Opportunity for Telcos – Driving mobile engagement for Enterprises
Wednesday November 04,2015
Sharad Sharma Product Manager
Customer engagement matters
A Gallup study shows that a customer who is fully engaged represents an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth compared with the average customer. The enterprises certifying these trends are retail banking, consumer electronics, restaurant, hospitality and insurance.
The study establishes that enterprises receive measurable benefits of driving positive customer engagement. For retail banking, fully engaged customers bring in 37% more annual revenues to their primary bank than the actively disengaged ones. They hold more products with the bank and have higher deposit balanced. For consumer electronics, the fully engaged shoppers visit their preferred retailer 44% more number of times than the actively disengaged ones. And when they do visit, they spend higher on average per shopping trip.
It would hardly be a surprise if most other industries correlate strongly with these trends. Customer engagement, when done right, has been proved to boost revenues and profitability for enterprises. Beyond fiscal gains, engaged customers are true brand ambassadors for a company.
These observations establish the merit in treating high quality customer engagement as a key customer requirement that needs to be integrated into the product and service delivery, right from day one, rather than just a positive differentiator.
Mobile as a channel for customer engagement
Mobile has fundamentally changed how customers connect, interact and transact with enterprises. Nothing beats mobile in terms of ubiquity as a channel that can be used to deliver a seamless engagement experience to the customers through the entire transaction lifecycle, starting even before a purchase is made, through the fulfillment process and up to the after-sales service. Through channels such as SMS, push notifications, IVR and missed call, enterprises can build and reach their target audience for promotions, coupons, product announcements and customer care.
Enterprise is the new VAS
Traditional VAS revenues globally have been on a slower growth path, if not on a decline. Accordingly to the independent global analyst firm, Ovum, revenues from mobile VAS are forecast to see a seven per cent decline in CAGR in Europe over the five year period 2013-2018. The firm also expects the VAS revenues to grow at a slower pace during this period globally.
Enterprises globally are integrating mobile as a channel in their applications – Sales, Service and Maintenance being the key areas.
According to another forecast from Ovum, telecoms service providers will grow their revenues from global services to enterprise customers to more than US$297bn by 2020. The biggest contribution will come from new strategic ICT services revenues at nearly US$173bn, which will increase at a CAGR of 9.9% over the period 2015–20.
These observations underline the opportunity for the telco industry, to replenish the vanishing revenues from traditional sources like VAS, with revenues from becoming the communication partners of the enterprises.
Emerging markets leading the way
Emerging markets are highly mobile centric, may be even mobile-only because many consumers have leapfrogged PCs. In fact, more people have mobile phones than bank accounts. As per an interaction that business standard had with some leading Indian Telcos, mid 2014, enterprises as a business segment for Indian Telcos was estimated to be worth around USD 7 billon, and has been estimated to grow at 10 per cent annually over the next five years.
It is no surprise that engagement on mobile has seen some interesting innovations in these markets. For instance, missed calls are used for lead generation where a prospect calls a published number which is disconnected automatically and used as a trigger for a call back from a sales agent. During the Indian general election in 2014, outbound calls and SMS were used extensively by various political parties and candidates to connect and engage with the voters.
Even Governments are embracing digital channels to connect with citizens. For instance, Indian Government has launched a flagship program called ‘Digital India’. The program envisions connecting the billion plus population on the digital platform for objectives such as e-Governance and grievance handling, opening up the mobile channel for both mass broadcasts as well as interactive dialogues.
Telcos as the trusted partner for Enterprises
Many Telcos already serve enterprises for their communication needs and have earned their reputation for being a trusted partner for providing carrier grade solutions. Telcos have a tremendous upsell opportunity to position themselves as the partner of choice, for mobile customer engagement against other niche vendors.
The increasing need for customer engagement underline the opportunity for Telcos to create new and sustainable streams of revenue through enterprise messaging. With the network expertise and existing enterprise relationships, Telcos are well poised to capture this market.Share this