Customer Experience

Management Achieving Differentiation through Customer

Centricity

Farhan Ahmad Khan

Ericsson India Global Services

Block A, King Canyon

ASF Insignia – IT SEZ

Gurgaon Faridabad Road

Gwal Pahari, Gurgaon – 122003

Haryana

Mobile: +91 7838349484

E-mail: farhan.ahmad.khan@ericsson.com

Abstract The Telecommunication industry recognized the need to manage customer experience long time

back but it is only in recent years that we have seen a real move towards establishing CEM

(Customer Experience Management) in the Service Providers organization. CEM was the most

over used phrase in the Mobile World Congress, 2012 where everyone ranging from Telco

Operators to Managed Services Providers talked about CEM and its need for the Telcos to

survive in the current market situation.

However, there is no consensus in the industry as to what comprises CEM, what the CEM

practices are, and how to actually manage customer experience in order to ensure long term

sustainability and association with the customers. Despite the industry’s confusion over CEM, it

is going to play a key differentiating role for the Telcos in the near future as most operators plan

to invest heavily in CEM in order to attract, retain and delight the customers.

This paper attempts to define:

What CEM in Telecom is

How and what technology is used to implement a CEM program

End to end approach towards CEM

Who are the players in the CEM market and what they are offering

The CEM initiatives by Telecom Operators in different regions of the world

Introduction

Telecom industry is a never-ending source of new terms. Many are used for marketing purposes

and occasionally some become part of the buzz as they capture and articulate a major industry

trend. The term “customer experience management,” (CEM) is one that fits in the latter category.

While it remains somewhat expansive at the moment because of its application to a variety of

ways customers experience technology — from the devices we use, the apps we run and the

networks they rely on — there is no denying that CEM is an important topic.

Indeed, CEM concerns have risen to near the top of the priority lists of communications service

providers. What many have considered an operational backwater in recent years has become a

central focus as competition increases and things like churn, retention and loyalty take center

stage. The reason is the need to provide differentiated value based on something other than

offering a commoditized service or product at a more attractive price. The Internet has changed

the buyer/seller relationship in profound ways as sellers have access to better and real-time

information. What this means in simple marketing terms is that if operators want customers, they

need to provide an overall experience that is so compelling that customers will be attracted to

what operators have to sell and could even be converted to an advocate if delighted.

CEM in Telecom

TM Forum defines the Customer Experience as being “the result of the sum of observations,

perceptions, thoughts and feelings arising from interactions and relationships (direct and indirect)

over an interval of time between a customer and their provider(s)”.[1]

Customer Experience Management (CEM) has, over the last 6-8 years, become a major talking

point in the Telecom industry, as well as a number of other industries, including Financial

Services, Retail and even the Public Sector. The widespread focus that CEM has received in

Telecom from both the Communication Service Provider (CSP) and vendor communities is,

however, far from being homogeneous. For some, CEM is a software/ technology-based

solution; for others, it is a business concept that is more about an organizational transformation

process; for others it is a re-invigoration (or, an extension) of CRM; and, for others, it is a

passing vendor-driven fad which will no doubt be super ceded by another fad sooner or later.

By and large, however, the industry seems to understand what CEM is meant to do for CSPs.

CEM is meant to: drive a greater level of customer-focus; engender operational efficiencies;

generate new revenue streams; and help maximize profits. These are of course easy generic

statements to make and are relatively meaningless unless CEM can be concretely defined (there

is no single definition today) and unless there is a clear understanding as to what CSPs are doing

to leverage CEM.

However, CEM is certainly more than a fad. It is more than a technology-enabled solution. CEM

is one of the primary axes for CSP transformation and growth. This is because CEM embodies

the challenges and opportunities that are reflective of how telecom markets the world over can be

characterized today, or where they are naturally headed, including: saturation; hyper

competition; commoditization of core business; proliferation of value-added services and

devices; destabilization of the traditional value chain; and increasing sophistication of the end-

customer.

