MORRISTOWN, New Jersey—November 1, 2010—Data analytics are key to maximizing customer experience, customer retention and increasing profitability says TM Forum’s latest Insights Research report “Exploiting Analytics”. This chimes with recent claims by Bain & Company that as little as a 5% improvement in customer retention rates can yield as much as a 75% increase on the bottom line.
The report discusses why communications service providers must view improvements in customer experience as a vital and profitable business strategy, by examining the value great customer experience brings to businesses, which leads the conclusion that,
“While growth by acquisition certainly increases overall revenues, it often creates tremendous challenges for profitability. Organic growth through increased customer loyalty and retention is a more effective driver of profit, as well as a stronger predictor of future profitability.”
The report looks at how analytics have been deployed by companies in industries adjoining communications with terrific success, such as Amazon, Apple, Google and Netflix. It also looks at factors that are inhibiting service providers’ progress in following these examples as well as critical success factors, where some of the world’s biggest service providers perceive progress so far and what their short and long-term goals are.
According to the report, business analytics, both traditional and real-time are the key to:
· Better understanding customer motivation and behavior
· Suggesting attractive offers and predicting the likelihood of the offers being accepted
· Modeling and improving customer-experience related processes
· Measuring performance improvement and customer satisfaction
· Predicting the likelihood of a customer churning, ideally so preventative action can be taken
In addition, the report shows that customer analytics can be used to predict customer lifetime value (CLV) which can be used across the customer lifecycle to improve both customer experience and profitability.
According to Rob Rich begin_of_the_skype_highlightingend_of_the_skype_highlighting, managing director, TM Forum Insights and author of the report, “Given the maturity of the core services market, service providers in the report say they will increasingly focus on customer experience and especially customer retention. Because of the importance relegated to those critical success factors, most service providers surveyed also cited top management support, strong program governance and effective customer data management as the most important success factors for improving customer experience,”
“CSPs must shun the ‘one-size-fits-all’ approach of the past, as customer service is no longer an act of altruism, but instead a strategic initiative that impacts your bottom line,” added Rich.
The six section report is vital reading for organizations striving to become more customer-focused and profitable in the near future and mid-term, through the judicious application of customer experience-related analytics. It looks at all the relevant issues, strategies and priorities for understanding the value of customer experience including;
· Defining analytics and business intelligence
· Customer experience in communications – applying analytics for improved performance
· Service Providers actions and plans for addressing analytics in customer experience
· Recommendations for approaching customer experience initiatives
· TM Forum’s contribution to analytics to improve customer experience from standards to best-practices, catalyst projects, documentation, publications and research
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