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Digital Transformation: Customer Centricity Crucial for CSPs

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Report Summary:

Digital native brands are shaping customer expectations

Consumers expect more contextual, personal interaction from brands, when they want it and where they want it, as experiences today are shaped by leading digital native brands like Facebook, Google, Uber, Amazon, WeChat and other digital giants. Failure to become more customer centric and offer improved digital engagement leads to risks for Communications Service Providers (CSPs) of losing subscribers to more customer in-tune competitors, missing opportunities for revenue growth through new digital service offerings and poor customer satisfaction ratings leading to weaker market positioning and brand perception.

The digital transition involves a service focus shift from voice to data and video, cloud services, big data analytics and support for enterprises and Internet of Things (IoT) use of mobile connectivity to transform businesses. Most importantly, however, digital transformation has a customer centric focus, supporting the evolving digital lives of customers and providing digital interactions with the operator and its services.

Typically, CSPs in developed markets spend 10-15% of service revenue on customer acquisition and 2-3% of revenue on customer service.

The benefits that a more agile and customer-centric experience can deliver, can not only drive up sales conversion rates but can also reduce churn and reduce call load at customer service centers. These cost structures provide significant room for efficiency gains.

Building on industry dialogue (e.g. at the TM Forum), Strategy Analytics determined 6 key interdependent dimensions of CSP digital transformation and mapped them to depict the relationships among them.
As seen in the interrelated dimensions, digitalizing customer engagement requires digital transition in the network to enable real-time, agile service delivery and exposure of service details to the end customer. We also then explore adding digital to four stages of the customer journey and provide recommendations for CSPs.

Table of Contents

1. Executive Summary 
2. Digital Transformation: CSPs Need Customer Centricity 
    2.1 New Digital Experiences Users View as Norm Have Raised the Bar 
    2.2 Business Drivers: Landscape Shifts Driving CSP Digital Transformation 
         2.2.1 CSPs Face Many Changes in Their Landscape 
         2.2.2 Digital Transformation is New Approach Needed for New Landscape 
         2.2.3 CSPs Should Learn from OTTs but Do Not Need to Match their Webscale to                  Win 
         2.2.4 Agility, Iteration, Feedback: Try, Tweak, Try Again 
    2.3 What does Customer Centricity at a CSP Look Like 
         2.3.1 CSP Opportunity to Become Customer Centric Digital Lifestyle Providers 
         2.3.2 Customers Want More Digital Engagement from CSPs 
         2.3.3 Key CSP Opportunity: Ease More Customers into Digital Engagement 
3. Examples of Customer Centric Digital Transformation 
    3.1 Deutsche Telekom (DT) 
    3.2 Telefónica 
    3.3 Jawwy, a Digital Mobile Sub-brand of Saudi Telecom Company (STC) 
    3.4 Vodafone ‘Smart Pricing’ 
4. Dimensions of Digital Transformation at CSPs: The Big Picture 
    4.1 Dimensions Where CSP Digital Transformation Needs to Occur 
         4.1.1 TM Forum’s Digital Maturity Model 
         4.1.2 Ericsson’s Digital Maturity Assessment 
    4.2 Interdependent Layers of CSP Digital Transformation 
5. Service Experience Optimization: Adding Digital to the Customer Journey 
    5.1 Digital Transformation at the Front and the Back 
    5.2 A Deeper Dive into the Customer Dimension: Adding Digital to the Journey 
    5.3 How Digital Enhances the Customer Journey and Customer Engagement 
         5.3.1 Pre-customer: Discover, Shop & Buy 
         5.3.2 New customer: Get Started 
         5.3.3 Being a Customer: Use & Manage Service & Pay 
         5.3.4 Staying a Customer: Loyalty & Retention 
6. Conclusions & Recommendations 

7. How Can We Help You?
        7.1 CSP Digital Transformation: Have you thought about? 


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