Redefining the Relationshipwith the Digital ConsumerHow communications service providers cantake command of the digital ecosystemby Gene Reznik
The telecom industry is well positioned to connect withtoday’s digital consumer. No other industry has anequivalent number of customer touchpoints, ranging fromcall centers to retail stores, websites, in-home service callsand other modes of interaction.At the same time, many Despite this advantage, telecom Managing this increasingly complexcommunications service providers companies have tended to focus and unequalled web of touchpointsfeel that in the competition for digital their investment on network coverage requires a new mindset. It requiresconsumers, they are operating at a and technology, leaving the customer thinking strategically about how bestdisadvantage compared with more experience as more of an afterthought. to coordinate these touchpoints into ainnovative products and services Poor and fragmented experiences in very memorable, compelling customercompanies. the past have conditioned customers experience that will keep customers to look elsewhere for good sales and coming back. service. This has made room for othersThis perspective overlooks the fact to take ownership of the customerthat other industries—from electronics relationship.manufacturing, to retailers, tosoftware/app developers—are not aswell positioned as telecom providers to If telecom providers are to takebenefit from a high volume of customer advantage of their unique positioning,interactions and resulting insights into they must innovate through the insightscustomers’ behavior and needs. Telecom gained from their unparalleled array ofproviders can redefine how to connect touchpoints. These touchpoints providewith the digital consumer, on their multiple opportunities for growthown terms. and innovation with each and every customer contact. Redefining the Relationship with the Digital Consumer 1
Navigating the Digital EcosystemConnecting with the digital consumer The retail industry has developed In order to fully grasp their opportunities,requires, first of all, understanding tailored experiences targeted to telecom providers likewise need to takecustomers’ needs, buying styles and different customer segments. New account of the multiple levels of thepreferred touchpoints. Telecom providers programs have been introduced, such as digital ecosystem, each of which offershave tremendous opportunities to loyalty rewards, to increase the number different opportunities for customerseamlessly integrate the customer of interactions. And certain retailer- engagement (see Figure 1).intelligence they extract from across selected specific products have beenthe many channels at their disposal. made available only in store, in order to First, there is the network, the coreBut to do so, they must harness the push online shoppers across channels. of telecom providers’ offering. This isgrowing quantity of information This multi-channel transformation a relatively predictable business, withavailable from these multiple touch- is paying results in the frequency of very traditional ways of thinking aboutpoints, analyze it, and apply it to customer interaction and customer issues like infrastructure, scale anddevelop a tailored experience that engagement. Just imagine if retailers capital. It’s also a regional business.reflects customers’ needs and had the customer data and volume And customer contact that focusespreferences and that is consistent of interactions enjoyed by a telecom strictly on the network is likely toacross all channels. provider! be quite limited in its scope. New network-based services, such as location-aware applications, or digital home connections (e.g., remote DVR) are emerging; but many can be run over-the-top, rather than relying on the telecom provider’s infrastructure.2 Redefining the Relationship with the Digital Consumer
Figure 1: The Emerging Digital Landscape Internet support Phone support At-home support In-store support CRM/Channels EmergingSatellite Network Digital Internet Landscape Services Cable Entertainment On-air Video Fiber optic cable GamingThe services business is very different, venture capital. We’ve also seen a third And although many companies haveand quite frequently global. The dimension. As services have evolved, grown their businesses by expandingaddressable market for a globally sales, tech support and even retail have into the physical retail space, consumeroriented consumer electronics and become core elements of connecting electronics and Internet/Web 2.0Internet services innovator is estimated with a digital consumer. New monetiza- companies have difficulty supportingto be nearly seven billion consumers. tion models in the areas of premium the consumer. They are not in aWhen these companies make new technical services show that money position, for example, to dispatchinvestments, they think about reaching can be made from the services business. technicians to the customer’s home.as many customers as they can. This is a major differentiator forBut when companies in the telecom For example, although proliferation of communications service providers.industry think about innovation and connected devices and new Internet-making investments, they’re traditionally or Cloud-based services is driving CRM and channels, in short, offerthinking about their constrained exciting new applications and benefits many new dimensions for consumergeographic footprint. Telecom service to consumers, this all comes at a cost. interaction. As network technologyproviders are structurally challenged Consumers are struggling to cope and high-speed access become theto compete in the global dimension with the resulting complexity, which base case, customer experienceof the services business. is exacerbated by the increasing pace investments in channels/CRM will be of change and innovation. Someone the new business case.At the same time, the services business needs to hold the customer’s handis a highly unpredictable one, frequently and provide premium technical servicesdriven out of innovation centers to manage all these new devices andlike Silicon Valley and funded by services. Redefining the Relationship with the Digital Consumer 3
