As one of the most digitally connected regions, Asia has several hundred million users of social messaging apps, such as Whatsapp, Line and Facebook Chat, which are draining revenue from traditional service providers. In fact, according to a study by independent analysis firm Ovum, service providers lost an estimated US$13.9 billion in SMS revenue due to social messaging apps in 2011 and this is only set to grow in the coming years. However, the challenge faced by service providers is not simply a matter of competing for revenue with these new over-the-top players; it is a dual-pronged challenge of managing customer expectation to reduce churn and increase profitability.
There has been widespread discussion, particularly in recent years, about the importance of excellence in customer experience management (CEM). While the communications industry has always heeded the importance of the customer, robust CEM is quickly becoming vital for service providers around the globe as they face the challenges of the ever-changing digital world.
Indeed, in order to survive today, incumbent communication service providers must embrace a new operating model that reflects their commitment to their customers. This includes diversifying their service offerings to include digital services as they compete to remain relevant.
For example, SingTel, Singapore's largest telecommunications service provider, is one such company that is setting the trend with its restructuring and acquisitions of 3D mobile ad firm AdJitsu, mobile advertising technology company Amobee, and a Singapore-based food portal HungryGoWhere. These acquisitions underscore SingTel's commitment to understanding how consumers are moving into the digital world and keeping up with customer demand and needs.
Yet, investments in digital services cannot come at the expense of weakened customer experience. As service providers race towards the new digital economy, service providers also need to understand that customer satisfaction ranks as a top priority in their corporate agenda.
In fact, customer retention, more than anything, should be the main driver of their revenue and profitability. As we all know, one complaint from an unsatisfied customer can easily go viral via social media outlets. So service providers face the double-edged challenge of having to juggle a growing, astute user base, while ensuring that they are equipped to handle the extensive demands of customers at the expense of their profitability.
Customer Experience Beyond the Baseline
Today, the fundamental competencies of a successful service provider include not only excellence in managing customer experience, but the ability to offer secure, highly available and reliable services across complex multi-party value chains, while actively pursuing and facilitating partnerships across these same value-chains to rapidly bring services to the market. In addition, as a prerequisite for success, service providers must also have a deep knowledge of customer behaviour through data analytics.
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