Customer Value: From Scattered to Consistent

Customer Value Management (CVM) is one of those great marketing ideas that’s both highly strategic and a devil to implement in the real world. It’s a rare treat when we get to hear from a senior carrier expert who’s driving CVM programs at large telecoms.

Permit me to introduce Cretièn Brandsma, the former head of CVM Programs at Vodafone Group and head of CVM for Vodacom South Africa. And now he’s just taken the post of Group Director of Customer Value Management (CVM) at VimpelCom.

Despite the many failures CVM has faced in the past, the picture Cretièn paints of CVM is a very hopeful and achievable one: CVM is an actor who’s struggled for a decade to gain recognition, but whose hour on the stage has finally arrived.

Cretièn explains with great clarity why CVM programs have failed in the past, how customer experience programs can be revitalized with small-scale experimenting, and what technical and organizational moves can synchronize the efforts of the sales, call center, product development, and pricing teams.

Dan Baker: Cretièn, you’ve built your career around driving CVM programs in large telecoms. So I wonder if you could give some advice to other CVM champions on how to move the large organizational mountain that’s in front of them.

Cretièn Brandsma: Dan, my experience is that CVM can only work well when it’s a full-company program. And to get to that state requires quite a bit of evangelizing of CVM across the organization.

For instance, there’s the issue of “false acquisitions” where you are attracting customers that are actually not real customers but connections driven by the commissioning & incentives programs in your channels. Systematically analyzing your in-flow quality by channel, tariff plan, and promotion allows you to raise any “bad sales behavior” with your sales peers in the organization — stopping some of the root causes of churn right at the front door.

Another example of a technique that I’ve seen work well is to interact directly with every single customer who is leaving and say, “Sorry to see you leave, Ms. Customer. This is not a sales call, by the way. We are not trying to save you because we already tried that. What I would like to understand is: why you are leaving us? Is it the network? Is it the service? And where are you going? What attracted you to go to our competitor?”

In this way you systematically gather insights and feed that back into the rest of the organization. So I think you can begin to see that CVM is much bigger than campaign management alone.

That brings up the issue of incentives in the channel. How do you make sure salespeople are aligned to deliver the long term value you want?

Managing sales incentives is a key problem to be sure. In the past, mobile telecom was a growing industry so customer acquisition was the focus. But with mobile phone penetration rates well over 100% in many countries, the emphasis must now shift in the direction of retention.

In the past, of course, we would heavily incentivize acquisition. And if you were on a two-year contract, we wouldn’t talk to them again till month 21 when we would love them again. We gave the customer a nice device and said, “You should stay with us.”

This strategy has got to change. The days of investing only at the two moments of truth (acquisition and retention) are over. The investment should be spread out across the entire life cycle. That’s the way to optimize the value.

You also need to get all the different channels pulling in the same direction. One way to do that is to have shared volume and value KPIs with peers in the call center, sales, product development, pricing and the CVM team. In this way, each team has a joint interest in what each other is doing.

How much real progress is actually being made in “customer experience”? And what do you feel are the hallmarks of a successful program?

Well, this is an interesting one, because telecoms have jumped on the customer experience train quite a few times. And to be honest, we’ve often failed miserably.

One of the issues is when the CEO or other influential person starts driving the execution and tactics of customer experience from the top down. And before you know it, a project management office is pushing a charter of 24 things that people across the whole myriad of departments are supposed to do.

Now while it’s true that the departments of call center, sales, and retail stores all have to deliver on the customer experience, you can’t expect them to drive 24 initiatives when they still have their prime management targets to meet.

The tactics really need to bubble up, not down the organization. You need to start really small. For example, if it’s customer experience in a store, you start it there and see how the strategy works with two or three stores. Only when you get it working really well there do you start rolling it out on a larger scale.

So it requires a combination of top down senior management direction plus phased execution where you are building up from proven small-scale successes.

Coordination between the CVM and technology teams is important, so what’s the best way to achieve that?

I think the best path is to “co-create” with the technology team. For instance, the moment the CVM team comes up with the road map and starts scoping a project, you need to immediately negotiate with technology at day minus one.

