Constant customer churn is the bane of telcos with some now turning to 'proactive customer conversations' to address the notoriously complex issue.
Ask any telco about the thorny issue of customer retention and they'll likely roll their eyes while pointing to one simple stat that packs a serious punch: 77% of consumers retract their loyalty more quickly than they did three years ago, according to an Accenture survey, with “price-sensitive consumers … more prone to switching providers," says Oracle.
This issue means telcos must create innovative strategies to retain their customers before they decide to walk away — especially those who represent a high churn risk. Get it right and the rewards could be significant. For instance, Bain & Company suggests that a mere 5% increase in a company's retention rate can boost profits by 25% to 95%.
The age-old question remains though: How do telcos actually retain high risk customers? After all, simply starting a price war with competitors doesn't cut it in the modern marketplace anymore; all it triggers is a race to the bottom that slashes already tight profit margins.
Provide great customer experiences, not 'special' offers or 'too-late' apologies
To navigate through the retention landscape successfully, savvy telcos must increasingly focus on improving experiences through out the customer journey. And many telcos are clearly taking heed: According to Telecoms CEM 2020 Investment Trends, 60% of telco leaders are aiming to invest over $500,000 to optimize customer interactions using CX management solutions, with 50% placing digital customer experiences as a top-three spending priority.
On the face of it, that's great news — but only so long as that investment is spent in the right areas so the churn issue is properly addressed.
Learn how to reduce customer churn through proactive conversations in this infographic:
Make customer retention a cornerstone of customer acquisition strategies
In order for telcos to be successful in retaining customers, which is far more cost efficient and sustainable than acquiring new customers, they first need to implement three key retention pillars to create the right platform for introducing deeper, more meaningful conversations between the brand and its customers:
1. Make it personal
It's essential that telcos deep dive into their customer bases, analyzing and learning from past negative customer service experiences. By identifying the tell-tale signs of when a customer is about to walk, the telco can create personalized responses to individual customer pains.
After all, a Salesforce survey has found that 70% of consumers say “a company's understanding of their individual needs influences their loyalty," while 69% say the same about personalized customer care. By building up a full understanding of customer interaction histories and identifying retract triggers based on different sets of cancellation data, telcos can create retention strategies that drive down churn rates.
Remember too that not all customers respond to the same offers. By identifying what works and what doesn't based on personal customer histories, telcos can offer targeted responses designed to address the customer's specific issue whether it be related to price, benefits, or another pain point.
2. Make it immediate
With a personalized view of customers, telcos can act proactively to issues as they arise, instead of waiting until the consumer decides to jump.
Traditional 'quick fixes' such as offering discounts or an apology to customers for, say, poor customer service, just aren't working for 61% of telcos anymore, says Techsee. As for loyalty and reward schemes, such customer 'treats' may be beneficial but also increase operating costs by 10%-20%, says CEB, leading to serious questions about such schemes' ROI.
By keeping track of the customer's journey and contact center interactions, such 'blunderbuss-like' instruments can at least be de-prioritized, superseded by precise insights derived from, say, threads of conversations drawn from messaging between the customer and the brand (see below). These can be quickly and easily analyzed to help spot a consumer who may be unhappy and about to leave.
Such an ability is vital for reducing churn while stealing a march on laggard competitors. Chat apps' immediacy also allows the telco to reach out to the customer in moments, delivering a targeted offer right to the channel with the hightest open rate.
3. Make it effortless
Removing effort and hassle from customer journeys is proven to hugely increase loyalty rates.
Consider that 96% of customers who are forced to put serious effort into their brand interactions become more disloyal, according to Gartner. Conversely, only 9% of customers who enjoy effortless experiences become disloyal.
Perhaps this shouldn't come as a surprise. After all, who actually enjoys having to search through spam folders to find that errant customer services email? Make phone calls in order to set up a new service or resolve an issue? That's right: No one. But how do telcos remove such friction from the customer's journey? Simple: Chat apps.
Being proactive means having real conversations with customers
With the three retention pillars in place, telcos can now focus on how they interact with high-churn-risk customers. An essential element is the leveraging of digital conversations conducted with customers on their preferred channels.
It's why more and more telcos are choosing to connect with their customers via popular messaging platforms such as WhatsApp, the world's number one chat app. For instance:
• Orange Spain deployed WhatsApp Business and held 1.5 million+ conversations over the channel with 80% of the 650,000 customers served recommending the channel.
• Vodafone Germany served over 350,000 customers via WhatsApp Business over five months, plus achieved 700,000 conversions with a 45% higher opt-in rate compared to SMS.
Such figures shouldn't come as such a huge surprise. After all, the chat app is already an essential part of many consumers' lives; a place where they can hang out with friends, family, and colleagues. This, in turn, makes WhatsApp an obvious channel for customers to engage with brands on — and vice-versa. And because of WhatsApp's end-to-end encryption, consumers are also more likely to discuss their wants because their privacy is being protected at all times unlike, say, email.
Why WhatsApp doesn't just mean gains for the customer
For the telcos, the benefits are just as great. The text-based threads of WhatsApp conversations make them ideal for analysis, helping to identify when customers may be about to move, and giving telcos the heads-up they need to make a targeted intervention. The messaging platform also offers an array of practical customer loyalty-building opportunities as well — from sending out alerts when a customer's contract is nearly over with personalized renewal offers through to a plethora of cross-selling opportunities.
Critically, by introducing the three retention pillars, telcos can remove the roadblocks to effective CX that often arise when relying exclusively on call centers (think waiting on the line for an agent). And WhatsApp remains the de facto choice because of its huge reach and established user base of over two billion. Best of all, by using WhatsApp, telcos can integrate its interactive features such as quick-reply buttons right into their messages and offers, creating an experience that's personal, immediate and effortless — perfect for fighting churn and retaining customers.