business process.
About the Author
Yossi Geller, Veego's VP Marketing, brings over 20-years of experience marketing software solutions. His extensive knowledge and experience in cybersecurity and leading marketing teams to success makes Yossi an extremely valuable asset to the Veego team.
Visit our website: www.veego.io