MNP: Creating Customer Engagement Strategies in an Evolving Telecom Landscape
Mobile Number Portability (MNP) is a MNP that will allow a mobile service subscriber switch service providers without having to change his/her mobile number. India has more than 700 mn subscribers with nearly 10 operators in each regional circle.
Today, with MNP available to millions of subscribers, it would be interesting to see how consumers react to this potential telecom environment game-changer and resultant marketing strategies adopted by service providers.
Let us attempt and understand the overall impact of the wireless ecosystem by uncovering what MNP means to subscribers and then to the service providers.
For the Subscriber: this is reaffirmation that the ‘Customer’ is still the ‘King’. Exit barriers for customers who placed substantial equity on their mobile numbers are no longer high. Issues that are less dependent on individual biases get relegated and more provider driven factors such as costs/call-quality/service/experience suddenly get the attention they merit.
For the Service Provider: MNP is a potentially disruptive technology in an already competitive market. Operators suddenly find themselves facing questions on how to optimize resources in this changed scenario- acquiring customers through short-term offers or enhancing existing subscriber engagement to improve loyalty and retention. Summing up the effect, the limelight falls on businesses and operational ‘efficiencies’. Scaling up on capabilities to address the empowered ‘captive’ or potential customer will be paramount. Right from ensuring optimal utilization of budgets, to acquire the right type of customers, to going all-out to ensure consistent engagements and interactions that are measurably meaningful to the existing subscriber.
Expected Churn Ratio
Preliminary empirical MNP data hints at a mere 1% impact to customer attrition. With an industry seeing a monthly churn rate of 4.5-8%, the forecast does not seem to perturb many. This sentiment is echoed by most of the service providers where predominant messaging is aimed at luring competitor customers rather than focusing on engaging (and retaining) their existing subscriber base.
As has been the case with most volume and distribution driven industries, the focus in telecom has always been gross-additions. The mantra being acquisition without a concerted focus on distribution efficiencies or loyalty-driven revenue enhancement, VAS and other ARPU enhancing measures are gimmicky and do not conform to a predictable pattern that encourages sustained spending habits.
The number of subscribers opting to shift providers, the MNP route as with any ‘new technology adoption’ would be limited in the first few months, as many are waiting for references of positive ‘port’ experience. MNP spurred churn could gain momentum, driven largely by higher levels of awareness and comfort with the ‘concept’ and/or lure of seemingly lucrative competitor offerings.
While it is understandable for the new and incumbent service providers to use MNP as the primary acquisition tactic, the strategy for larger players should be to carry out implicit acquisition campaigns while ensuring that the support system for existing customers is enhanced.
Service providers should ideally be looking at focusing their energies to limiting the impact in the ‘mid-term’ where ‘positive port experience’ could fuel further churn.
With MNP in the picture now, if the existing customer/revenue leakage is not contained, it suggests that the operator has fundamental issues or gaps in his existing service delivery model. It would be safe to assume that these reasons would lead to the very same churn from newly acquired customers over time. Referrals and word of mouth have a strong influence on decision making. Sooner or later the newly added subscriber will face the same issues resulting in customer churn and the vicious cycle will continue.
The Difference Maker: Customer Ownership Through Enhanced Customer Experience
MNP might be a ‘minor’ extension to existing churn-propensities, but it has definite potential to create volatility in the telecom market. With service providers spending millions on brand-building, basic good old customer loyalty is being put to test.
Customer Engagement-Ready for MNP
Customer engagement becomes an even more critical pillar in the retention strategy; from adoption to mature use of a service, there are points where the service provider could ‘push’ certain ‘value-added’ (and billable) features. In the long run, no customer will continue spending on a service he/she does not see continuous value in; this in the telecom scenario has resulted in offers such as per-second-billing, pay-per-site (for internet access), etc plans. It is imperative that the service provider builds a system that studies individual subscribers at a granular level, not so much as to build short-term revenue enhancement through services with ‘transient’ customer value, but to ensure customization of offerings with continued and tangible value to the user.
There are a few dos for a strong customer engagement strategy:
“¢ Technology, Systems and Data: Revisit information you have on your customers. Are the data fields sufficient? Are they relevant? Is the data up-to-date or valid? Does your database allow scalability? Is there a system to unobtrusively collect and validate information when required? Are you capturing customer footprints at every possible touch-point? Ensure customer information systems are integrated to provide marketers a single-view.
“¢ Insights: Create analytics-driven, actionable consumer insights. Use call behavior, past interactions with the company and basic transaction data as the source. Monitor factors within the larger ecosystem to capture information that might have a bearing to behavior while using your service. Many operators have made significant investments in churn modeling software, yet they fail to show RoI due to lack of focus or intent.
“¢ Consumer Awareness: Educate your customers and empower customer decisions that are best suited for him/her in the long run.
“¢ Personalize: Customize every interaction at every possible touch-point; be it an SMS, an electronic mailer, an outbound call or a visit to your website. Every interaction has to be meaningful. Give each and every customer an offer they are most likely looking for at that very point in time: the right offer at the right time and through the right channel.
Having meaningful and holistic engagement processes in place, service providers would be well tuned to customer needs while addressing concerns and future requirements to ensure the customer is bonded by dialogue. Rather than looking at it as a way of ‘upping’ exit barriers or increasing switching costs, the intent ought to be giving the customer no reason to consider switching providers.