Dears,
The telecommunications industry is engaged in a number of different battles, each one with a particular history and strategy. At present we have at least two very important battles in place: the voice battle and data battle between wireless, wire line, cable and satellite. The situation inside each battle is very chaotic and complex to analyze. However, we can identify some significant trends inside each battle.
In the voice battle, we can identify at least two very important worldwide trends. The first trend shows the movement from the corporate market to the mass market in the wireless industry, and the second one shows the substitution of wire line by wireless. The movement toward the mass market has been creating cost challenges and changing the CRM processes structures. Many carriers will have to enlist the aid of complex and expensive database CRM tools simply to identify their customers, now concealed among the masses. Now the wireless companies are using many CRM and sales strategies (prepaid, Postpaid,one-rate plans) to acquire new good customers and to deepen the relationship with them. However, one of the most important effects of this movement is a decrease in average revenue per user (ARPU), forcing companies to try to increase their wallet share.
In developing countries the numbers tell the same story, showing that these countries are leapfrogging intermediate technology, going straight to use of state of the art wireless technology and following developed-country trends. One of the effects of the prepaid strategy is the difficulty companies have in identifying prepaid customers. Many times billing systems do not store data about these customers, transforming them into huge anonymous segments. This means that these customers will be harder to identify when carriers try to market news and information services (wallet share improvement campaigns) or unified messaging (fax, e-mail and voice mail). Those add-on applications will be necessary to increase minutes per use, which have been declining.
The data battle is the most complex and may be the most important. The complexity of this battle starts with the huge number of players, including wireless, wire line, satellite, cable and companies from different industries such as the IT,Telecom,Hitech industry, all trying to define the standards. The data battle is probably the most important because if we consider voice transmission as a particular case of data transmission (IP telephony, cable phone), this battle could include part of the voice battle. We can split the data battle into two sub-battles, the first focused on mobile data transmission and the second on no-mobile data transmission. To get a better sense of the mobile data transmission sub-battle, imagine a salesperson or an executive, out of the office, trying to connect his or her notebook with the company intranet. He or she can use wire line or wireless technology to make this connection. Forecasts are showing an exponential growth for this kind of mobile data transmission. In the no-mobile side we can imagine a similar person trying to access the Internet from home or from the office. In this case, he or she still has the same first two options (wireless broadband for instance) but technologies like ISDN, DSL, cable modem or satellite dishes (PC Direct) can also be chosen to make the connection.
Telecommunications companies around the world have been trying to adapt themselves to every new market force, constantly changing their organizational structure in order to react quickly and remain competitive. They expect that the changes will stop and the chaos will decrease in the short term. However, this is unlikely to happen, so companies need to continue to adapt. We suggest that a necessary condition for success is to optimize core CRM processes and establish a competitive advantage in each one. The four core CRM processes are:
- Wallet-share enhancement (increase revenue from existing customers);
- Acquisition (new customers);
- Affinity (customer loyalty);
- Retention (preventing customer churn).
Each CRM process has four steps:
- Prioritization and goal setting: deciding what to focus on and building teams that pursue those objectives.
- Modelling: performing segmentation, scoring, and other kinds of analysis that help CRM decide which campaigns to develop.
- Campaign development: choosing, creating and preparing the advertising medium and the message to be delivered to customers, as well as running tests to validate the CRM assumptions.
- Campaign execution: actually sending the messages through the respective media.
The CRM process has to deal with many different sources of input, feedback and impetus. In fact, in most telecommunications firms there is so much input, from so many different sources, with so many different and contradictory objectives, that it is easy to lose control over the whole process very quickly. This step may be extremely dysfunctional in some organizations, nonexistent in others, and well run in only a small percentage of cases. Most of the major challenges to the execution of the CRM process occur here, in the area of prioritization and goal settings. During this step of the process, the major components of a CRM plan are assembled. These steps involve identification of sponsors, creation of projects, assembly of teams, identification of objectives, and identification of constraints.
Once the project team has been assembled and financed and the objectives have been clearly stated, the team moves from prioritization and goal-setting mode into modelling mode. A model is a proposal of the method that will accomplish the sponsor's objectives and the mathematical proof that shows the proposed solution is reasonable and viable. The goal of modelling is then is to develop a plan, or a series of plans, that will accomplish the goals. The modelling process is where most of the analytical disciplines are employed.
Once the modelling process has been completed and the decision has been made which model to use, the job of CRM shifts from the modeller to the campaign developer. Campaign developers turn the model into a specific, executable plan. There are several processes involved in campaign development.
- Media and message finalization: deciding on the specific message to use and how it will be delivered.
- Media selection and negotiation: choosing specific organizations and individuals to deliver the messages and negotiating the cost of delivery. Media selection is often influenced strongly by the time frame for the message, or the target group.
- Prospect targeting and list scoring. In the case of direct mail and telemarketing, one of the main jobs of the campaign developer is to select the list of prospects and to determine which specific people on that list will be targeted.
Once the campaign for a given time period (monthly, quarterly or annually) has been developed, the marketer will be responsible for setting it in motion. It may involve nothing more than making a phone call to the advertising agency, or may be as complicated as initiating and monitoring the day to day activities of a call centre or mailroom operation. Once the message is delivered, the company is ready to analyse the results.
To continue our effort to construct a logical structure to represent the core CRM processes we need to understand all sources of influence and how they impact these processes. We can categorize the major sources of influence in three different forces.
The support force works as a floor for the CRM processes. We can split the support force into three different components:
- Techniques: specialized processes, procedures and techniques such as optimization, data mining and data;
- Telecomms CRM skills: specialized skills needed to manage the whole CRM process;
- Technology: the systems tools and data collection necessary to make this happen.
These components could actually be broken down further into different sub-components. For example, the technology component could be divided into a query system, to include the OLAP tools, data warehouses, data-marts and all the legacy systems; analytical systems for all of the optimization, data-mining systems and tools (this subcomponent is very important for defining the optimality of many parts of the CRM process); and finally process management systems, to include systems such as campaign management. The implementation of this particular sub-component is very complex because of the complicated trade-off between the tool and the internal processes of the company. When a telecoms company buys this kind of tool it is really buying a process that often does not match its current CRM processes.
The motive force works as an engine for the CRM process. This force is responsible for pushing the whole process forward. The more important components in the motive force are:
- Corporate strategy and goal setting;
- Competition;
- New technologies and innovations;
- Market (customers and prospects).
The influence of the motive force within the core CRM processes is both very important and difficult to analyze. Companies often construct dedicated mechanisms to help them to understand fully all of the different components and how they affect their business environments.
To understand the spoiler force we need to think of the spoiler on a race car, an accessory that adds to traction and steering capabilities, but can also slow down the car's progress based on its angle and how it is used. This spoiler force can be used to help or hinder the company's CRM progress. Components of the spoiler force include:
Each one of these components has an enormous influence on the CRM core processes. For example, network infrastructure can work against marketing by creating a physical constraint for any acquisition campaign, or can work as a competitive advantage, helping marketers in the same kind of campaign.
Well we can go on and on with ways and means to conquer customers in Telecom space provided we have the right CRM path and direction in place
Loving P&C
DC*
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