Our 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 you want me you literally need to romance me, i.e., provide an overall experience that is so compelling I will be attracted to what you have to sell and could even be converted to an advocate if you delight me.
With all of this in mind, Alcatel-Lucent (News - Alert) and Heavy Reading decided it would be a great idea to ask 75 service providers around the world about their feelings and commitments to customer experience management. They delved into the challenges and opportunities of improving customer experience management as a strategic differentiator, and the findings of their efforts are now available for consideration.
The need is acknowledged and spending is on the rise
The survey was sponsored by Alcatel-Lucent’s Market and Consumer Insight (MCI) Program. It quantifies and ranks the CEM elements service providers deem most important. It provides detailed insights into the drivers and barriers they perceive, as well as the solutions they require and the strategies they have in mind to excel in CEM.
Key findings include:
- CEM investment increasing: Two-thirds of respondents expecting to increase next year’s expenditures in this area.
- CEM is seen as opportunity for differentiation: More than 75 percent indicated improved CEM provides an opportunity to attract new business, and two-thirds agree it could improve their brand image and nearly 60 percent were confident it will provide competitive differentiation.
- Common customer satisfaction metrics being measured: While CEM-related metrics are clearly valuable to service providers (e.g., customer satisfaction, network and service availability), the study shows that there is a strong desire to take measurements more frequently — with 75 percent agreeing that measuring their top five metrics more often would have a significant impact on their ability to deliver a superior customer experience.
- Widespread agreement on activities influencing CEM: Respondents agreed on several ‘bread and butter’ activities that impact the customer experience. Nearly 90 percent cited the importance of answering customer queries and resolving problems in a timely fashion. Other activities (such as prioritizing network quality of service based on the value of an individual customer) are seen as relatively less important.
- Barriers to CEM implementation remain: When asked about potential barriers to implementing CEM, more than 50 percent half listed difficulty in securing cross-organizational cooperation. Almost half of respondents saw poor data quality as the second-to-top barrier.
The tale of the tape is in two interesting charts from the study. The first one looks at the view of the drivers for CEM investment. Not surprisingly, quick response tops the list, followed closely by having an order filled promptly and filled correctly.
The above may seem a bit obvious. However, where things get interesting is the list of CEM metrics that were deemed important as shown in the second chart. Customer satisfaction rightfully sits at the top and the rest is mostly about having the right user profile to identify problems and solve them quickly.
While admittedly a service provider perspective that was done mainly with operations people, it is interesting that as we move from all you can eat data plans to usage-based billing and a variety of new business models for dealing with data usage and the quality associated with various experiences, billing satisfaction did not make the chart. One suspects this is likely to radically change in the not distant future.
That said, the author’s observations about the findings were noteworthy.
“One thing that jumped out to me is how serious service providers are about understanding the experiences that their customers have with various products and services, so that any problems can be corrected and customer loyalty can be improved,” said Greg Owens, senior marketing director, Customer Experience Solutions (CXS) at Alcatel-Lucent.
Added Caroline Chappell, senior analyst at Heavy Reading: “Service providers are looking at customer experience management to differentiate in an increasingly crowded and competitive market. They are all approaching CEM from different starting points, however, and typically find it difficult to implement it in a holistic, differentiated way. Our survey results have yielded a rich stream of insights into service provider CEM, particularly around their specific reasons to invest in CEM.”
In speaking Owens and Ajay Pande – Solutions Marketing Manager, Customer Experience Solutions (CXS) at Alcatel-Lucent, I resonated with Pande’s view; “CEM is not a one point solution. It must be holistic and end-to-end. You cannot get a handle on how much improvement there is without a thorough understanding of all the moving parts and the trick is going to be turning insights gained into actionable intelligence.” He added that, “CEM is being appreciated as strategically important, and there is recognition that it is really about business transformation. No one size fits all, and having a partner with deep experience and strong professional services will be key. We think Alcatel-Lucent is such a partner based on the fact that we have been working in this space for over 10 years and our the level of customer satisfaction of what we provide our customers is excellent.”
It is great to have quantification of the CEM feelings and plans of the service providers. The cautionary note here is the juxtaposition of the author’s view that a holistic approach is mandatory weighed against respondents views that their own cross-organizational issues are major impediments to installing CEM capabilities that are optimized to move the chains with service provider customers as to their perceptions of the value they are receiving.
The timing on the release, on the heels of what has amounted to 10 days of smartphone euphoria as the Android (News - Alert) ecosystem launched new products to take some of the steam out of the iPhone5 release by Apple, was prescient. The device and apps are how we experience intimately the capabilities of mobile devices, but it is the service providers whose throats we want to choke when things go wrong.
And as the SPs have found out, reality can be a harsh taskmaster. It is estimated that up to 15 percent of new phone sales are returned, that two-thirds of those returns are of devices with no problems and that the average return cost $50.
In the U.S., when you add in the service provider subsidies of the devices, there is little wonder why CEM investment is so important. And, why service providers have growing interest in the Alcatel-Lucent Motive Customer Experience Solutions porfolio of solutions that address directly the challenges of CEM.
The survey is a nice snapshot in time. I suspect it may look quite a bit different this time next year.
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Edited by Braden Becker