Thursday, October 14, 2010

CRM for MVNOs: Part II

Since MVNOs pride themselves on their superlative understanding of their customer segment compared to traditional operators, Customer Relationship Management becomes a key focus area for them. CRM helps MVNOs manage entire lifecycle of Customers by supporting the following activities.

For an understanding of the business model of MVNOs, importance of the parent brand and customer segments and the changing MVNO Operator relationship, please go through my previous post here.

• Campaigns and Promotions: Since MVNOs normally target the same or similar segments that are targeted by their parent brand; a good point to start for them is to target the customer base from one of their existing lines of business. CRM provides the platform to extract the list, run the campaign, track customer responses and take suitable actions based on the responses.
• Customer Acquisition: Customer acquisition in a saturated telecommunications market is tough, costly and a complex process with multiple points of failure. No provider would want to create a negative impression at the very beginning of the Customer’s Lifecycle. CRM provides smooth on boarding of customers though automated Order Management processes, managing and updating inventories, coordinating with courier/shipping companies for delivery and close looping through Agent or IVR assisted activation and welcome call.
• Complete View of Customer: MVNOs try that much more to create a differentiator by bringing in information from multiple systems and presenting relevant information in a manner that is understandable easily to a BPO Agent or to a Customer availing Self Care.
• Customer Service Management: MVNOs strive to provide 100% resolutions to Customer requests, complaints and queries on the call without passing the buck to a back office team. Apart from higher level of customer satisfaction due to on call resolutions, this creates a suitable opportunity for up sell and cross sell since customers are more willing to listen once their issues are taken care of.
• Analytics & Real Time Decisions: Real time analytics and decisions are triggered by Customer actions. These events re-calculate churn scores of customers on the fly and based on historical patterns of customers with similar profiles, can throw offers at the customer. Customers are prompted for up sell or cross sell or may be offered incentives and customized solutions if identified as churn prone.

CRM for MVNOs: The Way Ahead
• Social CRM: MVNOs are, as mentioned earlier, customer driven companies. They need to be ahead of anyone else in terms of understanding their target segments and need to tune in to the changing tastes of customers through various social networking mediums and communities. The ability to identify micro segments within the broad segment, their unmet needs and specific tastes is what will keep them ahead of traditional operators.
• Cloud based Applications: MVNOs should look at cloud based solutions for their BSS stack. Cloud based BSS solutions are based on a subscription model and reduce setup costs by moving costs to an OPEX model. Cloud based models were not considered suitable for telecom operations earlier because of high transaction volumes, but have now been proven to be scalable and can handle MVNO transaction traffic.
• Integrate with other LOBs: While MVNO’s operate as separate companies within the parent’s brand umbrella and have separate applications and systems, an integrated CRM containing information of Customers across other Line of Business can be done to provide a complete perspective of the Customer’s lifestyle and behavior.

Sunday, October 3, 2010

CRM for MVNOs: Part I

A Mobile Virtual Network Operator or an MVNO is a common term in the telecommunications industry today. MVNOs ride on the Network provided by a traditional telecommunications service provider, i.e. they buy or source minutes from the service providers, package them in a market savvy way and sell to consumers. Some key characteristics that differentiate the MVNO from traditional operators are as follows:
• MVNOs primary Line of Business is not telecommunications. They have an established brand presence in other industries and markets
• Their target market segments are aligned to the overall marketing strategy of their brand. They will not dilute the brand by targeting completely new segments.
• They are highly conscious and cautious about their image and hence have higher quality and performance requirements from their IT and Network partners.
• They pride themselves on their understanding of their customers, they want to be nimble so that they can change quickly with the changing tastes of their target customers
• They are highly oriented towards VAS and other innovative ways to bundle and price products and services, their revenue sharing agreements with VAS partners reflects the importance of the VAS partner to them.

Companies have transitioned overtime from being product oriented to being customer oriented. The days when Ford started mass production of automobiles with Model T, an assembly line production of cars of a single color that opened travel to the common middle-class American have been replaced with an era of mass customization. As search costs have reduced, customers have become more powerful and demanding. Companies have been forced to incorporate customer feedback and behavior as a key component of product and service design.
MVNOs are companies who consider themselves as champions at customer orientation. They believe they are in the telecommunications market to fill a gap and satisfy an unmet need of their target segment. While traditional telecom operators are tied to their products (mainly voice based) and want to sell to as large a customer base as possible, MVNOs consider themselves as partners to their customers trying to fulfill their needs.

MVNO Operator Relationship
On-boarding of MVNOs was a costly affair till a few years back. MVNOs wanted to have control over most of the BSS systems, which meant significant investments around CRM, Rating, Billing, VAS, Self Care, Portals etc. While MVNOs wanted to limit their dependencies on operators, operators themselves were wary of losing Customer base to MVNOs. However, with the MVNO concept gaining ground and providing a steady and new revenue stream for operators, traditional operators today are encouraging MVNOs and preferring to play a wholesale and B2B role in some cases. Lately, operators have started supporting most of the BSS platforms for MVNOs to the extent that some operators even own the portals of MVNOs. Outsourcing BSS systems to operators (in most cases to the operators IT vendor) have resulted in win-win combination for both the operator and the MVNO partner. For the MVNO, the CapEx on infrastructure has been replaced by OpEx, which has reduced their entry barriers. At the same time, the Operator has been able to rent out the existing IT infrastructure they had in place, thereby creating an additional revenue source for them. Thus, the Operator MVNO relationship, which started out as a vertical co-specialization of activities, has moved to the next level of consolidation, with rationalization of resources taking place between the operator and MVNO.

In the second part of this post, I will detail the role CRM plays in MVNOs and share thoughts on how MVNOs can use CRM more effectively.