How telecommunications providers can reboot the customer experience

1. IBM
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Restoring Connections
How communications service provides can reboot the customer
experience
IBM
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2. IBM
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Customer experience is the next competitive battleground; focus on
customer experience will help CSPs to outperform competitors
According to IBM’s global telecom consumer survey CSPs need to
significantly improve in this area
CSPs should focus on three key strategies:
• Reset the overall customer experience
• Create innovative, compelling products and services
• Deploy smarter capabilities to better glean customer insight
CSPs must take action to reconnect with their customers by
understanding and delivering what customers really need and delight
Executive summary

3. IBM
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2014 Global Telecom
Consumer Survey
2013 Global C-Suite
Survey
IBM surveyed 22,000 consumers in 35
countries and 218 CSP C-suite executives

4. IBM
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Agenda
Customer experience as the next competitive battle ground
Preparing for a future in customer experience
• Reset the overall Customer Experience
• Create innovative compelling products/services
• Deploy smarter capabilities to better glean customer insight
Questions to consider

5. IBM
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Customer experience as the next
competitive battleground

6. IBM
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CSPs are facing tough times as competition
is intensifying
Consumers have
nearly unlimited
choices
CSPs are offering
similar services at
similar prices
New entrants
provide alternative
services

7. IBM
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Experience
with the
Brand Experience
with the
Product
Experience
with the
Service
Overall
Customer
Experience
The combination of these three
attributes result in the overall
Customer Experience, which
reflects the degree of connection
between customers and the
provider
Customers now expect quality experiences

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40%
38%
29%
21%
20%
55%
50%
46%
46%
9%
8%
21%
32%
35%
50%Would TELL OTHERS about the bad experience
Would COMPLAIN to my telecom provider
Would DISCOURAGE OTHERS to use this provider
Would post a NEGATIVE REVIEW or comment ONLINE
Would COMPLAIN on SOCIAL MEDIA
Always/Often Regularly/Possibly/Sometimes Never
What would you do in case of a NEGATIVE experiences with your telecom provider?
They share their experiences with each other
rather than with their provider

9. IBM
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CSPs are not leaders in customer experience
by any measure
Lowest among seven industry groups (US)
No CSP in Top 100 (US)
No CSP in Top 50 (US)
No CSP in Top 50 (WW)
Wireless Industry ranked 44 out of 50 industries (US)
No CSP in Top 25 (US)
Only one CSP in Top 100, O2 at #46 (WW)
No CSP in Top 50 (WW)
Net Promotor Score
Customer Experience
Customer Loyalty
Customer Simplicity
Customer Satisfaction
Customer Service
Retail Experience
Innovation

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Advocates have a
higher wallet share and
are highly
complimentary of the
provider capability
Apathetics are
generally passive
participants
susceptible to
competitor offerings
Antagonists have low
wallet share and high
support costs and are
prone to bad-mouth the
provider
16% 37% 47%
Only one-out-of-six customers are real
advocates for their provider*
IBM’s Advocacy Index measures responses to 3 key statements:
Likelyhood to recommend, Purchase Intent, and Staying Intent
* Based on the results from the 2014 global telecom consumer survey

11. IBM
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29%more
54%
Outperformers
42%
Underperformers
43,0%
14,5%
-33,9%-40%
-20%
0%
20%
40%
60%
Customer
Experience
Leaders
S&P 500
Index
Customer
Experience
Laggards
Customer Experience Leaders
outperform the Market
(6 years stock performance of
customer experience
leaders vs. Laggards vs S&P 500
(2007-2012)
Outperforming companies are focusing more
heavily on improving the Customer Experience
Source: 2013 IBM Global C-suite study Forrester, 2013, The customer experience bar is higher than you realize
Focusing on improving the
customer experience
42%
54%

