We are living in a period of economic turbulence that we have not experienced in the last couple of decades, and this urges people basically in all income groups to scrutinize every line of their spending. Obviously, this exercise will not leave telco or communications-related spending untouched either, and this presents a new challenge to CSPs.
When telco customers contact their call center agent or retail store mid-contract to say that they want to reduce their monthly spend, the service provider has to make a decision about how to respond. They can either a) hold the customer to the terms of their contract, b) offer them a lower-priced basic service but with the attraction of additional services to keep monthly spending the same or c) allow them the flexibility to change their plans and reduce their spending?
CSPs are aware of the delicate situation some of their customers are in, and they need to find the right balance in offering them a short-term relief, but also keeping them as happy and profitable customers on the long term. Telco companies constantly refine their approaches to dealing with such situations based on customers’ history, for example, their monthly spend and lifetime value. But soaring inflation and the cost-of-living crisis affecting people worldwide is presenting operators with a more generalized set of challenges.
The adoption of fixed, mobile and TV bundles is one trend that may be impacted by the changing conditions. Recent years have seen a trend towards bundling, but if customers are seeking to reduce their monthly expenditure or increase the value they get, there may be a drift towards unbundling. So, they need to change their bundle contents or unbundle to be more flexible in their choices.
There are also other options that might bring savings or better deals for the customers. For example, households which, for many years have held onto their fixed telephone lines even though they only really use them for incoming calls, may decide that the time is now right to cut the cord. Although it looks like a loss of business at first, actually it can also be a positive trend for operators who would like to shut down their PSTN businesses in the future and will also help to increase mobile usage.
Customers may also be worried about the total amount they spend on the data they are using either through mobile or WiFi. Operators can respond to this by offering larger data buckets for existing prices which can give customers peace of mind about how much data they are using.
Investing in stronger customer relationships
Given that many CSPs are still bound by their rigid legacy system capabilities and offer structures, it can be difficult for them to find a solution for these challenges that is both technically feasible and leaves both parties happy in the short and long term.
As CSPs help their customers to navigate the options and permutations that suit them best, responsiveness and flexibility will be key. Switching new products on and off, scaling services up and scale down based on customers’ particular circumstances, and putting a service on hold for a few months rather than canceling it altogether will all help to deliver a better customer experience. Without such capabilities, CSPs risk appearing inflexible and unhelpful in the eyes of their customers and can lead to dissatisfaction or even churn.
This is also a time when operators’ mobile apps have an important role to play. Making changes to the services that they receive via an all-digital mobile app can be a massive time- and cost-saving experience both for the customer and for the operator.
During the pandemic, we have seen many development efforts accelerated, out of sheer necessity to provide business continuity in many cases. Maybe the current economic situation does not compare to that period, but it will certainly boost CSPs’ transformation efforts further, to implement flexible systems and have the ability to rapidly adapt to changing customer needs, behaviors, and preferences, and be able to respond quickly to customer inquiries and concerns.
Telcos need to implement modern, AI-driven technologies that allow for omnichannel management of customer data and interactions, and enable more flexible and personalized engagement with customers. They also need to adopt agile processes and a customer-centric approach, and prioritize the requirements and expectations of the customers, which allows them to adjust their consumption as needed. Having these flexible and responsive systems helps companies to better understand and serve their customers, leading to higher satisfaction, improved brand loyalty and stronger long-term customer relationships.