Enhancing Customer Loyalty New Crm Frontier

ENHANCING CUSTOMER LOYALTY - THE NEW CRM FRONTIER Loyalty is a feeling of a connection to and a belief in an enterprise and its proposition. The communication services market in developed countries is now characterized by low GDP growth, stagnating population and high service-saturation levels thus reducing opportunities for pursuing a volume based growth strategy for most communication service providers (CSP). These, coupled with lower trade barriers and a shift towards consumer power have served well to re-define the need for churn management and create ‘loyal’ customers. Ensuring customer loyalty has now become a critical business requirement. CSPs do not wish to be left off the bandwagon; but the focus across most of them has been to implement ‘point based loyalty systems’. This white paper takes a holistic view of ‘customer loyalty’ and why point based loyalty systems should be supported by relevant process re-engineering and data model unification to derive full benefits. It takes the process decomposition for retention and loyalty as provided in the eTOM Version 3.6 and gives a detailed stage-wise roadmap to help CSPs achieve the same.

WHITE PAPER

MANISH KUMAR, SUDEEP SAXENA

Enhancing Customer Loyalty - The New CRM Frontier

Table of Contents INTRODUCTION ...................................................................................................................................................................... 3 ‘LOYALTY’ – THE NEXT FRONTIER FOR CRM .................................................................................................................... 3 INDUSTRY RESPONSE: COMMONLY USED LOYALTY SOLUTIONS ............................................................................... 4 ENHANCING ‘TRUE LOYALTY’ – A SOLUTION FRAMEWORK ......................................................................................... 5 CONCLUSION ....................................................................................................................................................................... 13 APPENDIX ............................................................................................................................................................................. 14 ACRONYMS .......................................................................................................................................................................... 16 REFERENCES ........................................................................................................................................................................ 16 ABOUT THE AUTHORS ........................................................................................................................................................ 16 ABOUT WIPRO TECHNOLOGIES ....................................................................................................................................... 17 WIPRO IN TELECOM SERVICE PROVIDERS .................................................................................................................... 17

Page: Table of Contents

Enhancing Customer Loyalty - The New CRM Frontier

INTRODUCTION The markets in developed countries are now characterized by low GDP growth, stagnating population and high saturation levels thus reducing opportunities for pursuing a volume based growth strategy for most communication service providers (CSP). According to a recent research report, carriers’ average revenue per user (ARPU) is falling because customers have been slow to adopt new data services, competition is driving down prices for voice calls and new customers spend less money than existing ones. These, coupled with lower trade barriers and shift towards consumer power have served well to re-define the need for churn management and create ‘loyal’ customers. While on one hand the absolute number of communication service providers has increased, on the other hand, deregulation and technology evolution have led to a blurring in the distinctions between services offered by various CSPs. So we have cable companies entering the local telephony market and wireless companies offering domestic/international long distance voice & data services. All this has meant an increase in competition as felt by the incumbent players. The mere offering of specific products/services is no longer a differentiator and the resultant price wars have reduced the industry to a ‘commodity’ status. The advent of number portability has removed a critical ‘exit barrier’ thus diminishing the incumbency advantage for large services providers. To add to this, in the developed countries the market for traditional wire line voice services, which has been the mainstay for most incumbent players, is showing signs of slowdown and eventual decline. Thus, volume growth by adding new subscribers can no longer be the strategy of choice for these service providers. The wireless market faces the same dilemma. According to a recent McKinsey report for the US market, churning will account for as much as 80 percent of new customers in 2005. Overall, the impact of this increase in competition, growth in consumer power and reduction in volume growth has been acutely felt by the CSPs who have seen a decline in profitability and erosion of margins/ cash flow. All communication service providers have seen the impact of a stagnating market size, intense competition and lower exit barriers impacting their profitability. The advent of Internet and e-commerce has enabled rapid dissemination of information and in most cases the consumer is only a click away from the competition. Thus, we are now witness to a scenario of increasing propensity to churn and declining ‘loyalty’. Coupled with high cost of acquiring new customers, this now means that customer retention and even more so ‘loyalty’ have acquired increasing importance in the minds of executives.

‘LOYALTY’ – THE NEXT FRONTIER FOR CRM Every CSP realizes that the key to Loyalty lies in how it uses its IT infrastructure and business processes as an enabler for customer loyalty. This has been duly recognized by the TeleManagement Forum in the Enhanced Telecom Operations Map (eTOM) the Business Process Framework Version 3.6. This has formally included the ‘retention and loyalty’ processes which have been decomposed into various functional areas as depicted in Figure 1.