12. IBM
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CSPs should change from an inside-outside
orientation to an outside-in orientation
• Put the experience from the customers’ perspective central
• Start at the top and drive vision relentlessly down through the
organization, including passion, structure, processes, measures, and
incentives; customer segmentation and selection
• Make customer experience a core tenet of the organisation’s
culture
• Be aware of any disconnections between marketing, IT,
customer service and operations
• Focus on actively integrating physical and digital channels

13. IBM
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Reset the
overall
Customer
Experience
Create
Innovative
Compelling
products
and services
Deploy
Smarter
Capabilities
to better
glean
Customer
Insight
CSPs must take action to reconnect with their
customers

14. IBM
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Preparing for a future in customer
experience
Reset the
overall
Customer
Experience

15. IBM
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Get the basics right
Consistently deliver the
experience
Differentiate the experience
Delight customers
Years
Loyalty
Make sure the fundamentals (delivery
comms services, billing, customer
service, etc) are done right
Consistently deliver the same message
and performance through all touch points
and lines of business
Do something distinctive for your
customers to stand out a crowded
market
Positively surprise your customers with
an experience that helps form an
emotional engagement
The journey to delighted – and loyal –
customers starts with getting the basic rights

16. IBM
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Network
Coverage
Network
Performance
Transparency
Tariffs
Transparency
Billing
Accuracy Billing
Customer
Service
Value for
Money
Etcetera
GET THE
BASICS
RIGHT!
Quick and
Effective
Responses
Not having to
repeat
Information
Get the basics right
Many factors that drag down customer
satisfaction are those that CSPs can get right

17. IBM
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52% 54% 56% 57% 58%
62%
CUSTOMER
SERVICE
Transparency/
ACCURACY of
BILLING
COLLECT data
effectively, I do
NOT have to
REPEAT
Giving QUICK &
EFFECTIVE
RESPONSES
VALUE for MONEY Providing
OPENNESS
Customer dissatisfaction w.r.t. fundamentals
(Consumer survey 2014: 22,000 consumers in 35 countries)
Get the basics right
Average to Poor
However, there is still a long way to go to get
the fundamentals right for CSPs

18. IBM
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4choices for a company to stand out in a crowded market
An enduring idea What differentiate them
How they are primarily
experienced
Who they serve
Differentiate the experience
A great company makes deliberate choices in 4
areas to distinguish from competition

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Based on an
enduring idea:
Differentated by:
Experienced
through:
Serves:
Competition
Happiness
in a bottle
Thinking
differently
Innocence Exhilaration
Performance
Iconic
product
Steve Jobs’
ethos
Storytelling
German
Engineering
Nike’s
advertising
Social
interaction
Design of its
products
Theme park
and movie
Performance
vehicles
The athlete
in all of us
Optimists The contrarian
The child
in all of us
The
adventuresome
driver
Differentiate the experience
CSPs should make deliberate choices in these
four areas as many strong brands have done

20. IBM
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27% 28%
44%
21% 19%
13% 13% 14%
9% 8%
22% 23%
19%
32% 31%
6% 7%
4%
9%
7%
21%
18%
10%
17% 18%
7%
4% 4% 6%
11%
0%
10%
20%
30%
40%
50%
Product/Service
INFORMATION
Personal info / service
CHANGES
COMPLAINTS/Problem
solution
Special offers/LOYALTY
programs
FEEDBACK on
experiences
Phone call with Call Center
In-person (Face-to-Face)
Email
SMS
Online via CSP website
Mobile APP
Social Network
What is your preferred channel of interacting with your
provider?
(Consumer survey 2014:
22,000 consumers in 35 countries)
Source: 2014 IBM Global Telecom Consumer Survey preferred channel of interacting with your telecom provider?
Consistently deliver the experience
Consumers like to interact with their provider
using a wide range of channels, ….

