Insights
Customer Experience | Telecom
Online sales and service are the most important measures for successful digital transformation. Yet most telecom providers are not implementing the fundamentals that bring customers online and keep them there.
Among the 50 global brands studied, companies in the top quartile have 50 times more online customers than those in the bottom quartile.
Significantly, the study also reveals what drives engagement in online sales and service—and thus the cause of these huge differences in performance. Whether the operator is an incumbent or a challenger, or how mature the local e-commerce market is, the key is to focus relentlessly on a few fundamental actions along the customer lifecycle. Here are seven of the most important, many of which have not yet been implemented by the majority of operators.
Telecom operators attract large numbers of visitors to their websites. Most of this comes to them directly—and thus largely for free—when consumers type in a company's web address. The amount companies spend on generating traffic from other sources varies widely. In a group of 20 operators at Western Europe, the companies that spend the most on digital marketing outperform those in the bottom quartile by about 70 percent. But it's not just about how much you spend. What you spend your digital marketing budget on is just as important.
Although many businesses have installed digital marketing platforms to optimize their campaigns, many are still spending too much on display, video and social media ads. These ads almost never generate as many website visits as paid search and, to a lesser extent, online affiliate marketing (including cross-industry price comparison sites)—the go-to sites for prospective buyers. Among the Western European operators we studied, paid search and affiliate marketing accounted for about half of the digital budget, but generated almost all of the orders.
Social media advertising could well become even more effective if potential customers can buy telecom services directly through social media apps. At the moment, however, this is by no means common. People who use social media do not tend to interrupt their activity to visit a commercial website or external app. Currently, paid search and affiliate marketing not only generate the most traffic, but also a lower cost per click than display, video, and social media advertising - while attracting the very visitors most likely to make a purchase, further improving the cost per order.
According to a Mckinsey study, the conversion rates of some operators are more than three times higher than their competitors. To maximize conversion rates, traffic delivered via campaigns should be directed to a dedicated landing page, not a homepage. Our research shows that for every additional page visitors have to click through in the buying process, they are more likely to abandon. Operators can reduce abandonment rates by presenting each page as a critical element of a clearly designed customer journey. The following steps will help:
Low fulfilment rates have several causes. Sometimes operators fail to identify credit problems early and have to reject customers further down the process. Sometimes logistical problems occur. Often customers change their minds during a legally mandated window because they either regret the purchase or were tempted by win-back offers from their current operator.
This is why short order cycles and quick follow-ups are so important. Telcos should contact their customers as soon as possible when a home visit is required for installation, and provide them with direct access to a fieldservice scheduling platform so they can book their own appointments. Some operators with a high order fulfillment rate even offer to schedule appointments for their customers before they place an order. Of course, the faster SIM cards and devices are delivered, the less likely recovery offers will be successful.
Some of the simplest measures - such as verifying addresses and making sure customers are home when landline devices are installed - can make a difference. Again, a self-service app on customers' devices that immediately notifies them of an incoming delivery or a rescheduled technician visit can be critical.
Less than one-third of customers of the Western European operators studied interact digitally with their telecom provider in a given month, and less than half are active over a 90-day period. As a result, it is difficult to replace retail stores or call centers without upsetting customers who need help but can no longer find a local store, or who put up with long wait times when they call the hotline.
Among active customers, mobile access is important: more than half of page views at telecommunications companies come from mobile browsers. So a responsive website with mobile design is still a must. But encouraging customers to download a carrier's app instead of going through a mobile browser results in much greater interaction. What's more, app usage correlates inversely with call volumes to operators' help centers. The best digital operators never miss an opportunity to remind their customers to download and use their apps.
This can be done on websites and in ads on TV or when customers contact call centers. SMS messages to smartphones and QR codes placed prominently in stores and on product packaging can also work. The telcos with the most active app users also offer generous rewards, such as a gigabyte of free data volume for first-time registration or for an in-app purchase.
At Western European, apps already account for more than half of all interactions with customers. Telcos still have a long way to go, although some of them are taking a big leap forward.
After an initial flurry of activity, a majority of apps installed on average phones are never used again or are uninstalled to free up storage space. Apps need to be easy to configure. A customer's SIM card should be automatically detected and the app should already be pre-populated with basic account information. Encourage customers to enable fingerprint authentication when they first log in - biometric authentication can nearly double the number of customers who use an app regularly. Among operators surveyed at Western European, monthly signups were 166 percent higher for apps with biometric authentication than those without the feature. Yet only about half offer it.
Once customers open an app, they should be able to find what they want immediately. Some of the most digitally advanced operators use predictive models to determine what each customer might want and adjust menu options accordingly. Most companies that rank in the top quartile for app usage do the following:
Targeted notifications could be offers for roaming packages for customers waiting in airport lounges, top-up credits for cost-conscious students, notifications about online safety features sent to working parents around lunchtime, and early-season notifications for football fans indicating that fiber connections and a better viewing experience are now available in their neighborhood. Even when delivered through third-party apps, notifications that help users find new content, especially streamed video content, keep app users interested. Apps are already the second most popular channel (after TV) for consuming media content.
Some operators renew a third of their customer base online, others none. Among the Western European operators surveyed, 78 percent offered contract renewals through their websites, but only 56 percent through their apps. There was a gap of 27 percentage points between the companies in the top quartile and the bottom quartile in terms of the proportion of contracts renewed online.
For an app to serve as the primary renewal channel, it must be easy to use. It must also guarantee the same terms and conditions offered in-store or via telephone customer service. Operators need to fight the perception that the best terms can only be obtained by haggling with call center agents. They could, for example, guarantee that online offers will not be undercut in other channels. Operators are increasingly aware that contract renewals can be digitized as well as new deals, and both transactions benefit from the simplicity and transparency customers expect from best-in-class digital providers.