© Wipro Technologies

Page: 03 of 17

Enhancing Customer Loyalty - The New CRM Frontier

Retention & Loyalty

Customer relationship establishment & termination

Customer insight building

Customer risk analysis and management

Customer profile personalisation for relation & loyalty

Figure 1: Retention and loyalty sub-processes in eTOM v 3.6

These processes are aimed at dealing with all functionality related to retention of acquired customers. This paper takes the process decomposition for retention and loyalty as provided in the eTOM Version 3.6 and provides a detailed stage-wise roadmap to help CSPs achieve the vision of retention and loyalty as defined. It also links up the current drive on part of CSPs to implement point based loyalty systems (PBLS) and places that in the context of relevant process re-engineering and data model unification to derive full benefits.

INDUSTRY RESPONSE: COMMONLY USED LOYALTY SOLUTIONS Before we go further, it would help to clarify the generic definition of loyalty. Loyalty is a feeling of a connection to and a belief in an enterprise and its proposition. Thus, loyalty is a highly qualitative factor, a state of mind with respect to an enterprise and its services. Approach – Points Based Loyalty System Since ensuring customer loyalty is becoming such an important issue, CSPs do not wish to be left off the band wagon. The focus across most has been to implement point based loyalty systems (PBLS). These PBLS are typically standalone type initiatives that are short-term promotions to increase the frequency of purchase. Characteristics of such PBLS include: • Point based solutions • Department/function owned • Product focused • Transactional with no real differentiation The process, with which most of us would be all too familiar by now, involves registering frequent buyers into a point’s scheme/ club. The registered members earn points every time they use the services/products of this CSP. These points can be exchanged for additional services, other accessories/gifts with the CSP or its associated partners. The reward is more of a monetary incentive for doing business rather than a positive emotion-producing event.

© Wipro Technologies

Page: 04 of 17

Enhancing Customer Loyalty - The New CRM Frontier

Challenges: Commoditization and Price Competition The challenge with these PBLS is just that – they are essentially glorified ‘discounting models’. To top that, there is an abundance of such me-too programs and the customer is ‘loyal’ only till he/she gets a more economical loyalty program. To take an analogy from the retail industry, a recent study by consulting group Forrester reported that the average North American consumer subscribes simultaneously to more than one such PBLS offered by retail giants. Thus these schemes end up rewarding ‘infidelity’ rather than ‘loyalty’. In addition, most PBLS focus almost exclusively on the recent customer behavior (that is, typically, in the past year), and often fail to recognize and reward long-standing customers. Short-sighted loyalty programs thus end up bestowing rewards and recognition on customers that have recently achieved a higher level of frequency, but they do little to address the circumstances of customers who have been of high value in the past (that is, sometimes, for many years). In doing so, loyalty programs risk alienating potentially valuable customers. Thus most loyalty programs operate as an island: seldom taking any of the customer data gained from the program, and using it toward creating a dialogue with the customer; which would have been a key component for building loyalty over time. Lessons and Imperatives To summarize, ‘loyalty’ is more than just about points and discounts. CSPs need to realize that beyond price and service, the experience factor matters the most. Thus, while the incremental benefits that CSPs are achieving with their PBLS are impressive, many of them are falling short of realizing the complete vision of ‘loyalty’ that will allow them to retain their most valuable customers and increase profitability. The reality is that many CSPs have approached ‘loyalty’ from a technology perspective, without fully understanding its relationship with their overall CRM strategy.

ENHANCING ‘TRUE LOYALTY’ – A SOLUTION FRAMEWORK Our proposed solution framework begins by recognizing that all customer segments are not identical and that differences between them should translate into varied approaches to customer management. Further even for the target segment where the CSP determines that loyalty enhancement is critical, there exists a hierarchy of stages that need to be traversed to derive true loyalty. Identify Your Target Customer This involves tailoring the CSP’s approach to suit specific customer segments. Remember the old marketing mantra – 20% of customers bring 80% of profits, so ‘treat’ them differently. CSPs need to evaluate the strength of customer relationships by combining measures of satisfaction and loyalty. This effort classifies customers into four quadrants based on the strength of the relationship: • Advocates Advocates: The relationship is most secure. • Mercenaries Mercenaries: They seem satisfied, but they are not loyal and are open prey to competition • Hostages Hostages: They are often inert or have nowhere else to go but are beware of market changes • Rebel Rebelss : The relationship is highly fragile and in the greatest danger. This analysis needs to be combined with ‘life time customer value’ of these customers to understand their long-term importance to the CSP. In short, a CSP should seek to understand how valuable the customers are to it and then compare this to the strength of its relationship with them. This understanding will create a matrix which combines the CSP’s view of customer-value with the strength of customer relationship. This matrix will segment customers and help assign varying strategies to them.