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61%
44%
44%
38%
35%
My Telecom Provider allows me MULTIPLE WAYS to
interact and communicate with them
My Telecom provider provides CONSISTENT /
seamless experience syncronized ACROSS
channels and devices
My Telecom Provider USES THE INFORMATION it
already has about me rather than asking me to
provide it repeatedly
My Telecom Provider enables me to provide
FEEDBACK or to provide input to develop new
communication products and services
My Telecom Provider uses SOCIAL MEDIA in an
effective way to engage with me
CSPs seem to
have challenges
in coordinating
customers’
interactions
across channels
Consistently deliver the experience
Good to Excellent
….but most of them experience that consistency
across channels is lagging

22. IBM
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Seek Opinion
Reward
Loyalty
Enable
Customization
Proactively try to
Improve
Overdeliver, not
Overpromise
Provide
Compelling
Services
Services related
to context
Etcetera
DELIGHT
CUSTOMERS
Resolve Issues
Fairly
Personalize
Services
Delight customers
Customer delight involves delivering an
experience that forms an emotional engagement

23. IBM
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How do you rate your provider
w.r.t. the following aspects?
(Consumer survey 2014:
22,000 consumers
in 35 countries)
Delight customers
73%
68%
64% 63% 62%
60%
58%
SEEKS OPINION to
develop products/
services
PROACTIVELY
tries to improve
user experience
Enables
CUSTOMIZATION
products/ services
PERSONALIZED
and consistent
service
Services related to
customer's
PREFERENCES
Resolving issues
FAIRLY
Services related to
customer's
LOCATION
Average to poor
However there is still a long way to go for CSPs
to reach this level of customer insight

24. IBM
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• Make sure the fundamentals are mastered
• Define how you want to differentiate the experience in a
crowded market
• Create an omni-channel experience, that includes self-
service, social and mobile
• Develop a “mobile first” strategy
• Delight customers by providing an experience that forms
an emotional connection
Recommendations

25. IBM
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Preparing for a future in customer
experience
Create
Innovative
Compelling
products and
services

26. IBM
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CreationofValue
Meaningful
Leaves the user craving for more by creating a
compelling and transformative experience
Emotional
Creates emotional connection by exceeding
expectations
Contextual
Makes life easier through new features that
augment the user’s lifestyle
Functional
Performs basic tasks as expected
In a competitive industry, it is key to design pro-
ducts and services that leaves users crave for more

27. IBM
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Include the Voice of the CUSTOMER; enable them to
provide ideas and feedback
Innovation should be fostered and benefits from a
structured approach (social business, jams, etc.)
An extensive network of partners brings new perspectives
and complementary competences
Leverage the internal Wisdom of the Crowds; enable
employees with innovation skills to contribute
Innovation goes beyond products, focusing on all aspects
of the business model and customer experience
“Innovation/out of the
box thinking is key”
MD Telecommunications
Company, Finland
“The successful
Telcos of the future
will weave creativity
into their DNA”
Telecommunications CEO,
Ireland
It is crucial that culture, mindset, people, processes
and infrastructure enable a new pace of innovation

28. IBM
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Greater collaboration with customers translates into greater financial success
Source: 2013 Global C-suite survey : n=1,011
88%
Outperformers
39%
Underperformers
“Consumers now have a voice. And the fact
that consumers can be creators, producers
and distributors means they can push back
against brands to punish them for their
socially irresponsible behavior or reward
them for their responsible behavior.”
Simon Mainwaring, Founder We First
54%more
Outperforming enterprises more often collaborate
with their customers
39%
88%

29. IBM
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Telecommunications CxOs plan to collaborate much more extensively with customers
88%
3–5 Years
38%
Today
“We focus on increased
collaboration with the
customer to understand their
needs and expectation.”
CMO, Telecommunications, Turkey
IBM 2013 Global C-suite study: Telecommunications n=207
132%
more
88%
38%
Close collaboration with customers has also
become a clear ambition for telecom CxOs

