Press release – December 22, 2014
By Dan Meyer, RCR Wireless
Customer relationship management has always been a serious subject for mobile operators as in most markets around the world the wireless communications space often has more competitors than other communication segments. This has forced mobile operators to remain especially attentive to the needs of their customers.
This focus has increased in recent years as the competitive landscape has changed due to growing saturation in many markets, which has eliminated the “low-hanging fruit” excuse of just picking up new subscribers to replace those that might flee.
Also, network technologies have evolved with the move towards all-IP based LTE rollouts that have allowed mobile operators to more finely parse out information on the needs and habits of their customers. More recently, mobile operators have begun to look at deploying a broader range of software solutions to help deal with CRM platforms as well as are beginning to look at the benefits network virtualization technologies can provide. In addition, social media has become a new facet of
CRM operations, with mobile operators now looking for more personalized interactions with their customers.
What is CRM and where is it going?
However, before diving into the market, it might be good to take a step back and lay out a definition of what CRM is. As with all acronyms, the specific view on CRM seems to sway slightly depending on where in the ecosystem the definition is coming from. Often times adjacent services like customer experience management and customer retention management creep into the CRM lexicon. That was the case in some instances with those interviewed for this report, highlighting the over-arching platforms mobile operators are managing in their attempts to refine their service offerings.
According to a recent Analysys Mason report:
“CRM encompasses the outbound marketing and customer support functions. CRM software sllows [communication service providers] to assemble large sets of data to manage their customer relationships more efficiently. CRM software helps customer service agents and automated self-care systems to provide the best product and service offers for current and new subscribers. It allows marketing departments to understand purchasing patterns and the effectiveness of new product and service campaigns. CRM is the central repository of customer data that is utilized by sales, marketing, customer service and finance groups. CRM includes independent product catalogue offers.”
Further clarifying the position, Rob Rich, managing director of TM Forum’s Inisight Research noted: “CRM has been largely built around customer support. CEM is broader. CEM is also seen as providing a relationship between the customer, value and influence from social networks. CRM is more focused on the processes.”
A recent report from Ovum cited the increased need to focus on customer relationships as a trend to watch going into 2015. The research firm reported that CRM and e-commerce solutions targeting the enterprise space will see compound annual growth rates of approximately 10% through 2018.
“The telecoms industry is witnessing a long-term shift in spend towards customer-oriented systems and processes to improve customer satisfaction,” said Peter Dykes, senior analyst for Telco IT at Ovum. “Investment will be geared towards telecoms infrastructure (cloud platforms and BSS/OSS systems to support LTE implementations) and online channels to support the move towards digital lifestyles.”
According to Analysys Mason, worldwide spending on customer care software is forecast to grow from $3.6 billion in 2013 to $5.4 billion in 2018, a compound annual growth rate of 8.7%. The firm noted it had increased its forecast due to “the expected increase in the investment in next-generation CRM and self-service systems.”
In the near term, Analysys Mason predicts growth in the CRM space will be driven by “efforts to increase average revenue per user and reduce churn in developed markets; increasing competition in emerging markets, which will drive higher levels of customer service; the need for consistent product offerings across the multiple sales channels and a single multi-channel self-service platform; and the increasing investment to meet the needs of small and medium-sized enterprises.”
Looking further ahead, Analysys Mason said it expects growth to be driven by operators looking to “dramatically reduce their cost structures; new and extended systems to meet the needs of new digital economy services offered by CSPs, cloud computing and storage services; wholesale customer care for CSP service resellers offering [machine-to-machine]; and renewed CSP interest in transformation projects.”
Top CRM vendors include Salesforce.com, SAP, Oracle, Microsoft Dynamics, Amdocs, Ericsson and others.
Reducing churn was mentioned by a number of people as one of the most important aspects of more robust CRM efforts. This issue has become more important for mobile operators as many in mature markets are now fighting with rivals over the same customers.
Operators noted that CRM is often the first point of contact with a customer and thus set the tone for all future interactions. Get it right the first time and there is a better chance that a customer will go into all future interactions with a positive mindset and lower propensity to churn.
“At U.S. Cellular, we want to leverage every customer interaction to deepen the relationship with our customers,” said Jean Lin, director of customer lifecycle management at the regional mobile operator.
