White Paper

Building Customer Loyalty in the Telecom Market

Comarch SA Al. Jana Pawa II 39 a 31-864 Krakow Poland phone: +48 12 64 61 000 fax: +48 12 64 61 100 e-mail: info@comarch.com

www.telecoms.comarch.com
www.comarch.comwww.comarch.plwww.comarch.dewww.comarch.fr
Comarch Spka Akcyjna with its registered seat in Krakw at Aleja Jana Pawa II 39A, entered in the National Court Register kept by the District Court for Krakw-rdmiecie in Krakw, the 11th Commercial Division of the National Court Register under no. KRS 000057567. The share capital amounts to 8,051,637.00 z. The share capital was fully paid, NIP 677-00-65-406 Copyright Comarch 2012. All Rights Reserved.

What will you learn?

How to embracing loyalty programs to understand the whole customer experience How do companies decide who is a loyal customer? What activities should loyalty technologies promote?

Building Customer Loyalty in the Telecom Market

 The Basic Concept of Creating New Services From Reusable Components

In the wireless industry, a new phone with a 2 year contract has been the definitive incentive program for years. The telecom industry, like others is plagued by churn; in fact the majority of new customers are churn customers. It is difficult to understand why most companies have not moved beyond this weak approach. The consumer has to choose between a huge amount of competitive products and services all offering similar incentive packages. Brands need to move beyond this antiquated method. Through the proper use of a pervasive loyalty solution, telecoms can begin to provide a memorable experience in order differentiate their product and attract and retain loyal consumers.

longer a sustainable business model. The necessity to focus on understanding the customer experience has proved daunting as most telecoms strategy and information is siloed in unique lines of business; fragmenting one customer into many different views.

Data, data and more data

As telecoms began pursuing growth through mergers and acquisitions, the consequences of such cannibalistic perusal led them down a path to multiple disparate technologies. This has caused customer data to be scattered across multiple customer databases, where data is often duplicated and inconsistent. Typically, customer information is divided in data silos across lines of business with little integration or transparency amongst them; resulting in a single facet of the overall customer profile. For example, the wireless division collects information but often doesnt share it with the TV cable division. There is no complete view of a customer across different channels stores, websites, call centers. This means that a customer calling in to speak with a representative may have a completely different experience depending on the department they speak with. They may receive different information, offers, or advice. As a result, telecoms at any given moment have had a fragmented and inconsistent view of an individual customer.

Currently the developed telecom market must face low GDP growth, stagnating population and high service-saturation levels. The path of the past
In the past, telecom providers have dedicated tremendous energy and resources to customer and company acquisition to develop and grow their businesses; this was a successful business model at the time. Currently the developed telecom market must face low GDP growth, stagnating population and high service-saturation levels. Years of pursuing the same strategy by growing in numbers and acquiring new companies is no
POS system ERP&CRM system Billing system Accounting system Web system

A unified view
Building an integrated customer data set is the first step toward developing a more detailed and nuanced understanding of
BI & Data Warehouse E-Shop

COMARCH LOYALTY MANAGEMENT

File processor Transaction processor Message processor Report engine

Program partners

Business Administration Business to Business

Customer Web Portal On-site Application

3rd party providers

Contact Center

Mobile Application

Letter shop

Card manufacturer

Communication channels

Point of Sale

E-mail

Direct mailing

SMS

www

Call Center Social Media

Mobile

Figure 1. Comarch Loyalty Management Solution Overview.

Building Customer Loyalty in the Telecom Market

customers. The technology and concepts to create a single, integrated view of the customer have been available for many years, but very few telecoms have adopted these methods effectively. Most telecoms have a CRM system with a 360 degree view of the customer; however due to data silos across lines of business and inconsistent sales and marketing strategies and actions and the customer view is not truly integrated. Airlines, retailers, hotels, and many other industries have already recognized the importance of integrating data from every customer interaction and are continuously working to improve in the area.

Currently, sixty-five percent of service providers only initiate a retention process when the customer has started the process of leaving. Loyalty solutions take traditional data provided in CRM, Billing, and Order Management systems such as simple profile information and customer purchases and enrich it by a vast amount of customer experiential data gathered by reactions to loyalty activity. The customer feels appreciated because the telecom is able to offer specific and enticing loyalty promotions. And the telecom is able to use the customers preferences and behaviors to hone their offers and target their customers more effectively. While CRM systems are able to track some customer behaviors, loyalty systems are designed to further uniquely incentivize and reward customers. Loyalty technologies should

Loyalty the next frontier

Building a loyal customer starts by creating the holistic customer profile, but continues by embracing an innovative loyalty and incentive structure that encourages and rewards customers for their continuous business. How do companies decide who is a loyal customer? Typically telecoms focus on increasing ARPU or cutting churn. In fact 90% measure customer loyalty by churn rates. This measurement is ineffectual because it is a determination based upon the potential to churn or churned customers. A loyalty solution allows for a more mature plan where customer loyalty is determined by satisfaction, retention and loyal activity resulting in the ultimate goal of lowering churn and increasing ARPU. There are many options for loyalty solutions points, discounts, rewards, free services, upgrades, etc. The specific form of the reward is not as important as providing relevant, attainable, and economically valuable rewards or services to customers based upon their unique behaviors. It creates an open dialog between the customer and the telecom by providing the customer consistent and meaningful contacts through marketing communications and loyalty promotional offers.

