Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Glenn Lurie, President and CEO at Synchronoss looks at why operators must dispense with legacy thinking to become truly ‘digital first.’
Operators embracing digital transformation are choosing to try and re-invent themselves. They have to. It’s a battle for consumers, mindshare, to maintain relevance and resist ongoing disintermediation from OTT players and much more. Now is the time for operators to be bold and go on the offensive. They need to have the courage to do things differently and move away from traditional thinking.
Nowhere is this shift in thinking more important than when it comes to the relationship that operators have with consumers. The customer journey is the first dimension of digital transformation that operators have to tackle. The “ownership” of the customer care experience, while offering additional services and going up the “customer value-exchange” stack is under attack. As we all know, expectations have changed: today’s consumer is constantly asking for more, and operators must be ready to respond, now and in the future.
The old world…
Historically, operators have built close customer relationships by placing emphasis on human contact – being accessible, responsive and flexible. They also measure themselves in terms of what customers think about them, through NPS and Willingness-To-Recommend scores (WTR) – a traditional set of measures, reflecting traditional thinking. Some operators would argue that sending its customers automated surveys over text or email are a good way to demonstrate an ongoing willingness to improve. Still more will say that ongoing investment in expensive call centre/customer care operations, company owned retail stores, and physical indirect distribution to maintain human interaction with consumers are a business necessity. The truth is that these methods are becoming quickly outdated, incredibly expensive and increasingly unnecessary as the customer does not want to do business that way anymore.
…and the new
We need look no further than examples such as Facebook, Apple, Netflix and Google (affectionately known as FANG), whose focus and use of technology to good effect is through providing frictionless digital experiences. When’s the last time you walked into a Netflix store or called a Netflix call centre about a problem with your subscription? When did you ever talk with a human being at Google? These companies go to great lengths to create experiences that empower consumers to resolve issues themselves. They wake up every day not thinking in terms of physical, or human customer interaction, but focus on a 100% digital business. Their mantra is the fewer the customer pain points, the better the service. They invest in optimizing every aspect of their customer journey and self-care environments. They think ‘digital first,’ because their customers do and expect them to as well.
So, what does ‘digital first’ mean? For the FANG community, it’s their defining philosophy. It also defines other digital leaders like Uber and Amazon. For example, Jeff Bezos thinks only about the online retail experience from when an Amazon customer receives a delivery at home. He then works backwards, attacking pain point after pain point through digital technology. For him, each instance of digital innovation is not meant to soothe pain in the customer journey – it’s meant to prevent it outright. With the acquisition of Whole Foods and the futuristic Amazon Go Store, he and the Amazon team have added focus and differentiation in the critical relationship between physical, and digital, to be well positioned for the future customer wants and needs.
This is the difference between the FANG community and today’s operator. FANG in most cases does not have the legacy systems, distribution, processes, T’s & C’s, and regulations, etc. that operators do. They started with a new way of thinking, and built the customer’s overall experience that way, rather than breaking it down to a series of single interactions. The FANG community have been better at putting themselves in the shoes of their customers and thinking critically about what they expect and how they prefer to interact. They then leverage AI, machine learning, cloud technologies and enablement platforms to meet these expectations.
Breaking legacy thinking
What’s stopping the operators from emulating this? Traditional conservatism and a fear of change – maybe – but I think it’s more than that. Certainly, their internal processes, systems and structures as well as concerns over customer impact creates inertia, making change difficult. But the largest gap is people – getting everyone to understand that massive change is needed by everyone in every organization to truly go ‘digital first’. This is hard to execute. They need to feel comfortable that delivering the best customer experience often involves no human interaction. Digital transformation is about passive customer empowerment, it’s about overcoming complexity and reducing cost.
There is no doubt that operators are trying to move away from a culture of complexity when it comes to delivering the best possible overall service experience. A siloed organisational structure has encouraged a segmented view of customer experience based on single interactions about specific services. A period of prolonged M&A has contributed to this as operators continue to integrate new assets and teams into its service offering.
The result? Operators have been unable to leverage digital channels to sell all services to all customers through a simple experience. This has slowed down time-to-market, increased complexity for both the customer and the in-store representatives and increased the cost of customer acquisition and support. Some of the more enlightened and forward-thinking operators are in the process of deploying digital platforms to innovate, compete and take on these issues/opportunities. This includes investing in online portals that give customers the power to order services from a comprehensive inventory that spans their entire offer, at a time of their choosing.
They can also then access a self-care environment to retain complete control and resolve issues themselves. They can have a single experience no matter where they start and end the process, on-line, physical or call centre. The customer benefits from the speed and ease of an interaction their way, non-human, digital-only or a combined interaction. The operator that executes this well sells more services, more quickly and can deliver and support them at a vastly reduced cost.
Imagine significantly reduced acquisition costs, reduced need for physical distribution and massive reductions in calls to care centres. While at the same time attaining a huge lift in close rates, better bundling of services while NPS, WTR and overall customer journey satisfaction scores go up, big time! I would call this the perfect storm for any operator. FANG thinking, operator execution.
Small steps, big results
According to McKinsey, the majority (70%) of operator digital transformation initiatives fail, not only due to an inability to break out of traditional silos and business practices, but also because of an inability to find specific talent to drive new initiatives. I would also say that the inability to encourage existing operators teams to change mindset and behaviors towards driving new initiatives is also a major factor.
While operator silos are gradually being broken down, the search for talent remains just as challenging. Some operators are recruiting heavily from the OTT world, others are looking to form strategic partnerships to drive new ideas and working practices. From experience, the operators that combine the two will be those that achieve the greatest competitive advantage.
These moves represent some small steps operators are taking to become ‘digital first’ and I would suggest there is not a more important priority, focus or action the operator could have. Operators can have the best network, best offers, incredible bundles, etc., but without a world class digital first journey that gives the customer the choice on how they want to do business with them, they will struggle to keep the customer engaged and have the ability to stay relevant in their eyes. Without this they have no shot to grow the customer relationship, drive trust and sell them other products and services.
Glenn Lurie serves as Chief Executive Officer and member of the Board of Directors of Synchronoss Technologies. Glenn joined the Synchronoss team in November, 2017 with nearly 30 years’ experience in the telecommunications and wireless industries. Prior to joining Synchronoss, Glenn was President and Chief Executive Officer of AT&T’s Mobility and Consumer Operations where he successfully grew the nation’s leading wireless and consumer business. During this time Glenn managed sales and distribution, customer care, operations, home entertainment and video services. Glenn and his team were also responsible for the integration of AT&T’s Direct TV and the company’s digital business.