© Wipro Technologies

Page: 05 of 17

Enhancing Customer Loyalty - The New CRM Frontier

Lifetime customer value Lifetime customer value cannot be calculated from a single data source. It needs integration across different data sources backed by a superior predictive logic. In the past this has been difficult because of the fragmented nature in which data resides. CSPs are often split by network technologies and different departments have their own systems and databases which store bits and pieces of customer information in a fragmented manner thus losing an overall understanding of the customer. Most operate with a matrix of applications, across and within channels and product lines that result in silos of customer information. In addition, the silo based approach to customer data precludes useful predictive analysis about the customer, such as who the customer is, what products and services is he/she buying and what the customer might purchase in the future and when would he/she be most likely to defect. However, through advancement in the integration, data warehousing and business intelligence technologies CSPs are now better positioned to tie together data residing in multiple data stores and applications and share the same across the enterprise in a seamless manner. For example, data entered in the process of setting up a customer account can be shared with the billing system, ERP and the credit system. This will help create a holistic view of the customer and then apply predictive logic on the same so as to arrive at life time customer value and to determine which customers are profitable, how to market to their customers, which products to develop, and overall how to enhance loyalty. Implement the Loyalty Hierarchy We are all familiar with the Maslow hierarchy of needs for a human being. Our research indicates that there exists a hierarchy of stages that need to be traversed by CSPs focused on building true loyalty. Each of these six stages contributes to true loyalty management, which is the point at which the CSP’s processes, technologies and goals are aligned with the long-term life plans and goals (that is, lifecycle) of the customers. The six stages in the hierarchy leading up to a lifecycle relationship include: • Stage 1: Align with your core value proposition • Stage 2: Deliver your core value proposition and measure the satisfaction • Stage 3: Reward frequent purchase • Stage 4: Provide consistent and personalized service delivery • Stage 5: Differentiate customer experience to reflect loyalty premium • Stage 6: Create lifecycle product and service offering Any attempt at achieving loyalty must therefore start with an understanding of these six stages and link it to CSP’s overall CRM strategy. Stage 1: Align with your core value proposition Stage 1 involves an understanding of the core value proposition of a CSP. It seeks to answer questions like why we exist in business and what do customers come to us for? This is the core promise of a CSP and its success is intrinsically linked to its ability to communicate this to its customers.

© Wipro Technologies

Page: 06 of 17

Enhancing Customer Loyalty - The New CRM Frontier

In defining this core value proposition, it is useful to understand some universal things that customers want: • Friendly interface that is easy to do business with: the travel industry has known it for decades • Unified experience irrespective of whom they deal with: the retail industry knows there is nothing like an online customer and an offline customer; they are one and the same • Personalized experience: the age of mass marketing is coming to a close • Uniquely tailored and on demand products/services: if Toyota can give you a car customized to your choice when you want, surely CSPs could learn from this as well While the above mentioned ‘universal needs’ would help in defining and refining the core value proposition, what is important is that any attempt at enhancing ‘loyalty’, build on this promise and not on attempts to side-track the same. Stage 2: Deliver your core value proposition and measure the satisfaction This is a baseline for building customer loyalty. This is achieving satisfaction so that customers feel that their needs are met. Customer satisfaction is the degree to which customers feel their needs are met. Loyalty is more qualitative and subjective than satisfaction. An enterprise can offer satisfaction without loyalty, but not loyalty without satisfaction. In measuring a CSP’s success at defining and delivering on its core value proposition, Six Sigma tools of Kano Model™ and Voice of Customer Analysis™ are of immense value. While Voice of Customer Analysis™ helps measure customer satisfaction and derive actionable feedback; Kano Model™ helps create product/service delivery which is almost the foundation for any true Loyalty. Kano Model™ The Kano Model is a powerful tool that enables CSPs to identify the few critical customer needs that have the highest impact. The model segments these needs according to: • ‘Must be’s’: They are those needs and wants that have to be met for a customer to even begin to have a positive relationship with the enterprise. • One-dimensional: They are the needs a customer will discuss and are typified by a ‘win-lose’ negotiation. • Delighters: Delighters are when wants or needs are met when a customer is not expecting it. This is shown in Figure 2. Satisfied