Based on these external drivers, CSP transformation is not a question of ‘if?’, it is a question of

‘how soon?’. CEM is, therefore, a philosophy that acts as a catalyst for change because it

addresses two fundamental business issues: (a) How does a CSP best align to the evolving

expectations of the external market; and (b) How does a CSP need to re-organize internally to

support that focus? [2]

Need for CEM

As the industry moves into a growing market of digital services built on infrastructures that

enable fast development and deployment of new services, the service portfolio itself is not

sufficient to establish a lasting differential in the market place. Such a differential is quickly

eroded by competitive service providers. Having tried to differentiate through technology and

‘clever’ pricing models and found the strategy to be short lived, service providers are realizing

that a more solid differentiation can be gained through managing the customer experience. This

does not just mean delivering service that meets the customers’ expectations but that all aspects

of its business must support the concept of a superior customer experience.

As we can see from the diagram above, there are a number of reasons why the market is ready to

encourage service providers to introduce CEM programs.[3] Including:

Market Maturity - Maturing traditional service markets change the nature of

competition

Customer Experience

Market Maturity

Economic Trends

New Technologies

Customer Behavior & Preferences

Economic Trends - Economic trends impact customer spending and service provider

investments

New Technologies - New capabilities drive new services and the potential for better

customer experience

Customer Behavior & Preferences - Changes in behavior create new risks &

opportunities

Whilst not the only factor in managing the customer experience, delivering good service quality

is still a corner stone to achieving customer satisfaction. However, this in itself has become more

demanding as the rapid increase in digital services has brought with it ever increasingly complex

value chains an example of which is shown in the following diagram.

Service providers seeking to increase profitability are turning to initiatives in customer

experience to differentiate themselves. This is not happening by accident or coincidence; service

providers are realizing the connection between customer experience and profitability. The survey

of 20 service providers carried out by the TM Forum to identify the key drivers for implementing

CEM programs is shown in the following chart.[4]:

Approach to be adopted for CEM

When developing a roadmap for any CEM program four key areas must be addressed.

These, as shown in the diagram above are:

People (employees, suppliers and partners): The program must take into consideration the

journeys people will need to travel to evolve the working practices, environments and mind-sets

that the members of the organization in order to transform the organization into a customer

centric company. This part of the program must not be under estimated as it may well turn out to

be the most difficult to achieve especially for organizations and functions that have historically

been very technology focused. It can be very difficult for some members of staff to make this

transition and the reality is that some will not be able to complete the journey and any program

must allow for this reality

Process: In many ways implementing the new processes necessary to support CEM is likely to

be the easiest part of the program especially if the organization has a process culture and its

current processes are well documented. Key to implementing the new process model is to be

brave but be sensible. Be brave enough to do away with processes that do not support the CEM

way of working. The answer to ‘why do we need to change, we have always done it this way and

it has been o.k. so far’ should not be acceptable. It is because it has always been done that way is

exactly why it has to change if the company is to refocus on the consumer. Having said ‘be

brave’ it is also advisable to be sensible. Change for the sake of change is always hard to sell and

where processes are fit for purpose then they should be left in place.

Systems: Having the right tools and OSS / BSS environments in place to support CEM is

absolutely critical to achieving the end goal. Establishing an early dialogue with tools suppliers

(internal and external) has to be a priority in the early days of the program if for no other reason

than the lead times for delivering and integrating the necessary solutions. It is quite probable that

this part of the program is the most likely to cause delays and the timing is critical. Having the

people in place to support CEM but unable to make the transition due to the lack of a supporting

CEM

Systems

Process

Governance

People

tools environment will lead to frustration and will feed the ‘naysayers’ with ammunition to

criticize the program.