Defining the Business: Stick with the Core, or Build on It?Value-added Services Performance Enabling Figure 2: Ways of Providing Value to the Digital Consumer Your Digital Integration Lifestyle Value-added Services Performance Enabling Your Digital Support Integration Lifestyle Value-added Services Performance Support Enabling Sales Your Digital Integration Sales Lifestyle Branding Reselling Certification Other Branding Reselling Certification Other Support Service Provider-supported Solutions Service Provider-supported Solutions There are different ways in which telecom invest in each new innovative service, providers are well positioned to add value providers can respond to this emerging Salesto their locally driven capital plan. due through financing due to their large asset digital landscape. As networks become and infrastructure base. increasingly pervasive and consistent, So one dimension of growth is to enabling services to move to a cloud determine how the telecom industry Clearly, providing technical support— computing approach, the services them- Branding can be relevant across all these digital Reselling of helping to set up and in the sense Certification Other selves are becoming the basis of differen- platforms. That approach can be applied manage the digital home—will be a major tiation and competition. One extreme to virtually any digital device or solution; opportunity for players in one or more response to this development is for telcos in most Service Provider-supportedsectors. Whether that support will cases, telecom providers can use Solutions to believe they need to focus on their Applications Programming Interfaces resemble today’s premium technical network, and that all services need to be (APIs) to integrate these platforms with services model is not clear; but offering delivered by third parties. But there’s also their own services. Over time, the telecom support, and providing service across a full a second way of thinking about this issue, industry is well positioned to assume an range of devices and platforms, is going to which is illustrated by Figure 2. increasingly larger role in the platform- become increasingly important over time. based dimension of the digital ecosystem. In this mindset, there are two dimensions. Integration, as we’ve noted, is a key The first dimension focuses on the The second dimension is value—the opportunity for every one of these digital evolution of digital platforms—devices value-added services that telecom platforms. Using APIs to integrate them and other solutions—over time. Some of companies are positioned to bring to the with telecom industry services is a distinct these solutions the telecom providers will consumer, beyond the provision of basic area of possibility. choose to brand and develop themselves; network services. some of them they will resell; and some And enabling performance—making of them they will certify to work over What do you do once you connect the sure these platforms work well for the their networks. Telecom providers must consumer to the home video game consumer—is also key. By owning the get smart about their choices across this console? First of all, you can sell it and pipes, telecom companies can offer spectrum, as they won’t have funding to finance it, then bundle it with traditional service level guarantees that others can- communications services. Telecom not. This is especially relevant as cloud 4 Redefining the Relationship with the Digital Consumer computing and related services emerge.
Moving Up the Value Chain:Questions for ConsiderationLooking back at the overall digital robust, one-stop shop for communica- Finally, we ultimately expect the Web toecosystem laid out in Figure 1, value tions needs? It’s a different mindset be a key asset for telecom providers inover time will move to the CRM cloud, from where the industry was three to terms of how they connect with theirincluding branded services and sales five years ago. customers. When services are digital,distribution. The telecom industry will the Web will be a key component ofincreasingly add value by both support- And while this overall direction is customer connectivity.ing a broader assortment of consumer straightforward to understand, otherelectronic devices and offering a deeper questions emerge. How do companies Communications service providersdimension of service. Its branding will fully leverage their customer-facing need to realize that they are in a strongincreasingly focus on enablement— touchpoints and assets? How do they position to reach and be relevant toproviding consumers with the technical take advantage of the millions of call- the digital consumer. No other industryresources and value-added services center calls they deal with every single touches the customer in as many waysrequired to make the most of their year? How do they navigate location- as they do. Their assets are far-flungdigital lifestyle. aware insights? How do they leverage and pervasive, ranging from field force and upgrade their retail experience? technicians and Web resources to retailIn this scenario, communications channels and call centers. Given thisservice providers are not competing Technical support is another factor that network of touchpoints that they alonewith product and service innovators. merits close consideration. Globally, control, telecom providers can redefineInstead CSPs are enabling these there is tremendous innovation in this how to connect with the digitalcompanies to better deliver their area. How can telecom providers cost- consumer on their own terms. They canproducts and services, and enabling effectively deliver technical support partner, integrate and support newcustomers to derive the full benefit of directly to the consumer? Should they devices and services in a way that willthese solutions. For example, why not charge customers for the service? both benefit the consumer, and enlargeimprove the service of a messaging Should the support service follow an their own consumer franchise.provider by bundling the offering with insurance model, or something different?other value-added services to make a Should the offer include preventive maintenance? Redefining the Relationship with the Digital Consumer 5