InfoComm Review: Tailor made


As the various players in the telecom space assemble and roll out their triple- and quadruple-play bundles, convergence is becoming an everyday reality for consumers. As companies strive to manage expanding product offerings, diminishing competitive differentiation, and increasingly powerful and demanding customers, the winners will be those telcos that convince their customers to buy and keep more products and services as well as meet and exceed their customers' expectations at all critical customer touch points. Faced with this challenge, traditional product-oriented organizational structures and systems are simply no longer up to the job. An alignment of the customer relationship management (CRM) program and supporting organizational structures, processes, and technologies is required to achieve a sustained excellence in customer experience, service, and responsiveness.

After years of talk, convergence is finally happening across the infocomm industry. Cable television providers are offering voice, high-speed Internet, and even mobile services. Incumbent telcos are rolling out IPTV. Retailers and handset resellers are offering broadband packages. Mobile operators are selling and delivering music and video entertainment.
For the customer, it's great: an unprecedented explosion of choices and new services. For telcos and other providers, it's a new world of competitive opportunities and threats: a whole new market approach and mind-set are needed. At the core of this mind-set has to be a clear and relentless focus on the customer.

Companies that do not actively embrace customer centricity will continue to deal with increased customer churn; declining customer satisfaction; employee engagement challenges across critical, front-line, customer-facing roles; decreasing market share; and an increased cost to serve as a result of product-segregated business processes. As a result, the challenges of understanding customers' values, needs, and decision drivers, along with having a holistic view of the customer's relationship with the company, have intensified--making customer focus a strategic imperative.

An integrated customer experience

The sheer scale of the impact of convergence on how telcos go to market is becoming clearer by the day. For many years, telcos have talked about being focused on customers; however, organizationally they remained aligned internally along separate products. To compound this further, successive waves of product launches and corporate acquisitions have been "bolted on" rather than integrated around a single view of the customer. All too often, activities from product development via sales and marketing to billing, customer service, and call centers have remained rigidly organized around products rather than customers.

Convergence is sounding the death knell for that approach. Instead of selling one product to many customers, companies now need to sell bundles and solutions to each individual customer and ensure that customers' needs are satisfied at each stage of their life cycle to engender loyalty. Research suggests that acquiring a new customer costs several times as much as selling an additional product to an existing customer, and that customers who buy a bundle of products are less likely to switch providers. So companies that sell more integrated solutions to a base of increasingly loyal customers can indeed create a virtuous circle that will drive increasing revenues and, ultimately, greater shareholder value.

The company's ability to understand and anticipate changes in the customer's needs--customer centricity--should be a core objective.

Creating a differentiated experience for customers, across all customer touch points, is what is required. This differentiated customer experience must be delivered through appropriate organizational structures, embedded in the underlying business processes, and enabled by the supporting technologies.

Forward-looking telcos are now preparing for that world by looking at this opportunity from the customer's perspective, and realigning their operations end-to-end around the customer's current and future needs.

What is customer centricity?

In our view, the close connection between customer centricity and customer relationship management (CRM) is key to a telco's ability to maximize shareholder value.
The fundamental principle underlying customer centricity is a recognition that customers--and their needs, wants, and aspirations--differ and are not static.

Two factors will determine the customer's potential and actual value to the provider over the course of the entire relationship. One is the way the customer's needs and propensity to spend change over time. The other is how well the provider anticipates, monitors, and responds to ongoing change in the customer's viewpoint with appropriate service propositions. So, after acquiring the customer, the onus is on the telco to make sure it always offers the right services through the right channel at a price that this customer regards as reasonable and in the manner in which the customer wants to interact with the company. If it fails to do this, the customer eventually will interact with another provider that better meets those needs.

Through analysis centered on the customer (i.e., customer profitability, customer segmentation insights around unique needs for products and services), an organization can begin the process of enabling CRM capabilities that are designed to satisfy customers' needs and, thereby, consistently deliver a superior customer experience.

In short, companies that adopt a customer-centric strategy improve their position through deeper understanding of their customers' needs. The result is a unique competitive advantage that insulates against disruptive threats. The more customer centric a company is, the more time its competitors need to respond to its moves and the more likely it is to win new customers.

Customer centricity challenges

Indeed, the prize is large; however, as telcos embark on this journey, they face several challenges. The first challenge is merely knowing their customers -- understanding what their customers want and how they want to get products and services.

