Venturing into customer attitudinal analysis for effective customer segmentation

– By Bhavna Appayya, Tecnotree CLM Product Analyst

The telecom market has become intensely competitive, thus, driving down margins while demanding constant innovations from the Communications Service Providers (CSPs). Now players in the market have to make a sincere effort to understand their customer base better, and, ensure the service given is not only satisfactory but also optimum, hence safe-guarding the interests of the network.

A “typical” telecom customer can differ depending on his/her region and culture. While markets of Europe, North America and parts of Asia have matured, the BRIC economies have shown consistent and high rates of growth. Nonetheless, despite the explosive subscriber and revenue growth in many parts of the world, the rapidly falling average revenue per unit (ARPU) has been a reason for concern. It goes without saying then, that CSPs need not just an intimate understanding of the USPs of their products and competition in the market, but also need to ‘know’ their potential customer.

CSPs primarily use segmentation techniques to determine their targeted customer – there being many established approaches to this for different business environments such as based on purchase history data, occupation, web-tracking data and division of the customer base into rural and urban. However, once a CSP has broadly established who the potential customers are, it is also essential to determine how they respond and react and what their motivations are in the context of the products and services on offer.

The question, that arises here is - are these means adequate in the rapidly evolving telecom environment? Signs from the market probably point to a need for more, CSPs need to look deeper and further at ‘profiling’ to find that increasingly elusive ‘perfect’ customer. Basic demographics are important, but, CSPs can’t afford to ignore factors such as customer attitude, behaviour and motivation. They should know who/what their customers associate with, what technologies they use, online interests they have, and anything that can pretty much be linked to the benefits of the services being offered. Effective positioning powered by such related attitudinal analysis and actions can improve customer satisfaction, customer loyalty, and thereby boost the revenue.

CSPs would most definitely benefit from keeping up with customer interests and trends they are glued to. An example would be the popularity of smart-phones and web/mobile applications in the lives of consumers. Thus, application stores and offerings stand to become brand differentiators, though; one should identify the patterns in the demand for innovative applications and enhanced user experiences. A sophisticated business user might want an app giving information on new restaurant openings or the latest stock tips while the rural customer might want a low-cost app providing crop and weather alerts, or e-learning through video and other multi lingual applications. Another interesting approach would be to minutely study the behavioural differences in how two demographically similar consumers perceive the features/benefits of a service and tapping into the vast pool of information available through various open channels such as social networking.

While all this strategizing takes place for acquiring new customers, CSPs should not lose focus from retaining existing customers. Say I am an existing customer, should I not expect equal if not better renewal privileges than a potential or new customer? If not, then “I” the customer would begin to feel cheated and, undoubtedly, look around for options. This, in turn, would punch a hole in the CSP’s already existing revenue base and market share. The key here is to design or extend tariff plans and campaigns keeping the profiles of all types of customers in mind – New or Existing. Taking cue from the airline or banking industry, CSPs should define “customer driven programs” - using telecom value scores to be billed against different customer profiles.

With the explosion of hyper-connectivity through social networks and increasing information access penetration, a typical generic subscriber base is a massive ‘melting-pot’ of varied experiences. Thus, it is vital that CSPs adapt to the modern and empowered customer by formulating a robust and intuitive customer strategy.

In a nutshell - CSPs need to look beyond the existing means of customer segmentation for effective targeting and for staying relevant!