The First 90 Days: Differentiated Experiences That Combat Churn and Reduce Care Costs

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1 The First 90 Days: Differentiated Experiences That Combat Churn and Reduce Care Costs An Executive Brief for Telecommunications Leaders December 2012

2 Introduction The telecommunications industry is characterized by high churn, minimal differentiation, complex billing and high customer care costs. On average, leading mobile and cable operators are adding 150,000 or more subscribers on a monthly basis, and churn rates can range from 10 to 20 percent annually. In the US market, specifically, long-term contracts minimize attrition with new mobile subscribers; however, cable operators can lose upwards of 25 percent of new subscribers in the first six months. The first 90 days of a new subscriber coming aboard is when successful customer relationship strategies start, yet are also commonly the most costly from a care perspective. Successful customer relationship strategies start with the first 90 days of a new subscriber coming aboard, as this is when service providers have the best opportunity to not only turn new customers into brand advocates, but also upsell them on value-added products and services. To remain competitive, service providers seek to ensure customers quickly value the service they receive so that they will subscribe to additional services over time and stay with them for the long term. The Telecommunications Industry by the Numbers: More than 150,000 new subscribers per month 10-20% annual churn rates Up to 750,000 support calls per month 8+ minutes support call AHT $5-$8 per new subscriber support issue Unfortunately, for the telecommunications industry, the first 90 days are also commonly the most costly from a care perspective, as this is the time when the greatest volume of contact center inquiries are received, and usually related to billing. A midsized provider, for example, can receive 150,000 support calls per month, while a large provider receives upwards of 750,000. With an average handle time of more than eight minutes, new customer support calls range in cost from five to eight dollars per issue. That translates into significant customer care expense, not to mention, limits service providers ability to expand the relationship within the first 90 days. During the first 90 days, new customers need to be reassured at every touch point that they made a good choice, starting with the welcome experience, continuing with the delivery of their first bill, and once they become active, in the context of their usage patterns. If new customers are engaged in a manner that is informative and relevant, the likelihood of gaining their trust and increasing levels of brand engagement, and hence loyalty, is high. Contextualized Customer Engagement with SmartVideo With use of SmartVideo at every customer touch point, new value opportunities exist to enhance service providers first 90 day initiatives: Customer care cost containment ARPU (average revenue per user) growth Increased Net Promoter Score Increased differentiation and competitiveness Proactive churn reduction 2

3 New Customer Onboarding With SmartVideo, service providers are able to proactively onboard new customers with an engaging and effective welcome experience that fosters brand loyalty and reduces contact center calls (cost). Facilitating personalized customer communication with SmartVideo is more helpful to customers than mass communication tactics, enables more targeted calls to action, and is measured and optimized for results. SmartVideo builds advocacy and loyalty, while containing care costs. Upon purchasing or changing service, subscribers receive the SmartVideo via , SMS, or when logged into My Account. The content of the video reminds the subscriber of his initial commitment and provides education on key elements of the new plan or device purchased, first or updated bill, and any actions to be taken. The video also introduces value-added products and services, such as paperless statements, autopay, protection plans, accessories or rewards programs. Success is measured by reduction in average handle time of related calls, take rate of value-added services, and customer satisfaction rate. Figure 1 shows SmartVideo example scenes presented to a wireless customer to increase activation rates inside of 30 days, as well as adoption of self-serve tools. Figure 1 The ordered device, arrival date, plan features and pricing are all confirmed to the customer. Due to high device return rates, provide the customer with getting-started tips, such as this contact transfer tip. A marketing scene can be used with upsell or cross-sell offers based on the customer s profile. This scene encourages account management via My Account or the mobile app. 3

4 First Bill Delivery Consumers are easily confused by their billing statements, which can lead to excessive support costs, churn, as well as create barriers to expanding customer relationship within the first 90 days. SmartVideo reduces related care expenses while increasing brand engagement. SmartVideo allows service providers to proactively address the complexity of bill administration with a personalized video presentation. Video is a friendly and more engaging format than a multi-page statement and can actually explain the charges to the subscriber in a personalized and easily digestible manner, ensuring he or she receives only the relevant and necessary billing details. SmartVideo bills also increase stickiness and uptake on value-added services, such as paperless billing and autopay. The result is reduced calls to the contact center and decreased time spent on such calls. Companies, therefore, significantly reduce customer care costs related to bill queries while offering a deeper level of brand engagement and improving overall customer experience. Figure 2 shows example scenes from AT&T s SmartVideo bill for new customers, focusing on key inquiry types. Figure 2 4

5 Customer Retention With SmartVideo, service providers can proactively engage at-risk customers with offers tailored to their patterns and needs. A personalized video is created on the fly for each customer, providing awareness and education on current usage and, based on those patterns, recommending the best option that serves each individual customer s needs. Recommendations may include paying less for a current plan or changing to a new plan. From within the video, the customer may click a call-toaction to renew, refine or upgrade his contract. SmartVideo reduces churn and fosters loyalty by proactively aligning usage patterns with service value. Using SmartVideo in support of retention initiatives promotes transparency, ensuring an optimal brand experience, building customer loyalty and ultimately boosting ARPU. Success is measured by take rate of new pricing offers and plans, as well as reduction in churn rate. Figure 3 shows SmartVideo example scenes tailored to a wireless customer s usage patterns and plan needs in order to reduce churn. Figure 3 The introduction consists of the brand and a personal greeting. Current service features and benefits, rate plan and usage history are explained. Service benefits are presented to create value awareness. A new offer scene presents a recommended service plan, including the service features and financial benefits. 5

6 Customer Engagement in Context Engaging customers in a contextualized manner means tailoring experiences based on data and attributes that can be behavioral or truly personal to the individual. Figure 4 offers example contextual attributes that service providers may leverage in a SmartVideo to deliver engaging and effective customer experiences. Figure 4 Profile attributes: Persona Demographic Psychographic Segment Geographical Product or service type(s) Number of services Tenure Service plan features Historical attributes: Payment history Login history Plan details Plan usage Authenticated Recommendations Customer status or value type situational attributes: Shipment or installation details Seasonal Time of day Time remaining to redeem offer Device, browser 6

7 About sundaysky SundaySky is the creator of SmartVideo, a newer, better, smarter way of using video to communicate at every stage of the consumer lifecycle. SmartVideo delivers a compelling, personalized, real-time video experience designed to reach people with what they need to know in the most engaging, entertaining and informative way possible. Our platform generates hundreds of thousands of SmartVideos daily that target prospects, convert prospects to customers, support customers, and foster long-term loyalty and value. SundaySky SmartVideo customers include leading customer-centric organizations like AT&T, Lenovo and Office Depot. Learn more at Tel:

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