There are all sorts of trade-offs to discuss between complexity to deliver, cost to deliver, and strategic priority, namely the requirements that will give us the biggest payback. And in those sessions I’ll say, “I want this, this, and this.” And what I hear back is “This will take 6 months, that will take 9 months, but if you do it this way, it will only take us 3 months.” So at the start you normalize requirements between business and technology — and we work together.

Another exciting development is that technology has come into marketing and now it’s finally mature enough to support multi-channel marketing dialogues. With a tool like Pegasystems, you can create decisioning strategies and launch them live with no technical intervention or system design required. It’s all done through configuration.

Now a new strategy might explode the volumes going through certain channels, so there can still be a technical impact. But there’s no impact from how you redesign the system.

Are there other important areas where technology can impact CVM?

Well, if you take a look at where CVM programs have struggled, I would say two of the biggest issues are maintaining consistency and getting better performance from campaigns.

I strongly believe you need to communicate consistently with customers across all inbound and outbound channels. It’s something our industry has been talking about for 12 years, but the good news is we have much better technology stacks to enable that today.

The best approach is to have one marketing decision environment on the back end that serves all channels. It might trigger an outbound message. If the customer contacted the call center, the Next Best Action (NBA) recommends a service treatment — doesn’t always have to be sales — and on the back of that you might reinforce your message by sending an SMS or by sending them a customized email.

Now when it comes to outbound marketing, I think telecoms have struggled as an industry to deliver good performance. But we can fix that issue by using outbound marketing to drive customers to an inbound channel where you provide personalized offers in real-time.

For instance, at Vodacom in South Africa, we implemented one channel called “Just For You!” — and that’s on the mobile device and the customer types *123#, and it’s a very well-known channel because that’s where everybody goes to see their current balance and bundles.

Well, at Vodacom, the “Just For You!” platform is driven by Pegasystems. On that platform alone they make more than a million decisions a day. And if you look at the conversions we get through that channel, it’s actually 4 to 5 times higher than traditional outbound campaigns.

So now, instead of hitting the customer with a shotgun marketing campaign, they can tell customers to visit “Just For You!”, and check out if there’s a recharge offer for them. And there’s always a relevant offer for the customer there.

Cretièn, thanks for these wonderful insights. Now I recognize that most carriers are struggling to get CVM programs up and running, but once the basics are achieved, what’s the future outlook for CVM? What will we see once the art has advanced a bit?

Well, I think the next stage of CVM is the ability to do things in real-time. You cannot be truly contextual until you reach that stage. At the moment I think CVM programs are in the T minus one phase — information we acquired yesterday.

Now what we have still allows you to be partly contextual. For example, if you are doing a simple NBA in a call center, you can input a call reason — such as Billing Inquiry — and produce a drill down list for the agent that tells him to push certain actions and to not mention certain things.

But if the problem is dropped calls, we can’t address that yet. If I noticed you had 3 dropped calls and this is now your fourth dropped call, I might want to put you on a call list and do a health check with you. I would call, apologize, and make things right.

So far, a lot of organizations do highly complicated churn propensity modeling which in a lot of cases is very time-consuming, costly and will predict customer behavior that is going to happen in any case, so once you take action based on the model it’s already too late.

Another situation is when the customer has used 80% to 90% of her data bundle and we can say, “I noticed you are browsing a lot and if you continue at the current rate, you will be hit with a high out-of-bundle rate. We can offer you a larger bundle”. And then you can provision a larger volume bundle for them in real-time using a private priced offer that is affordable for each customer.

So I think we’ve recently made great strides in CVM.

The focus of NBA should be on fixing the basics because customers are only as loyal as the core experience that you give them. And recognize, too, that while technology is a great aid, it’s never, ever going to be the Holy Grail.

This article was originally published by Black Swan and has been reproduced with their permission.

Dan Baker
Dan Baker
Dan is a founder of the Technology Research Institute (TRI), which has published studies about the telecom software market since 1994.

As a journalist, Dan wrote for B/OSS magazine and recorded webinars with VanillaPlus before launching his own publication, Black Swan Telecom Journal.