Delighters

One Dimensional

• Unified Customer Experience • Service taulored to individual customer needs • Surprise • Pro-active Trouble/SLA Management U N F U L F I L L E D

• Easer of Service Availability • Lower turnaround time

Must-Be's

F U L F I M E N T

• Expected Quality of Service • Accurate Billing

Dissatisfied

Figure 2: Kano Model as applied to a typical CSP

© Wipro Technologies

Page: 07 of 17

Enhancing Customer Loyalty - The New CRM Frontier

CSPs need to be nearly flawless on meeting customers’ ‘must-be’ needs. While they need to acknowledge the one-dimensional needs of their customers, they need to quickly move the discussion to the next level and focus concentrated effort on the delighters - those differentiators that provide extraordinary benefit to the customer without increasing a supplier’s cost and thus create the foundation for true ‘loyalty’. This is the very foundation for the strategy of a CSP’s loyalty program. A high-level strategy failure here could bring to naught any benefits from the next steps. As an example, several multinational service providers thought of Europe as a ‘common market’ only to realize the expensive way that each market was different, thus forcing them to appoint country mangers subsequently. Stage 3: Reward frequent purchase Having implemented Stages 1 and 2, CSPs have satisfied customers who now need additional reasons to ‘come back’. This is where PBLS for data collection and future interaction building can be very useful. The key users in a loyalty system include the following: • Customers accessing the system through Web, CTI, contact centre for membership creation, enquiry, points redemption/ transfer etc. • Product marketing for creating reference data • Contact centre customer service associates for membership management, points redemption/transfer and query management • Partners and other third parties from where usage/redemption information will be taken Figure 3 provides a functional representation to a PBLS. Billing/ Invoicing

Self Service Portal Adapter

Adapter

Loyalty API Adapter PBX/ACD

Subscriber

Partner / Third Party

IVR/CTI Adapter

Membership

Points Accrual

Reference Data

Points Redemption

Query

Reporting

FTP Client

Adapter CRM

Loyalty L oyalty DB

Data Warehouse

Legend Middleware

CSA W Web App Marketing e GUI

Operational & Analytical Reports

Loyalty API Adapters Loyalty System

Customer Service Associate

Product Marketing

Senior Management

Figure 3: Functional representation – point based loyalty system

© Wipro Technologies

Page: 08 of 17

Enhancing Customer Loyalty - The New CRM Frontier

As shown in Figure 3, the core functionality supported in a points based loyalty system includes: • Membership management: includes member creation, enrolment and cancellation • Reference data management • Points accrual management • Points redemption/transfer management • Query management: on points balance, transactions and redemption • Reporting To fulfill this functionality, the loyalty application and its associated database will typically interface with the following frontoffice and back -office applications: • Self-service Web, CTI/IVR for use by customers • Contact centre customer service associate (CSA) Web application • Contact management (could be within CRM) for customer contacts and preferences • Billing/invoicing applications • Data warehouse for reporting functions • FTP server for batch upload from partners and other third parties For implementing PBLS, there are a host of solutions that exist from different sources: • Custom built solutions (including possible component re-use) • COTS loyalty solution • Loyalty modules in enterprise CRM solutions for example Siebel While an exhaustive evaluation of these three sources is beyond the scope of this document, CSPs should be wary of copying solutions because the same needs to be clearly tailored to their needs. In particular, the success of a PBLS depends in large measure on the flexibility and ease of use of its rule engine which would be used by product marketing to create rules for various programs/offers/campaigns being executed by the enterprise. Stage 4: Provide consistent and personalized service delivery Stage 4 and subsequent stages are where most CSPs struggle today or in many cases have not even started focusing on. This stage can be further segmented into the following: • Step 1: Unified understanding of the customer across the enterprise • Step 2: Usage of this understanding to personalize customer experience • Step 3: Consistent delivery of this customer experience across all touch points But for a few exceptions, most CSPs are split by functionality, products, technologies or geographies. Different departments have their own systems and databases which store bits and pieces of customer information in fragmented silos thus losing an overall understanding of the customer. In addition, the silo-based approach to customer data precludes useful predictive analysis about the customer, such as who the customer is, what products and services is he/she buys and what the customer might purchase in the future and when would he/she be most likely to defect, thus reducing effectiveness of cross-sell/up-sell efforts as also of the associated marketing campaigns.