Governance: One critical component that is often overlooked or added in as a bolt on extra is

that of governance. Strong governance is critical when implementing a CEM program. CEM is

likely to introduce new working practices which may to some, seem unnecessary and a hindrance

to rolling out new digital services quickly. Without strong governance the program will become

disjointed with different parts of the organization going their own way instead of a single ‘joined

up’ approach to delivering a good customer experience. A federated CEM solution is both less

efficient and more costly than a single solution and must be driven and policed by a single

central governance authority.

End to End Customer Experience Framework

The communications industry has recognized the need and has been developing customer centric

processes for some time and some service providers are quite advanced in this area.

The end to end customer experience framework shows how a service provider must understand

the interactions with the customer both from an internal perspective and from the customers’

throughout the Customer Lifecycle.

Customer’s Perspective Traditional Operator’s Perspective

The problem with the above framework is that it still only really engages with the customer when

the service provider is ready to market and sell the service. There may be some engagement to

judge the market readiness for a new service but rarely is there any interaction with the end user

during the design and development of the service or product.

The next generation of CEM is therefore more accurately described in the following diagram

with ‘Design’ as the beginning of the process; no longer acquisition.

A detailed analysis of the full CEM process or processes is outside the scope of this paper but

could be summarized by the Business Process Framework diagram shown below. In a nutshell,

CEM touches on many of the processes in the framework from Strategy to Billing and from

Supply Chain to Customer Relationship Management.

CEM via Analytics

Although CSPs hold vast amounts of data about their network and subscribers, they are not

effectively managing it today. By effectively mining and analyzing this data at every customer

touch point, they can gather valuable insights about customers’ experiences, preferences and

predicted behaviors.

Design Acquisition Fulfilment Usage Support Optimizati

on

Analytics that address customer, service, device and network data provide real-time business

intelligence that can be applied at every customer touch point. Insights gathered from analytics

can drive strategic initiatives to improve retention rates and customer lifetime value. Real-time

capabilities enable service providers to react quickly to changing conditions and enable timely

interaction with customers. With analytics that produce real-time intelligence and invoke

appropriate actions, service providers can transform the customer experience.

Analytics is the key to improving the customer experience. Many industries have successfully

applied analytics to enhance the customer experience and produce positive business outcomes.

But the communications industry has been slower to adopt analytics. Yankee Group sees a

requirement for “an intelligence infrastructure that communicates across internal functions such

as ordering, billing, care and network operations simultaneously, in real-time, to make the

experience more dynamic and responsive” [5].

Reports

Analytics can help CSPs create simple or elaborate visual reports to summarize dataset analysis.

Simple reports can plot one set of data values against an independent variable, such as download

speed by handset type. These reports have low computational complexity.

More elaborate reports - for example, reports that show the subscribers with the highest

propensity to churn in the next month - may have high computational complexity. These reports

consume computing resources but may not be required in real-time. For instance, a churn report

may only need to be generated weekly or monthly.

Dashboards

Dashboards give CSPs a window into current technical and business performance metrics. A

dashboard can provide a visual summary of the current state of a CSP based on analysis of

constantly ingested real-time data. Although the calculation of metrics involves low

computational complexity, a timely response is required so that business decisions can be made

in rapid response to changing conditions or adverse events. For example, timely awareness of

impending network or radio frequency (RF) congestion can help a CSP take action to avert a

negative effect on the customer experience.

Dashboards and Reports made using Analytics

Customer Retention and Loyalty Management

For marketing departments, the value of analytics extends beyond dashboards and reports. For

example, analytics can help manage customer churn and loyalty. Churn management and loyalty

programs are related in that they are two sides of the process of improving customer experience.

Analytics enables the marketing department to understand the customer experience from the end

customer’s point of view. Moreover, it provides information on subscriber spend and

profitability, propensity to churn, and social group influence. These are critical inputs that can

help marketers design effective retention and loyalty campaigns.

Customer lifetime value (CLV) is a key metric determined through analytics. Used to measure

the profitability of customers over their service lifetime, CLV is widely applied in the retail

industry but relatively new to the telecommunications market. Ovum suggests that CLV is a key

metric linked to the customer experience. By making incremental investments to improve CLV,

a CSP can improve overall company business performance and corporate valuation.