promote the following activities: Using insights into customer behaviors, lifestyles, and interests across all lines of business to deliver loyalty promotions and other offers that increase loyalty and break the cycle of price comparison and deal-driven churn Offer attainable and meaning rewards which will provide the customer with additional value Realizing the differences between customer segments and that varied loyalty promotions and rewards is crucial to the customer experience. Every customer has a different expectation of what is meaningful and valuable to them. In general the higher the ARPU the lower interest in material benefits. These customers may find more value in a benefit such as a customized customer service experience. For customers with a lower ARPU, direct and immediate benefits are more valuable such as discounts, products from a reward catalog or additional minutes Understanding what makes customers loyal and nurture that behavior in the non-loyal group through improvement of the program. The real ROI value of a loyalty program is cloning more loyal customers from the overall customer population Creating a personalized and specialized dialog with the customer by improving targeted marketing and communications. A loyalty program should communicate both the benefits a customer receives by simply being a member of the program, but should also communicate unique and specific promotions which may engage customers in behavior which can earn them additional rewards Utilizing customer recognition tiers to identify and reward the most loyalty and profitable customers accordingly. Investing in rewarding loyal and profitable

By implementing a loyalty solution telecoms can create a strategy where the customer experience and satisfaction is paramount ensuring that their busy lifestyles are supported and enriched.
But what differentiates a loyalty program from traditional CRM is that a loyalty programs aim at proactively and continuously rewarding the customer for loyal behaviors and activity.

Building Customer Loyalty in the Telecom Market

customer is more effective both on cost and retention versus customers in lower tiers who are more apt to churn and are less profitable Leveraging data on preferences to loyalty promotions and reward redemptions Generating secondary revenue by selling aggregated insights to other consumer organizations, such as retailers or consumer goods companies By implementing a loyalty solution telecoms can create a strategy where the customer experience and satisfaction is paramount ensuring that their busy lifestyles are supported and enriched.

Conclusion
Consumers demanding expectations for the newest technologies, personalized services, and a memorable experience require telecom providers to start understanding and approaching their customers in a holistic way. Telecom organizations should overhaul their approach to their customers and customer data. They must reach out to customers proactively to prevent churn and increase loyalty, using a wide variety of customer incentives and rewards.

If you have any questions or comments regarding this white paper, please contact the author: Alina Pyzowski Solutions Manager alina.pyzowski@comarch.com

Building Customer Loyalty in the Telecom Market

Comarch Headquarters Al. Jana Pawla II 39 a 31-864 Krakow Poland phone: +48 12 64 61 000 fax: +48 12 64 61 100 e-mail: info@comarch.com

Comarch Inc. 10 W 35th Street Chicago, IL 60616 United States phone: 1-312-469-1100 fax: 1-312-469-1101 e-mail: info@comarch.com Comarch AG Chemnitzer Str. 50 01187 Dresden Germany phone: +49 351 3201 3200 fax: +49 351 438 97 10 e-mail: info@comarch.de Comarch UK Ltd One Kingdom Street Paddington Central London W2 6BD phone: +44 (0)20 3402 3246 fax: +44 (0)20 3402 3501 e-mail: uk@comarch.com

Poland Bielsko-Biala, Wroclaw, Gdansk, Katowice, Krakow, Lodz, Lublin, Poznan, Warsaw Austria Kirchbichl, Wien Belgium Brussels China Shanghai Finland Espoo France Lille, Montbonnet-Saint Martin, Paris Germany Dresden, Frankfurt/Main Dsseldorf Mnchen Panama Panama City Russia Moscow Switzerland Buchs UAE Dubai United Kingdom London Ukraine Kiev, Lviv USA Chicago Vietnam Ho Chi Minh City

www.telecoms.comarch.com
www.cOMarch.COM www.cOMarch.Pl www.cOMarch.cO.UK www.cOMarch.de www.cOMarch.FR
Comarch is a global supplier of IT products and services for the telecommunication industry, that has been present on the BSS/OSS market since 1993. Comarch provides products in the areas of BSS, CRM, OSS as well as a range of comprehensive services, including end-toend BSS/OSS transformations. Comarchs differentiators lie not only in the compliance of its products with leading industry standards, but mainly in the flexibility of its solutions and approach and the high competences of its engineers. Through projects for almost 50 telecom operators, Comarch has gathered experience in the fields of designing, implementing, and integrating IT solutions. Customers include T-Mobile in Austria, KPN in the Netherlands, as well as E-Plus Gruppe, Telekom Deutschland, Vodafone and Telefnica O2 in Germany.
Comarch Spka Akcyjna with its registered seat in Krakw at Aleja Jana Pawa II 39A, entered in the National Court Register kept by the District Court for Krakw-rdmiecie in Krakw, the 11th Commercial Division of the National Court Register under no. KRS 000057567. The share capital amounts to 8,051,637.00 z. The share capital was fully paid, NIP 677-00-65-406 Copyright Comarch 2012. All Rights Reserved. No part of this document may be reproduced in any form without the prior written consent of Comarch. Comarch reserves the right to revise this document and to make changes in the content from time to time without notice. Comarch may make improvements and/or changes to the product(s) and/or programs described in this document any time. The trademarks and service marks of Comarch are the exclusive property of Comarch, and may not be used without permission. All other marks are the property of their respective owners. EN 2012-09