© Wipro Technologies

Page: 09 of 17

Enhancing Customer Loyalty - The New CRM Frontier

The first step therefore is to integrate these applications and their data models to tie together data residing in multiple data stores and create a unified view of the customer. This unified view should incorporate various fields including: • Understanding of the customer himself/herself • His/her relationships • The products/services being used currently • Products/services presently in order • Quantum of products/services being used and their trend • Customer service calls/e-mails made • Proactive feedbacks received from the customer • Other data colleted from marketing surveys including: • Number of suppliers being used by him/her • Number of customer referrals It is said that the more the automation, the more the craving for personalized touch. Hence the next steps involve using this unified customer information to personalize customer experience consistently across the enterprise. This requires integrating various processes firstly within the enterprise and secondly between different partners in an enterprise’s ecosystem. This is depicted in Figure 4.

Sale

Service Delivery

Billing/ Invoicing a Collection

Customer Ownership Marketing

Customer Care

Analytical Database

Figure 4: Integrated view of customer centric processes at a CSP

© Wipro Technologies

Page: 10 of 17

Enhancing Customer Loyalty - The New CRM Frontier

Figure 4 depicts the typical departments within a CSP that interact with the customers in some form or another. These include: • • • • •

Customer care Billing/Invoicing and collections Service delivery Marketing Sales

The key challenge for the CSPs is to address the following: • Presenting a unifying experience to the customer • Portraying sensitivity to customer experience using existing customer information What is needed is for the unified customer information to be available for use in the present to the people who actually interface with the customers. This should translate to better, faster and more personalized customer service as users are better equipped with the information necessary to respond to customer needs. Our analysis revealed the following key processes that need to be integrated to effectively deploy the unified customer understanding and portraying sensitivity to the customer. Integration of marketing with the following: • Promotions integrated to customer experience • Feedback integrated to negative customer experience • Timings related to individual needs • Language related to individual needs • Promotions targeted towards individual needs • Promotions integrated to customer experience related to billing • Marketing based on bill and payment analysis Integration of billing/invoicing to tailor to individual needs based on the following: • Age • Sex • Disability • Literacy • Reminding and helping customers pay their bill Integration of customer care with the following: • Billing/invoicing information • Accounts receivable • Credit rating • Consumption patterns • Customer value • Outstanding problems • Opportunity to cross-sell/up-sell

© Wipro Technologies

Page: 11 of 17

Enhancing Customer Loyalty - The New CRM Frontier

Customer care representatives should be given suitable training to interpret this information and tailor his/ her response based on this information. This will present a highly unifying experience to the customer. Innovative solutions like Click Stream Analysis and multi-channel contact centers have also been known to enhance customer experience (Refer to the appendix for a detailed discussion of the above solution roadmap). Integration of service delivery with the following: • Awareness of outstanding problems and their status • Value of customer • Awareness of new products/services to cross-sell/up-sell • Language/ethnicity so that the right personnel are deputed for the individual Finally, customer ownership by each employee of the CSP is a must to have the process integrations function seamlessly. However, developing the same is easier said than done. For example, it is commonplace for customers to get transferred from one customer service representative/department to another in trying to resolve his/her problems. This does not represent a unifying face and greatly decreases satisfaction not to mention loyalty. To begin with we recommend that a small application be installed on every desktop/laptop/handheld device to enable all customer-facing staff to immediately log such queries/complaints. Once the query or complaint is logged it should be routed to the appropriate department which will contact the customer to resolve the query. While IT enabling the employees can go a long way in achieving the same, suitable processes and reward and recognition are necessary to align the employees with the customer ownership mantra. Stage 5: Differentiate customer experience to reflect loyalty premium Going beyond merely personalizing customer experience, enterprises need to really look into differentiating customer experience based on the ‘loyalty quotient’. Differentiating customer experience is practiced even today but it is based more on points accrued by a customer. To take an example from the airline industry, frequent flier programs require customers to fly a certain number of miles in a 12month period to reach the enterprise’s high-level status, but they make no difference whether the customer has been a good customer (that is, a frequent customer) for one, 10 or 20 years. What is needed is for CSPs to develop and evolve a ‘loyalty quotient’ which factors in several key variables encompassing true loyalty and lifetime customer value. These could include: • The number and type of products/services being used currently • The number and type of products/services presently in order • Quantum of products/services being used and their trend • Proactive feedbacks received from the customer • Years of consistent usage of products/service • Referral customers if any • Other data collected from marketing surveys including • Number of suppliers being used by him/her • Number of customer referrals Further, as mentioned above, this analysis should unify data related to the customer with that of his/her relevant relationships to present a holistic picture of wallet share and mind share. Doing so would demonstrate deep customer memory from building on past interactions, as well as an understanding of a valued relationship. This ‘loyalty quotient’ should be a handy display available at all customer touch points. The next stage would be to share this data with partners in the CSP ecosystem and seek to unify experience to the extent possible across the ecosystem thus raising the exit barrier significantly.