Customer Lifetime Value is a key metric

Personalization

Marketers have long been aware of the uplift that personalization can create in marketing and

advertising. Now, CSPs can use personalization in new ways to differentiate and monetize their

offerings. By understanding subscribers down to the individual level — for example, their

calling patterns, billing history, data usage, location, content preferences and availability —

service providers can begin to offer personalized services that stand out from those offered by

other providers.

Some use cases of Analytics by CSPs

Telkomsel-Indonesia

Telkomsel, Indonesia’s largest telecom operator, expects to provide improved service quality using Nokia

Siemens Networks’ Customer Experience Management (CEM) on Demand. The new portal, launched

recently, will provide one single entry point to view real-time experience metrics for every customer in

Telkomsel’s network. This will allow Telkomsel to have a unified view of customer data, along with

continuous reporting of customer insights that help it to improve its customers’ experience and generate new

revenue streams.[6]

Safaricom-Kenya

Safaricom is enhancing end-user experience through true convergence of its subscribers. Safaricom

homed in on Nokia Siemens Networks’ common subscriber database solution – One NDS. The

solution today is already flexible enough to meet long term growth and on completion, will enable

Safaricom to enjoy a consolidated view of its 17 million live mobile, WiMAX, GPON and Internet

subscribers, facilitating the introduction of new, innovative and targeted services.[7]

CEM Vendor Market

Competition is intense as both network and IT vendors target the CEM space. CEM vendors

come from different starting points in the network and IT domains. The market includes vendors

ranging from large global network equipment providers to small analytics start-ups. Nokia

Siemens Networks has unveiled its Insight & Experience Framework, HP has positioned its

CEM portfolio as its Actionable Customer Intelligence (ACI) solution, Redknee has teamed up

with Microsoft to develop enhanced CEM solutions, and Amdocs, IBM, and Alcatel-Lucent,

among others, are investing substantially in their CEM solutions.

The biggest challenge for all of these vendors, however, is to demonstrate the clear business

benefits of their solutions. Suppliers are still struggling to articulate their CEM strategies, but

market dynamics should become clearer as vendors develop their CEM frameworks and as the

vendor ecosystem becomes more defined. Technology suppliers that can best capture and harness

the growing volumes of structured and unstructured data will become leaders in this space.

Other vendors to European operators include Accanto, NetTrax, RanWorx, Nexus Telecom,

ResponseTek, and NICE systems.

In the Current Analysis’ recent “Customer Experience Management survey: Operator strategies

and Purchase Horizon” report), operators ranked Nokia Siemens Networks together with

Hewlett Packard in the first place [8].

CEM Initiatives by CSPs

The abundance of CEM solutions on the market and varying definitions of the phrase also

created confusion; it seems the industry is still learning how to “do” CEM, and it’s aware of its

shortcomings. SAP recently reported that although 80% of the executives they surveyed named

customer experience as a top priority, yet only 20% thought they were doing it right. Those

numbers are quite accurate. In fact, in the US, among wireless service providers, the American

Customer Satisfaction Index showed customer satisfaction fell 1.4% from 2010 to 2011. There’s

certainly room for improvement; as a whole, the telecom industry is still wrestling to develop a

business model that both produces profit and delivers a seriously improved customer experience.

Here are a few initiatives from CSPs to tackle the challenges of CEM [9].

Customer Experience Experts

Over the past three years, top tier carriers began hiring customer experience leaders—multi-

lateral champions of CEM that advocate a customer-centric policy across all functional groups in

an organization. With titles like VP of Customer Experience and SVP of Customer First Culture,

this new class of telecom exec is tasked with turning organizations that have been primarily

network-focused to agile businesses that have deep insight into their customers’ needs, usage,

and overall experience. With the move to a customer-centric paradigm, new spending initiatives

have followed.

