Digital Transformation for telcos is well under way, fueled in large part by the expectations of an always-on, on-demand generation. Telcos looking to transition from a traditional Communication Service Provider (CSP) to a Digital Service Provider (DSP) will need to be on top of the trends that will shape 2017 and the years to come. These include:
#1: A Focus on Net Promoter Score (NPS).
Net Promoter Score, or the metric that demonstrates the likelihood a customer will recommend a company to their colleague or friend, has ascended over recent years to become one of the most prominent metrics for companies. More than two-thirds of Fortune 1000 companies use NPS (Bain), and for good reason. Net Promoter leaders on average grew at more than twice the rate of their competitors.
For CSPs in 2017, NPS will become an important indicator of digital capability and will start to appear in quarterly financial reports, and Chief Digital Officers success will be judged by the metric. NPS will become the leading litmus test of customer experience, translating to loyalty and long-term shareholder value. According to Capgemini, operators that have higher scores will see their revenue grow by 33 percent, those with lower scores will see a revenue decrease of 7 percent on average.
#2: Embracing the cloud.
This is is becoming the next wave of delivering services and disrupting the status quo. To date, traditional telcos have been reticent to move their data-rich and highly sensitive operations into the cloud. However, 2017 is the year CSPs will finally embrace cloud software in an effort to be more fully digital and to boost their operational agility. Cloud services will allow CSPs, currently hampered by large, legacy systems, to plug-and-play straight into the technologies that will allow them to adapt and profit in real time. CSPs will recognize that cloud technologies offer the ability to bring new customer engagement opportunities to market faster and with greater reliability.
Jennifer
Kyriakakis,
VP of Marketing,
MATRIXX
#3: No more strategy, it’s time to execute.
CSPs have considered digital strategies for some time and are ready to take them into the mainstream - and customers are eager to see real execution in the form of real-time interaction with their service provider. Digital leaders have already started to emerge, and they are the ones who are winning customers and making money. In 2017, we’ll see more from investors and financial analysts benchmarking the efforts of these digital leaders.
Today’s telcos cannot afford to drag their feet when it comes to implementing end-to-end digital solutions. McKinsey & Company research shows telecom companies with robust digital capabilities boast a profit margin of 43 percent, compared to their counterparts whose margins hover around 21 percent. That’s why over the last three years, 25 percent of mobile operators have hired a chief digital officer to develop and rollout new digital experiences for their customers. We expect to see that number climb higher in 2017.
#4: Customer engagement will be seamless across all channels and devices.
Omnichannel is the key to true continuity of engagement, and will serve as the cornerstone to the omniscient customer experience. CSPs have been focused on building out the capabilities necessary to interact with consumers seamlessly, even as those consumers ‘hot-swap’ between devices regularly. By focusing on an omnichannel experience, CSPs are helping to redefine customer service - allowing customers to take control of managing their own engagement, on their own terms.
CSPs have, on average, around 150 monetizable interactions with a customer on a daily basis, and that customer expects instant responses and seamless service each and every time. This requires greater business agility and a level of responsiveness that can only be achieved via a digital platform.
#5: On-Demand will spread beyond data.
We predict that as customers get a taste of on-demand opportunities, 2017 will see a proliferation of on-demand business models beyond telecommunications and into other vertical sectors, especially in developing regions. For example, Latin America and Southeast Asia are seeing the first implementations of pre-paid electricity, as this model works especially well for utilities.
In addition, there will be a proliferation of on-demand capabilities. Consumers want their mobile operators to change the old-school billing models, because subscribers today only want to pay for what they’ve used. This means large, inflexible data plans will become a thing of the past.
Gartner predicts by 2017, U.S. customers' mobile engagement will drive mobile commerce revenue up 50 percent. CSPs must interact with their customers in real-time if they’re going to impress them by offering personalized offers ‘in the moment’ and hold onto them in a market notorious for its high level of churn. 2017 will be a pivotal year for telcos to lead in providing greater customer control, inspiring a new wave of loyalty and transitioning the traditional mobile operator/subscriber transactional engagement into a mutually-beneficial, instant relationship.
About The Author:
Jennifer Kyriakakis has been working in the Communications Industry for over 20 years in Marketing, Sales and Systems Delivery. Prior to MATRIXX, Jennifer worked for Portal Software (acquired by Oracle) where she was responsible for the global marketing strategy of Portal’s product suite for the broadband and mobile markets. During her 7 years with Portal and Oracle, she also held positions in Services Marketing, Customer Programs, and Sales Engineering. Before joining Portal, she worked with Verizon International Wireless managing large implementations of billing and customer care solutions for their global operating partners. Jennifer began her career in the Communications Practice at Accenture where she developed billing, invoicing, and payment processing applications for wireless operators. She holds a bachelor's degree in information technology and operations management from the College of William and Mary.