“Retaining current customers is vital to the health and growth of our company, and it is something that we are very focused on.” One way to boost the chances of a positive first interaction is to have as much information on a customer as possible, thus reducing miscommunication and the potential for a negative experience. No reason to tee up a customer to be stolen by a rival if at all possible.
“CRM has become very important for us for competitive reasons,” explained Justin Croft, manager of regional operator C Spire’s brand platform analytics program.
“With the current levels of saturation, carriers are just stealing customers from each other. The need to keep and maintain one’s customer base has become a simple math issue. It’s much less expensive to keep those you have than attract those from rivals.”
This mindset has become especially apparent in recent months as mobile operators have targeted the customer base of rivals with offers to pay off early termination fees and provide superior trade-in value for devices. These additional upfront costs, though tempered by a reduction in device subsidies, have made the need to keep customers instead of relying on stealing customers a more poignant financial decision.
To help with keeping current customers happy, mobile operators are increasingly turning to analytics platforms to help them dig into potential insight that is already available on their networks.
Croft noted that C Spire’s CRM platform taps into its analytics program that allows for an “action-oriented” approach into how C Spire enables all of its customer relationship touch points to be on the same page in terms of how the carrier deals with each customer.
“There are so many reasons why a customer calls or walks into a store,” Croft explained. “Has this customer called us four times today? A lot of call centers can’t even tell that. It’s important to have and know predictive factors into knowing if a customer may leave and how a customer care person can handle that. … We are recording these interactions across channels.”
Croft added that these moves are not just attempt to mitigate churn, but to also see if there are any service issues the customer may be experiencing or if a particular customer is ripe to add a new line of service. To reach this level of insight, C Spire pulls data from across the organization in order to paint a customized picture of each customer.
“We pull data from all over the organization, primarily from our billing system and customer interactions, though also from billing usage,” Croft said. “We use this to create what we call a comparable quality metric. … The key is to bring all of this into one spot for analysis, breaking down the silos so we can understand collectively how to better relate with our customers.”
Keep it consistent
This breaking down of silos across customer touch points was noted as one way mobile operators look to benefit from processes already put in place by more narrowly focused over-the-top providers and Web-based telecommunications companies.
Yossi Zohar, marketing and product management executive at Amdocs, noted that traditional telecom providers are often burdened with legacy systems that when integrated into new platforms often leads to increased complexity if not handled correctly. This leads to inconsistent CRM interactions with consumers that can in turn lead to greater chances for churn.
“Consistency remains a challenge,” Zohar explained. “What operators should do is work to ensure that all of its touch points are looking at the single version of the truth. These are typically all siloed areas that are not being tapped into across the organization.”
Zohar added that this inconsistent approach often results in a lack of real-time sharing of information across an organization, which can lead to customers moving through various, and increasingly expensive, channels in order to get to an answer that should have been handled in the first point of contact.
“Customers may freak out following an online interaction and then place a call into a call center,” Zohar said. “This results in an $8 interaction on top of whatever it cost for the carrier to handle the online interaction.”
Zohar noted that research has found customers don’t like to place calls into call centers to begin with, which results in a customer placing an expensive call for the carrier that the customer did not want to make in the first place. This then results in the customer more than likely not having a positive experience with that call center interaction as they went into that session already negative on the experience.
“There are just too many steps involved so when they have to call that is a bad session to begin with and is hard to make positive,” Zohar said. Mark Mortensen, lead analyst for Analysys Mason’s Customer Care, Service Fulfillment and Digital Economy Software Strategies research programs, added that it was imperative for telecom operators to fully understand where their customer has already been in order to ensure that their future interactions can look to turn around any sort of negative impression.
“CRM systems have the ability to know what a customer was doing before they call in,” Mortensen said. “It does require a huge increase in back-office sophistication to extract this information, but the ability to understand what the person has done during a transaction is something that needs to be shared in near real time across an organization.”
Taking CRM social
While traditional touch points remain important to the overall CRM message, consumers are increasingly turning towards social media channels as a medium in which to interact with companies. Mobile operators have moved towards fulfilling this desire, though the efforts have proved mixed.
According to a Coleman Parkes consumer study, 50% of consumers said they would like to communicate with their service providers via social media, but 75% of these communication attempts go unanswered. In addition, when using social media channels, consumer expectations are high.
Responses within one hour are considered an acceptable time frame to address issues raised through social media channels. Unfortunately, 80% of frustrated consumers end up calling into a call center for support when their attempts at social media contact get no reply.