The second challenge is developing the agility to apply this understanding to their offerings and operationalizing these needs throughout the customer experience life cycle.

The third challenge is overcoming the constraints of legacy, product-centric organizational structures, processes, and systems and facilitating customers' needs and delivery of services.

The fourth challenge is meeting rising time pressure, as speed to market becomes vital to seizing customer demand.

CRM remains an important enabler in today's market, where focus on the customer experience is critical. The full benefits, however, can be achieved only by driving CRM initiatives from a customer-centric perspective and supporting intelligent and responsive management of the company's channels to market.

Operationalizing customer centricity

In the multiproduct, multichannel world now emerging, the traditional fragmented and reactive approaches to CRM will no longer work. Telcos must overcome their challenges through an integrated process and program of work that are based on a solid understanding of customers and that take action to mitigate the known obstacles.

As with most proven, successful approaches, the starting point must be a strategic focus with clearly defined required business outcomes. The journey starts by setting a compelling strategy that includes a focus on the opportunities in the marketplace, then identifying meaningful value propositions, aligning them with an execution path, and defining measures of success.

For any company to claim they truly understand the needs of their customers, they must gain a good understanding of their client base through sound reporting and analytics capabilities, customer surveys, commissioned primary research, and segmentation analysis.
Having a data enablement capability that readily delivers "whole-of-customer" data that are consistent, accurate, and timely will serve as the vital basis in moving toward operationalizing customer knowledge and relationship management. A "single view of customer" is critical and must be visible and accurate at all customer touch points. Knowing all the services that the company provides to the customer allows for a more integrated relationship with and experience for the customer.

To truly embed this differentiated customer experience into all customer touch points, significant efforts must be made to ensure that it is operationalized throughout the customer life cycle.

Both the sales force and the customer service representatives must understand the differentiated customer service that the company needs to deliver, and they must be enabled to deliver that experience. Sales agents must be provided with training in a specific segment that covers the needs and behaviors of the segment and clearly translates the service offerings made available to them. Customer service representatives must understand how varying needs can be met by a select few customer value propositions or approaches to customer care and must cross-sell/up-sell opportunities.

Decision tools and the appropriate decision rights and delegation authority are required for enabling front-line employees to take the appropriate action on behalf of their customers. Customer-driven routing and integrated voice response strategies, along with tailored scripts and call flows, also will be required in accommodating and meeting the needs of unique customer and segment differences.

These efforts will take the organization from having a reactive customer response posture to operating with a proactive, engaged workforce that is able to demonstrate familiarity with each customer at each critical touch point. The level of investment an organization will have to make will vary based on many factors, such as offer complexity, markets and product market maturity, and the flexibility of the underlying platforms supporting these functions.
Clear measures of success--such as service quality, presentation rates, and sales conversion rates--will need to be embedded, providing real-time feedback throughout the entire customer delivery process.

Upon embarking on any of these efforts, companies must overcome the usual obstacles in getting access to critical customer information from legacy systems and repositories. Customer insights can be derived and continually updated only by having a whole-of-customer view.

Difficult access to information needlessly prolongs interaction with the customer and influences customer satisfaction. And if a skilled customer service representative manages to retain the customer's attention through such activity and secures a commitment to sign up for a new service, the order management process also may be needlessly prolonged. In these situations, the telco must fully evaluate a number of operational excellence, process redesign/evolution activities.

Convergence is transforming the dynamics of the industry and requiring companies to embrace new approaches to differentiate themselves and drive growth. The new product niche players and new market entrants are doing this well. Focused mobile and Internet service providers have been more nimble than incumbents in their ability to respond quickly to customers' needs.

Mike McGrath is a partner and Ash Bassili, Quentin Orr, and Gerald Adang are directors in PricewaterhouseCoopers' Information and Communications Industry group. For more information, contact Mr. McGrath by phone at [61] (3) 8603 2874 or by e-mail at; Mr. Bassili by phone at [61] (3) 8603 2325 or by e-mail at; Mr. Orr by phone at [1] 267 330 2699 or by e-mail at; or Mr. Adang by phone at [31] 20 568 5964 or by e-mail at

This is an excerpt of a longer interview from PricewaterhouseCoopers' InfoComm Review, Volume 11, No. 2. To request copies of the full publication, please contact Laney Royal by e-mail at