© Wipro Technologies

Page: 12 of 17

Enhancing Customer Loyalty - The New CRM Frontier

What really makes such sharing of information easy today is the advent of technologies like Web services which help streamline information dissemination and integration across different partners. Again, while data models and systems can help unify and disseminate information, the most important ingredient for unified but differentiated customer experience is change management – the understanding by one and all from the CEO to the janitor that customer experience is the holy grail of loyalty and thus of CRM itself. Stage 6: Create lifecycle product and service offering Stage 6 is a continuous phase and involves using the enhanced customer understanding to create product/service bundles and the associated experience to match the lifecycle needs of the customer. Customers, particularly those that drive value, expect to receive more personalized service. In the long run, they also expect to be offered products and services that are more closely aligned with their needs. Just as the era of mass marketing is drawing to a close so is the era of universally designed products/ services. While providing individual products/services has ceased to be a differentiator the way in which these products/services are bundled together and associated experience along with which the bundle is offered to the customer is fast becoming the new differentiator. With detailed insight into their customers, CSPs can do smaller and more accurate segmentation and identify customer needs, wants, and value. They have the tools now to design marketing campaigns that target a segment as small as a single customer so as to greatly improve the success ratio. They have the means to design bundled products, service offerings, pricing plans and other attributes uniquely tailored to the needs of these small segments. These would not only reduce the cost of marketing campaigns/offers but also make it very difficult for competition to imitate product/service offerings since these would now be tailored to the needs of almost every individual.

CONCLUSION CSPs globally and more so in developed markets understand the importance of building loyal customers and have started taking action for the same. Unfortunately, the focus has been more at deploying PBLS and trying to bind the customer through attractive gifts, coupons, discounts and points. While these solutions do offer a short term stimulus to the customer to remain with the CSP, in the long term they are essentially glorified discount mechanisms and reduce the overall brand value. What is really needed is for CSPs to link their loyalty program to the overall CRM strategy and the core value proposition of the CSP. In doing so, the six stage framework as shown here will be of immense help to the CSP. What is needed to make it work is to understand that. • Leadership commitment is critical: Loyalty cannot exist in one department alone. It must have a direction with goals and processes that permeate throughout the business so that it can be executed at all points of customer interaction. • Loyalty program must strengthen the core value proposition: Extend loyalty strategy from core value. Kano Model™ and the voice of customer analysis™ provide important tools to build a foundation of relevant products/service offerings and essential customer satisfaction. Remember, that loyalty can only come after customer satisfaction. • CSPs must use the loyalty hierarchy: It is important to progressively move in the direction of unifying customer information, differentiating customer experience and innovating new products/ services based on this understanding. To give example, British Telecom sends bills in bigger font sizes for senior citizens and in Braille for the visually challenged. • Finally, change management is critical for any such program. Hence there is the need to educate, train, empower align employees with this initiative. For, while data models and systems provide the tools for building loyalty, implementing that is in the hands of the employees, more so those who actually interface with the customers.