Service providers seem open to using social media channels, but it will require some changes to the existing business model. Many people don’t use their true identity in social media, but that is required for a service provider to address issues. In order to have more than a generic reply come back, customers need to be willing to share who they truly are. The question is: are they?
The Coleman Parkes study found that 42% would be willing to share their true identity in order to receive service online as opposed to having to go through a call center experience, which can sometimes be very lengthy. The exchange of identity is required in order to conduct a two-way interaction on the channel the customer initiates contact on until it’s time to move the discussion to a more private channel.
How to handle these interactions is one of the most basic problems for mobile operators looking to fold social channels into their CRM platforms.
“Most carriers I talk to say their first inclination when dealing with public social interactions is to get them off the airwaves. They don’t want that dialogue out there for everyone to see and want to move it into a private channel or e-mail to resolve the issue,” said Amdocs’ Zohar, who explained that this was the wrong way to approach the social challenge. “If you can solve the problem why not show that off to everyone?”
On a deeper level, integrating social has a number of challenges that continue to trip up deployments. As already mentioned, being able to verify a user remains difficult in most instances. A number of platforms are already in place that allow for mobile operators to trace interactions across various social channels in order to pinpoint a single person, but those models are still works in progress.
“The challenge we have seen is that identifying on social is hard to connect to the BSS records for most operators,” Zohar said. “You have to somehow do a social identity match.”
One way in which carriers can look to verify users is through a private instant message interaction that provides a carrier with a way to verify a possible customer. Of course, this method requires getting approval from the customer, though Zohar explained that “if you catch them at the right time, then they do agree.”
That, of course, is a risky proposition as operators typically don’t like to rely on luck in terms of how they interact with potentially un-happy customers. However, this is an issue that operators must tackle as consumers continue to gravitate to social channels.
“When it comes to mastering social, it’s always difficult to find out if a person is truly having a bad experience, or just having a bad day,” said John Feland, founder and CEO of Argus Insights.
These inherent challenges of social channels have led some downplay the actual worth of integrating them into CRM platforms, or others to put off such plans.
Jay Emmet, SVP at Amdocs GM at its OpenMarket division, said he thought social channels make sense from a consumer interaction perspective, but were perhaps not quite professional enough for the enterprise environment.
“I remain suspect of enterprises being able to exploit social channels,” Emmet said. “I don’t want to interact with my bank or Amazon on my social networks.”
C Spire’s Croft said that while the carrier strives to support as many platforms as possible in terms of interactions with its customers, social remains one area where the analytics challenges remain prohibitive.
“We recognize we need to meet our customers where they are,” Croft said. “If that’s social, then we will be there. We have been involved in social channels for years and have social media advocates
on a full-time basis. But, in terms of integrating this without analytics platform that is a nut we have not quite cracked yet. It requires a lot of privacy controls that is still something that is not part of our analytics platform.”
Despite the increased capabilities embedded in new technologies and social, some also see continued growth in CRM solutions using legacy systems. OpenMarket recently launched a new CRM platform tapping into messaging services. Emmet explained that while messaging might not be the sexiest option on the market, it has proven to be effective.
“There is a reason that text messaging has continued to show exponential growth in the enterprise space,” Emmet said. “Everyone has it; it works on everything and every device … every human being is a trained user.”
Emmet added that while applications have grown in use, there is still a learning curve involved, which can be especially troublesome for international enterprises that have employees and customers spread across the globe.
“There is a lot of pressure at some enterprises to have the latest and greatest,” Emmet said. “I can talk until I am blue in my face, but there are still some that think they need to have an app.”
Software/virtualization impact on CRM
One technology that is expected to have a significant impact on CRM platforms is the move towards virtualization, which typically looks to move hardware-based services into software. For CRM, this is seen as a natural as most CRM platforms already take advantage of software or software-as-a-service deployments, with further virtualization allowing service providers to trim operating costs, increase agility and improve scalability.
“Virtualization does make it easier moving forward,” explained TM Forum’s Rich. “It can move processing power to the things that are happening. … This helps not just in scalability, but also in flexibility.”
Rich added that by moving processes closer to the edge or end-user, virtualization can help companies place critical services further away from potential bottlenecks in the core of their operations.