Self Care Portals

As device and service complexity increases, synchronizing with legacy systems can create

frustrating experiences for customers. This truth is played out in customer satisfaction scores

over the past year, when arguably the best functioning handsets to date were released. Crafting a

self-help portal that meets customers’ needs—not a developer’s idea of customer needs—is

paramount. For example, Verizon recently experienced a 15% decrease in calls to their contact

center by deploying self-help tools.

Real-Time Service Provisioning

Giving customers the ability to upgrade and control their services on the fly creates increased

loyalty, transparency, and upsell opportunity. Wataniya Telecom recently deployed a Comptel

solution that allows customers to dynamically choose their numbers and the packages they want

in real time.

Contact Center Overhaul

Negative response to outsourced contact centers has driven many CSPs to re-think their call

center strategy. According to Ovum, “Customer service is now so important to the overall health

of telcos’ businesses that previously outsourced contact center functions or help forums are being

brought back in house.”

Retail 2.0

From kiosks to websites to brick and mortar stores, the initial customer interaction can occur

almost anywhere these days. Retail strategies must evolve to deliver unified messaging and

enable customers to select the right device for their needs. In the UK, Orange and T-Mobile have

launched service concepts stores, and in the US, AT&T has built “Customer Experience” stores

that offer a hands-on way to experience and shop for communications and entertainment

services.

Social Media

Some CSPs, like Telus and Verizon, have effectively leveraged social media to boost customer

loyalty and improve reputation and brand image. In Canada, Telus has built one of the top brands

on Facebook, with 670,000 fans in French and English. Social media initiatives have helped

Telus find the pulse of its customers, even going so far as to engage social followers to help

choose a company mascot.

Time Management

Several CSPs are implementing an innovative way to avoid frustrating call-center wait times:

book an appointment. It’s an easy win-win. Similarly, CSPs who have to send a technician to the

home or business are leveraging SMS notification to eliminate frustrating appointment windows

of the past. BT uses such a system to notify customers when a technician is on the way, and has

seen a 50% reduction in complaints as a result.

Conclusion Ensuring customers have a good experience every time they have an interaction with their service

provider – or fixing glitches quickly and without making the customer work hard to get attention and a

solution – is the key to keeping that customer and selling them more products and services. It is also the

way to build brand and reputation and attract new customers. Being customer-centric isn’t about

technology, or not only technology, it’s about an entire way of running a company and staff buy-in, from

the board to the lowliest employee.

Not only must top management set the vision, it must determine affordability, allocate appropriate

resources, ensure cross-functional coordination, and remove some of the barriers that will inevitably pop

up during the course of implementation.

References 1. “Customer Experience Management- Introduction and Fundamentals”, TM Forum. Retrieved 18-

05-2012.

2. “Customer Experience Management: A Business Imperative beyond a Technology Solution”.

Frost and Sullivan. Retrieved 22-05-2012

3. “Customer Experience in a Connected World”, TM Forum. Retrieved 22-05-2012

4. “Customer Experience in a Connected World”, TM Forum. Retrieved 22-05-2012

5. Susan McNiece and Sheryl Kingstone, “Customer-focused experience management”, Yankee

Group

6. “Telkomsel Indonesia takes control of customers’ experience with Nokia Siemens Networks

technology”, www.nokiasiemensnetworks.com, retrieved 22-05-2012

7. “Safaricom enhances end-user experience through true convergence of its subscriber”,

www.nokiasiemensnetworks.com, retrieved 22-05-2012

8. “Customer Experience Management: Operator strategies and purchase horizon”,

www.Currentanalysis.com, retrieved 20-05-2012

9. “Cracking the code of CEM”, www.pipelinepub.com , retrieved 22-05-2012

Keywords CEM

Customer Experience Management

Customer Experience

Customer Centricity

Customer Delight

Customer Satisfaction

User Management

Service Quality

User Analytics

Customer Lifecycle Value