© Wipro Technologies

Page: 13 of 17

Enhancing Customer Loyalty - The New CRM Frontier

APPENDIX Integration of Marketing with Other Applications Promotions integrated to customer experience Organizations should develop mechanisms by which marketers are made aware of the past customer experience. To give an example, an irritated customer will get further irritated if he/she receives promotional material immediately after having a very negative experience. Feedback integrated to negative customer experience Many CSPs ask for feedback related to an ongoing service or after a certain service is provided. However if the customer has had negative experience then this may just back fire. This can be likened to a hospital asking for feedback to a client whose nearone has just expired in the same hospital. Integrating the feedback mechanism with customer experience displays great sensitivity to the customer. This is not to say that taking feedback is a wrong strategy. What this means is that the personnel asking feedback should be aware of past customer experience and should tailor their interactions accordingly. Timings related to individual needs All of us feel hassled with promotional calls which could prove irritating especially if they are made at odd times. It is pertinent that any timing preferences of customers are captured and the information flows from customer care to the marketing department. This information could include whether the customer likes such calls and if so his/her preferred timings. Language related to individual needs It is of utmost for any importance for any CSP to show empathy to its customers by communicating with them in the language of their choice. Needless to say, all of us are more comfortable in communicating in our native language. Care should be taken to understand that the choice of oral and written communication could be different. All such information should flow from customer care to the marketing department. Promotions targeted towards individual needs Many CSPs have already worked in this direction. They are moving from targeting promotions from groups to match individual needs. This is a significant challenge for those who have millions of customers. Customer ethnicity should be recorded by the service provider. Marketers should have sufficient information and reports from the analytical database to target promotions towards individual needs. Some examples are birthdays, festivals, occupation, gender etc. Promotions integrated to billing experience A marketer should be acutely aware of the customer experience of the organizations billing and payments. This information can either flow from the billing/payment system or the analytical database. Marketing based on bill and payment analysis A marketer should analyze the bills and payments trend of the customer as there is a very slim chance that a CSP would like to take up a defaulting customer for other services. Targeted promotion would thus save significant revenue for a promotion. Further a marketer should be highly aware of the value of a customer to the organization. Therefore there is need that such information flows from analytical database to the marketing database.

© Wipro Technologies

Page: 14 of 17

Enhancing Customer Loyalty - The New CRM Frontier

Integration of Billing with Other Applications Sending bills tailored to individual needs As many CSPs realize, billing is sometimes the only interaction point with the customer. It is very important that the invoice is tailored to individual needs. The needs may vary significantly based on the following: • Age – For example invoices can be sent in higher font size to senior citizens. This has been aptly demonstrated by British Telecom in UK greatly enhancing loyalty from this age group. • Status – The status of the individual whether single/married can help tailor invoices to individuals • Sex – Invoices could be sent on multi-colored paper to its female customer’s greatly enhancing loyalty from them. • Disability – Based on the disability on the organizations can change the format of invoice for easy interpretations. This is demonstrated by British Telecom by sending invoices in Braille for the visually challenged. • Literacy – There could be integration between customer care and billing so that illiterate customers are called and explained the bill details. • Reminding and helping customers pay their bill – A lot of organizations remind customers to pay their bill greatly benefiting from the payment turnaround time. Special mechanisms should be devised to help the physically challenged customers and other special category of customer to pay their bill. Ethnicity – Bills can be tailored to suit specific ethnic needs. Celebrating festivals of minorities could be a good example • of developing niche markets. Integration of Customer Care with Other Applications The customer care should be integrated suitably with other systems to display the following information for an incoming call in a single window • Billing information • Accounts receivable • Credit rating • Consumption pattern • Customer value • Outstanding problems • Opportunity to cross-sell/up-sell (customers are more receptive to such offers when they call rather than when marketers call) The customer care officer should be given suitable training to interpret this information and tailor his response based on the same. This will present a highly unifying experience to the customer. Assessing level of disillusionment Customer care should be provided with suitable IT systems to capture the level of disillusionment of the customer. Specific processes have to be designed to sort problems of highly disillusioned customers. To take an example the level of disillusionment will be very high if the customer faces problems immediately after taking the service. Innovative solutions like click stream analysis have also known to enhance customer experience. Click stream analysis involves analysis of the clicks of the customer at the organization Website and directing the customer to the appropriate customer care officer to initiate a chat on the Website.