30. IBM
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84%
16%
Like to
interact
with their
provider
to help
them to
improve
of respondents like to
interact with their
provider on improving
an existing product
60%
Not
interested
Topics on which customers are willing to provide feedback or to engage
Source: 2014 IBM Global Telecom Consumer Survey,
60%
56%
38%
26%
22%
22%
21%
6%
IMPROVEMENT EXISTING
Product/Service
IMPROVEMENT CUSTOMER CARE
DEVELOPMENT NEW Product/Service
FEEDBACK on COMMUNICATIONS to
Market
FEEDBACK on OVERALL STRATEGY
IMPROVEMENT of Existing
CAMPAIGN
DEVELOPMENT of New CAMPAIGN
Other
And most customers are willing to provide
feedback or engage with their provider to improve

31. IBM
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• Focus on describing future customer needs and how to
meet these needs
• Include the entire organization, partners and customers in
creating new products and services
• Adopt a faster pace of innovation, i.e. development cycles
of days/weeks
• Develop breakthrough, disruptive or enduring business
models
• Invest in educating and aligning people
Recommendations

32. IBM
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Preparing for a future in customer
experience
Deploy
Smarter
Capabilities to
better glean
Customer
Insight

33. IBM
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ANALYTICS
SOCIAL
MEDIA
SOCIAL
ANALYTICS
Analytics/ Big
Data to
anticipate
customer
behaviors and
preferences
Social Media
to get closer to
- and engage -
with customers
Social Analytics to:
• identify proximities and relationships between people
• understand sentiment by social media listening
Providing exceptional customer experiences
requires deployment of smarter capabilities

34. IBM
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180%
more
84%
30%
84%
3–5 Years
30%
Today
42%Only
of consumers surveyed strongly
(12%) or moderately (34%) agree
that their provider listen to them
and collects the right amount of
information to meet your
communication needs?
Most telecom CxOs realize that they have to
understand their customers better
High level of customer understanding
IBM 2013 Global C-suite study: Telecommunications n=207
ANALYTICS

35. IBM
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62%more
47%
Outperformers
29%
Underperformers
“For a high level of customer understanding
it is key to build the analytics/big
data capabilities, and gain profit
from them.”
CMO, Telecommunications, Poland
29%
47%
The more deeply an enterprise understands its
customers, the more likely it is to flourish
High level of customer understanding
Source: 2013 Global C-suite survey : n=1,011
ANALYTICS

36. IBM
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Customers who engage with companies
over social media are more
loyal and they spend up to
40% more than other consumers
64% of social media users
want to see an increase in companies
using social media to
customer questions
and complaints
44% of social media users are
willing to help brands
using social media
39% of social media users
follow companies or products on
social media sites
Integrating social media into a comprehensive
multi-channel strategy will help to increase loyalty
SOCIALMEDIA

37. IBM
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The provider using SOCIAL MEDIA in
an effective way to engage with you
Preparedness for
Social Media
Strongly agree
Moderately agree
Neutral or disagree
Underprepared
Prepared
71%
66%
34%29%
2011 2013
66%
25%
9%
TheTelecom CMO The Customer
Source: IBM 2013 C-suite survey: 2014 IBM Global Telecom Consumer Survey,
SOCIALMEDIA
However the rate of change in social media seems
faster than many CMOs can cope with

38. IBM
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• Invest in analytics and other capabilities to help generate
intelligence about customers, and insights on which the
company can act
• Design the social channels and platforms that customers
want
• Deploy social network-focused analytics to identify
influencers and mine social media to access customers’
honest views, values and expectations
Recommendations

39. IBM
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• Lead from the top
• Build customer-centric measures
into the performance measurement
and compensation of every executive
• Destroy silos
Above all, CSPs should change the culture

40. IBM
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Questions to consider

41. IBM
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 Is the entire C-level management team committed to a renewed focus
on the customer experience?
 What are the key elements of your customer experience strategy and
how are those elements anchored in your organization?
 Are you able to deliver a unified experience across all channels?
 Do you know the factors that drive value and the perception of a
memorable customer experience?
 In what way do you tune into the voice of your customer to anticipate
future needs and create a richer customer experience?
Are you ready? Ask yourself these questions

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