Increasing customer retention in a highly competitive environment
It is not news to anyone who works in the telco industry that retaining customers in a particularly turbulent and competitive market is bloody hard.
It’s been reported that average rates of churn can approach 67 percent (Middleton, 2022). This is a scary number but adopting best practices like seeking and acting on feedback, rewarding loyalty, serving offers aligned with the “moment of truth” are triggers of good and bad customer experience that will build that trust and value.
The most forward-thinking brands like amaysim are changing how they view customer engagement and they are increasing retention budgets as they go, recognizing that keeping a customer loyal is often more important than acquiring new ones into their funnel. There are demonstrable examples where a 5 percent improvement in retention rates has correlated to increased company profits of 25 percent (Bain & Company, Sasser 2014).
We’ve outlined some of the key insights to consider when you are building or revisiting your retention approach:
1. Driving engagement
It is no longer enough to only contact customers when you want something from them or to renew or upsell to them. Strategies should be put in place that allow for a multi-channel, conversational, and responsive approach, keeping customers engaged, feeling valued, and listened to. Applying this to both proactive and reactive communications with them is equally important. A business needs to listen to its customers as much when they are unhappy about something as when something needs to be celebrated.
2. Personalization and customer understanding
Within that engagement, customers should not feel like just another number in the ranks, but a fully appreciated and regarded person. Using the existing data that companies have on file about a customer can help in doing this. Ensuring awareness of the big moments in their lives, their communication habits and applying predictive analytics that leverage partner solution, such as Sourse.ai, enables Telco providers to anticipate key moments and increases positive sentiment.
Other incentives like loyalty programs and thoughtful offers or a relevant upsell can also add surprise and delight elements that get customers talking about the excellent service whilst remaining loyal.
3. Building trust
Build trust by instilling robust security procedures and safety practices within this strategy to ensure that customers are confident in the business. Whilst security and protection of personal information is everyone’s responsibility (including the customer) businesses can showcase they are respectful of the worries many customers have about being scammed.
From removing embedded links in SMS to not asking for Personally Identifiable Information (PII) within communications, this can help avoid consumers ignoring official correspondence for fear of being hacked. Service Providers can also assure customers they will only ever engage with them via a single phone number protecting the history of the communications and enabling that 2-way engagement.
Influencing the key metrics that matter
The leading performance and financial indicators of retention and acquisition are inherently linked together. By implementing the above into an effective proactive retention strategy and leveraging value-driven campaigns underpinned by agile retention software a telco can expect the following shift in these key metrics:
- Improving engagement rates
- Increasing APRU
- Improved NPS
- Improved EBITA
- Lower churn
- Lower Cost of Acquisition
As the reliance of customers on Telco services continues to increase, companies who put focus on retention will see greater dividends long term. It has become necessary that Telcos go beyond solely considering omnichannel digital communications as useful for marketing and acquiring new customers. Pivoting to truly leverage this value from customer engagement will increase customer retention.
To finish, here is one way you can easily put this into practice: Move away from the one-way push notifications everyone receives and regularly ignores. Engage customers with a unique value proposition based on something relevant. It could be an offer tied to an event, the location the customer lives or even based on their travel habits given all of this data is available. It could be as simple as discounted concert tickets when the customer’s birthday is coming up — using SMS as the channel used based on a higher likelihood of the customer actually seeing the message and then being even more likely to engage.
Rick Lanman is Strategic Accounts Director at Pendula his role helps organizations engage their customers and build trust and loyalty through conversational digital communications. Pendula is an Australian scale-up organization that has built the world’s first proactive retention platform.
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