© Wipro Technologies

Page: 15 of 17

Enhancing Customer Loyalty - The New CRM Frontier

Integration of Service Delivery to Enhance Customer Experience The service delivery departments of most CSPs are not aware in real time the snapshot of customer experience. It is very essential that any person or department that is in touch with customer have this view which includes the following: • Awareness of outstanding problems and their status • Value of customer • Awareness of new products/services to cross-sell/up-sell • Language/ethnicity so that right personnel are deputed for the individual Customer Ownership by Each Employee of the Organization Customer ownership by each employee of the CSP is a must to have the process integrations function seamlessly. However, developing the same is easier said than done. It is commonplace for customers to get transferred from one customer service representative/department to another in trying to resolve his/her problems. This does not represent a unifying face and greatly decreases satisfaction not to mention loyalty. To begin with we recommend that a small application be installed on every desktop/laptop/handheld device to enable all customer-facing staff to immediately log such queries/complaints. Once the query or complaint is logged it should be routed to the appropriate department which will contact the customer to resolve the query. While IT enabling the employees can go a long way in achieving the same, suitable processes and reward & recognition are necessary to align the employees with the customer ownership mantra.

ACRONYMS CSP ARPU eTOM PBLS

Communication Service Providers Average Revenue Per User Enhanced Telecom Operations Map Point Based Loyalty Systems

REFERENCES 1. www.tmforum.org; eTOM frame work version 3.6 (Figure 1 : Retention and loyalty sub-processes in eTOM v 3.6)

ABOUT THE AUTHORS Manish Kumar is currently Wipro’s Relationship Manager for AT&T Wireless. He is a Senior Telecom Consultant with diverse experience across business development, account management and process consulting. Over the last 3 years, he successfully handled several account engagements across the US, Europe and Japan and brings deep understanding of the telecom sector and IT outsourcing services. Manish holds a Post Graduate Diploma in Management from IIM, Ahmedabad and has worked as a strategy consultant for other global majors like Hughes and Price Waterhouse Coopers in the past. Sudeep Saxena has been associated with Wipro for more than 4 years as a Telecom consultant. Over the years he has played a key role in various business process consultancy assignments for telecom clients across the globe. He has also specialized in transitioning and managing applications in the onsite-offshore model. Sudeep is currently a functional consultant for one of the largest telecom service providers in the US. Before Wipro, he has worked extensively (more than 6 years) in business support systems related assignments.

© Wipro Technologies

Page: 16 of 17

Enhancing Customer Loyalty - The New CRM Frontier

ABOUT WIPRO TECHNOLOGIES Wipro is the first PCMM Level 5 and SEI CMMi Level 5 certified IT services company globally. Wipro provides comprehensive IT solutions and services (including systems integration, IS outsourcing, package implementation, software application development and maintenance) and research & development services (hardware and software design, development and implementation) to corporations globally. Wipro’s unique value proposition is further delivered through our pioneering Offshore Outsourcing Model and stringent quality processes of SEI and Six Sigma.

WIPRO IN TELECOM SERVICE PROVIDERS Wipro Technologies helps telecom service providers to maximize RoI on their asset investments, improve profitability and reduce the time-to-market. Wipro’s full range of business support systems (BSS) and operations support systems (OSS) solutions along with best in class products through alliances address the specific needs of wireline, wireless cable ISP/ASP and IDC companies. Wipro also provides business solutions like CRM, data warehousing, Web enabling and enterprise integration. Several leading telecom service providers across the globe are leveraging Wipro’s expertise in the areas of IT consulting, systems integration, application development, maintenance support and BPO. Wipro has successfully executed complex projects in OSS/BSS areas of network management, inventory management, provisioning, mediation, billing and customer relationship management in both COTS product implementation as well as custom developed solutions.

For further information visit us at: http://www.wipro.com/tsp For more whitepapers logon to: http://www.wipro.com/insights © Copyright 2004. Wipro Technologies. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without express written permission from Wipro Technologies. Specifications subject to change without notice. All other trademarks mentioned herein are the property of their respective owners. Specifications subject to change without notice.

Worldwide HQ Wipro Technologies, Sarjapur Road, Bangalore-560 035, India.

U.S.A. Wipro Technologies 1300 Crittenden Lane, Mountain View, CA 94043.

U.K. Wipro Technologies 137 Euston Road, London, NW1 2 AA.

France Wipro Technologies 91 Rue Du Faubourg, Saint Honoré, 75008 Paris.

Germany Wipro Technologies Horn Campus, Kaistrasses 101, Kiel 24114.

Japan Wipro Technologies # 911A, Landmark Tower, 2-1-1 Minatomirai 2-chome, Nishi-ku, Yokohama 220 8109.

U.A.E. Wipro Limited Office No. 124, Building 1, First Floor, Dubai Internet City, P.O. Box 500119, Dubai.

www.wipro.com eMail: [email protected]

© Wipro Technologies

Page: 17 of 17