D'oh! It's the Execution!

Optimizing your customers' experiences

Communications service providers will likely pursue a variety of strategies as they face the challenges posed by convergence, service bundling and new competitive scenarios. Any newly chosen strategy will present difficult execution challenges. While certain difficulties also existed in the past, the scramble for share in immature markets tended to mask operational inefficiencies and organizational shortcomings. In today’s dynamically competitive environment, the potential of organizational capabilities to earn profits for the firm through sustainable competitive advantage depends upon their capacity for not only creating but also sustaining that advantage.

A combination of supply and demand factors determines competitive advantage. On the demand side, the industry is spending billions on technology, content and human capital to create productive capacities that correspond to market need. Witness the investments of telcos in the shift from providers of voice and data circuits to IP-based multimedia content distributors. On the supply side, the firm must have the capabilities not only to serve that market need but to serve it more efficiently or effectively than other firms. The upshot is that although demand-side considerations get you into the game, it is superior execution (the supply side) that generates competitive advantages and protects them against imitation.

A key observation from many years of helping organizations optimize execution is that the critical source of competitive advantage is integrating knowledge well rather than simply having the knowledge itself. Specialized knowledge, a 360-degree view of the customer, for example, cannot provide a basis for sustainable advantage on its own. First, the infrastructure and tools needed to create customer knowledge are readily available in the market. Second, specialized knowledge of how to utilize these assets often resides in individual employees’ heads, and they can leave the company, taking their knowledge with them.

Of course, you can easily leverage knowledge that is proprietary to the firm (patents, copyrights, trade secrets). However, experience teaches us that the value of most proprietary knowledge depreciates quickly through obsolescence and imitation. Thus, the key to sustainable advantage is not proprietary knowledge itself but the capability to generate, access and apply specialized knowledge to the execution of business activities that drive specific customer experiences.

Customer experience optimization

For communications firms, you ultimately can demonstrate competitive advantage through a superior ability to acquire, retain and increase revenue streams while minimizing the cost to deliver products and services. This optimization of business activities across the customer life cycle can be characterized as a customer experience optimization process. Advantage can be gained or lost at any point in the customer life cycle, so every touch point provides an opportunity to increase return via superior operational execution.

In the SAS approach, we take a comprehensive view to ensure that each contact point is evaluated as an opportunity to profitably meet customer needs and pains. Effective business optimization happens at every stage of the customer life cycle: marketing and sales, activation, field service delivery, network performance, up-sell/cross-sell, retention, collections and win-back. As such, we incorporate capabilities to optimize execution at each and every one of these places where the customer experience can be delivered profitably – or not.

With our partners, SAS integrates three key disciplines in our customer experience optimization program. (1) Intelligence creation and management ensures that forecasting, operations analysis, profitability analysis, predictive modeling and customer segmentation are efficient, flexible and powerful enough to result in timely and effective strategies for execution that meet customer needs and pains in the service of specific financial objectives. (2) Intelligent program design and (3) touch-point optimization ensure that these dynamic strategies are effectively implemented through designed actions via multiple, integrated channels.

Incorporated into our three-disciplined customer experience optimization approach is a multifaceted solution that links customer contact channels with advanced analytics, data warehouses, OSS systems, network elements and other necessary components. Using these capabilities, customer and financial insights translate into satisfied and profitable customers.

SAS enables the creation of above-average returns from customer management investments by creating a platform for learning from relentless experimenting – a core capability equal in importance to, say, financial analysis or strategic planning.

The customer experience optimization platform can be envisioned as a virtual operation within the larger organization. This platform unites resources, routines and structures in new ways that create new value, without reshuffling organizational charts or overhauling IT systems. So this means that SAS’ customer experience optimization program can be applied to specific customer management issues by helping you start small, prove its success in increments and grow organically.

The customer experience framework components can be applied at a variety of levels depending on time and resource parameters. Program pilots allow rapid implementation of customer experience optimization initiatives using a low-cost, high-value approach that demonstrates ROI quickly. Starting off with the right architecture and a “learn-by-doing” process, program components can be scaled over time as demonstrated financial success funds the implementation of the experience optimization road map.

Framework components

Covering the entire customer experience value chain, SAS’ framework encompasses:

1. Customer profitability: Generate an accurate picture of profitability by virtually any dimension, such as customer, geography, product, channel and tariff.

2. Analytical data mart: Create a dynamic repository for storing, mining and reporting of customer behavior and transactional history in support of multiple analytical processes.

3. Predictive analytics: Use data mining results to predict future behaviors and dynamically determine segmentation criteria for a specific program or treatment. 
4. Forecasting: Forecast key customer and financial metrics within hierarchical dimensions that enable program focus on specific financial objectives for dynamically defined customer segments.

5. Segmentation and root cause analysis: Create a conceptual understanding of needs/pains that drive financial performance in specific customer segments and suggest customer management actions to enhance ROI.

6. Program design, optimization and ROI simulation: Translate conceptual understanding into an optimal treatment strategy (e.g., product, rate plan or problem resolution) for individual customers based on their comprehensive behavioral profile and empower agents to act upon that intelligence. This results in an ROI forecast for specific treatment actions for specific customer segments.

7. Business process optimization: Design and execute the optimal customer experience enhancement programs based on functionally specific financial criteria.

8. Touch-point optimization: Facilitate at the transactional level the establishment of marketing, sales, service and operational procedures optimized for specific customer experience impacts and related financial objectives.

9. Performance measurement: Measure program actions related to specific experience delivery assets and create a data store to generate timely performance reports and scorecards.

10. Rapid valuation: Enables verifiable ROI determination, rapid program assessment and feedback of learning into the customer management process.

More than interesting analysis, SAS customer experience optimization offerings enable you to optimize and evaluate the ROI of specific customer management actions. You can implement an offering for an individual touch point or across operational functions, and you can combine offerings for a more robust and extensible solution. Furthermore, you can implement pilot programs to prove hypotheses, identify measurable improvements and produce quick ROI that build a foundation for future initiatives. It is indeed about the execution, and SAS is the leader in providing the insight to execute more efficiently and effectively.