Global Operators Beset by Misalignment and Legacy Mindset, Ignoring Routes to Revenue, and Struggling with Using Subscriber Data to Improve Customer Experience


Kevin Sugarman

Kevin Sugarman
Email: ksugarman@globalfluency.com

Global Operators Beset by Misalignment and Legacy Mindset, Ignoring Routes to Revenue, and Struggling with Using Subscriber Data to Improve Customer Experience

New Report and Industry Executive Study and Dialogs from the CMO Council Show Service Providers and Cable/Satellite System Operators Need to Factor in a More Customer-Centric, Insight-Led Approach

PALO ALTO, CA-July 11, 2011 - Most communications service providers are challenged to meet subscriber demand and are focused too much on traditional concerns around technology infrastructure and operational requirements while not paying enough attention to the data-driven customer experience and new routes to revenue.

While customer churn can be attributed to service capabilities and pricing structures, the customer experience is weighing heavily on the decision making process. A vast majority (83 percent) of communications service operators feel they need to get a better handle on the network resource and support challenges presented by a more diverse and demanding customer base and the proliferation of new devices and service offerings. But almost half (47 percent) think that if left unchecked and unmanaged, the issue of subscriber complexity could spiral out of control, making the delivery of service and the optimization of the complete customer experience an insurmountable challenge.

Overall, the industry gives itself poor or failing grades in its current ability to handle subscriber complexity, and sees the need to focus on simplifying the customer experience and better manage real-time customer behavioral data.

These are among the results of a comprehensive new report and study findings (http://www.cmocouncil.org/cat_details.php?fid=206) released today by the Chief Marketing Officer (CMO) Council and Openet (www.openet.com ) along with the Customer Experience Board and The Business Performance Innovation (BPI) Network to examine the extent and effects of a demanding new world of subscriber complexity and choice in today's communications services market. The report is part of a global program from the CMO Council called "Bringing Dexterity to Subscriber Complexity: Managing the Challenge of Change and Choice in Communications and Media Markets," which engages media and organization partners such as Light Reading, RCR Wireless, MobileGroove, the Mobile Marketing Association, and CTIA.

The report captures findings from a global online study conducted in April and May of 2011 of 212 senior professionals representing marketing and technology functions at global operators and communications providers. The quantitative results and analysis are complemented by more than a dozen in-depth industry executive dialogs conducted by the CMO Council with companies such as Deutsche Telekom, Telefonica O2, Vodacom, Earthlink, and many others as well as best practices insight and data points from industry analysts and thought leaders.

Among the key findings of the online study are the following:

Carriers are often times fighting significant internal barriers within their corporate walls
- 68 percent say their traditional corporate mindset is out of sync with new forms of service delivery
- Traditional concerns such as meeting consumers bandwidth needs (55 percent), support for new devices (35 percent), and pricing are identified as main drivers of complexity
- 72 percent point to poor alignment between marketing, sales, and IT
- 81 percent struggle to launch and provision new services quickly and cost effectively

Most are not paying enough attention to fundamental, data-driven, personalized experience concerns
- 72 percent lack the subscriber insight and intelligence critical to the execution of a more personalized user experience
- 75 percent need integration between disparate data sources
- A majority (52 percent) do not have good capabilities for segmented offers and promotions
- 42 percent need improvements in their CRM and subscriber management and tracking

Many are not fully optimizing new routes to revenue. While 59 percent of operators say they are considering new revenue sources from over-the-top (OTT) services
- Focus seems to be on meeting OTT bandwidth needs (25 percent) and providing flexible plans (14 percent)
- 94 percent aren't exploring partnerships such as revenue sharing with OTT providers
- 88 percent don't believe OTT providers are competing for their customers

"The substantial challenges that today's subscribers present are no surprise to operators," said Donovan Neale-May, executive direct of the CMO Council. "What is a bit of shock, however, is the fundamental lack of focus on personalization, segmentation, and data analytics and integration to cater to the specific needs of new demographics, behavior patterns, and consumption practices. Communications executives need to rethink and revamp corporate mindsets that are resistant to change and look beyond commodity concerns to drive incremental revenues through a more robust customer experience."

Rather than focusing more on highly personalized user experience issues, many operators are consumed more with traditional support and infrastructure requirements caused by a deluge of new devices and rich content that are creating massive network congestion. Respondents say increasing bandwidth demands are the biggest contributor (55 percent) to subscriber complexity, followed by support requirements for new devices (35 percent). The growth of smart phones (63 percent) and tablets (46 percent) are the two biggest trends creating the need for more granular customer management.

"We are at a pivot point in our industry. Operators are under siege from new competitors, yet their ability to seize strategic opportunities is being impeded by integration and legacy issues," said Michael Manzo, Chief Marketing Officer at Openet. "This is stifling operator innovation and talent. Operators urgently need integrated platforms to allow them to elegantly address traditional concerns, but more importantly enabling them to focus their capabilities and skills on developing new business models and service innovations."

Survey and executive dialog responses showed that carriers are particularly feeling the impact of global subscriber shifts. Saturation in developed countries is causing a change in approach to retain and maintain, while rapid adoption in emerging regions is testing the limits of support, pricing, and segmentation. Seventy percent say a slowdown in adoption rates in developed countries has increased the importance of their subscriber retention and revenue optimization, and 37 percent say the rapid adoption of mobile communications services in developing countries is causing them significant strain.

The new report is available for download on the program microsite site at www.subscribercomplexity.org. The microsite also features leadership committee member profiles, supporting facts, articles, white papers, and other resources.

About the CMO Council

The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide range of global industries. The CMO Council's 6,000 members control more than $200 billion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include over 20,000 global executives in nearly 100 countries in multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia Pacific, Middle East and Africa. The Council's strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), LoyaltyLeaders.org, Marketing Supply Chain Institute, Customer Experience Board, Market Sense-Ability Center, Digital Marketing Performance Institute, GeoBranding Center, the Forum to Advance the Mobile Experience (FAME), and the cause-directed research initiative, Pause to Support a Cause. More information on the CMO Council is available at www.cmocouncil.org.