“Virtualization will allow for these processes to also be handled more rapidly, and can speed up changes that are made in terms of interactions with customers,” added Rebecca Sendel, senior director of TM Forum’s Business Assurance Program.
With software and virtualization seen as ways to boost CRM systems, telecom operators need to make sure that they are following sound models for their deployment needs. In setting up a system today, factors such as scalability and upgradeability need to be considered or those systems can be quickly outdated.
“Typically software models take 12 months to build and are over-built for most instances,” explained Scott Holden, VP of platform marketing at Salesforce.com. “
The world of the front office is changing faster than ever before so thinking you will have a platform that is great today and will remain that way going forward is foolish. The pace of change and innovation is just going to increase.”
Analysts noted that mobile operators have begun to embrace the capabilities embedded in the move towards virtualization and software. A number of analysts cited work by a telecom operator in Hong Kong that operates a CRM platform allowing the company to track where all of its high-value customers are at all times and thus ensure that they are constantly able to find a strong connection to its network.
Domestically, C Spire said its move towards virtualization of CRM has been fed off the telecom operator’s internal moves to virtualize its sales platform. This has allowed a relatively small operator to become leverage virtualization to bolster its operations and competitive position.
“Most of our internal customer sales are in a virtual environment,” noted Croft.
“We think of ourselves as a pretty advanced company and we run our systems on the same virtual environment that we offer to our business customers.”
Virtualizations is also seen as being able to boost the real-time requirements of CRM platforms, with telecom operators able to access cloud-based information across what are traditionally siloed segments of the organizations.
“The key to creating this unified experience is bringing together multiple disparate silos of information in real-time,” said Ben Parker, principal technologies at Guavus. “A better customer experience will be driven by the integration of CRM, network and operational data, but this requires a new data fabric, one that brings together data in motion with data at rest and can handle data at massive scale. With streaming analytics as a core piece of the CRM strategy, [mobile network operators] can provide proactive customer assistance, implement per subscriber policies, deliver highly personalized services and create targeted up-sell and cross-sell offers.”
Tying in big data through CRM platforms using virtualization is also seen as a potential boon for increased use of analytics and Hadoop to take deeper dives into the information mobile operators have running across their networks.
Sheryl Kingstone, research director at 451 Research, explained that currently CRM platforms are not ready to handle such tasks, though such moves appear to be inevitable.
“Getting the information out of the network and into a usable format is still a task that modern CRM platforms are not really doing,” said Kingstone. “They are doing it to an extent with CEM and big data to feed strategies for customer engagement, mostly looking at keeping tabs on their most valuable customers. If you look at moving this into the core CRM systems, you need to look at advances like Hadoop or others to really deal with these vast amounts of data. … You have to make sure you are using the right tool.”
While virtualization is seen by some as an opportunity to enhance CRM platforms, others note that the challenge will remain in making sure the information moving across virtualized platforms is actionable. The term “bad data in, bad data but” was referenced by some as an issue that will impact CRM systems regardless of their home.
“Virtualization is only good if you are doing so with a service that works well,” Kingstone explained. “What has failed in the past is the integration points and business process.”
Emerald Insight noted in a recent report that “successful implementation is elusive to many companies, mostly because they do not understand that CRM requires company‐wide, cross‐functional, customer‐focused business process re‐engineering. Although a large portion of CRM is technology, viewing CRM as a technology‐only solution is likely to fail. Managing a successful CRM implementation requires an integrated and balanced approach to technology, process and people.”
Further taxing integration is simply the fact that with more advanced network and equipment that can pull more data out of those networks, mobile operators are still forced to sift through massive piles of information. While technologies like Hadoop are expected to help with the processes, there is still a lot of complexity left in these systems.
“IT virtualization may address some things along the lines of cost of ownership, but does not cut down on the complexity,” noted Zohar, who echoed previous comments that despite this added complexity, mobile operators need to remain focused on ensuring that they are providing a uniformed message across all of their customer contact channels regardless.
“In the end, if any of these processes make it more difficult for consumers to interact with their mobile carrier or add complexity to the processes mobile operators have in place to the detriment of how they interact with customers, then these systems are not worth the cost or time to deploy,” Zohar said.
Regardless of the challenges, the importance of CRM continues to grow for mobile operators thus the need to overcome those challenges will drive further advances. There is too much at stake both operationally and competitively for CRM systems to fall behind.