Customer value management in telcos: Future-proof tactics that work
Successful customer value management depends on many factors, but ultimately, it comes down to making the most of the real-time data to create immediate value for customers, which telcos can achieve by optimizing the use of analytics and insight-driven personalization to secure competitive advantage and maximize revenue growth.
What is customer value management (CVM)?
Think of it as a game plan to get the most out of your relationships with customers, from day one to—forever, really. It’s all about figuring out what customers want, giving them superior products or services, and making sure they stick around.
At the end of the day, CVM is all about making customers happy and loyal, and getting good returns for the business.
CVM definition and meaning
CVM is a strategic approach brands use to maximize the value they provide customers throughout their lifecycle. It includes different tools and tactics focused on understanding, measuring, and improving the value customers get from products or services.
Essentially, CVM aims to ensure that customers consistently perceive (and receive!) value from their interactions with a business. This boosts customer loyalty and increases customer lifetime value. It’s not just about meeting their immediate needs, but also tuning into their changing preferences and expectations.
Here are the key aspects and principles of customer value management we’ll cover in more detail throughout this blog:
In a nutshell, organizations can build strong, lasting relationships with their customer base by delivering value at every touchpoint across the customer journey.
Alternative names for CVM
Customer value management is often referred to by alternative expressions or related terms, which can be used interchangeably or adapted to fit specific contexts or business goals. The choice of terminology often depends on the organization’s focus and the way it communicates with its stakeholders.
That’s why customer value management is sometimes called customer value improvement or optimization, while some businesses choose to put greater focus on the loyalty aspect (i.e. customer loyalty management).
Why is customer value management (CVM) important?
In today’s fast-paced business world, offering top-notch customer service is a must to build and maintain your competitive advantage. This is particularly true for telecom operators, where customer expectations have hit an all-time high.
Still, more than half of customer turnover can be traced back to less-than-stellar customer service. This highlights how quickly people explore other options if their needs aren’t met. In fact, 73% of them are ready to switch operators after just one not-so-great customer experience.
Here are the most frequent types of friction we’re talking about:
People will stay loyal if they feel they’re genuinely valued, and in the telecom industry, this translates to top-notch service quality, personalized experiences, convenience, and overall satisfaction. Easier said than done.
Taking a more well-rounded approach to crafting customer experience can work wonders. Think of it as a toolkit that helps you truly connect with your customers, understand their needs, create personalized journeys, and design unforgettable experiences that foster long-term loyalty.
This is the road to implement customer value management throughout the entire customer journey. Scroll down to explore how a telecommunications company can enhance customer satisfaction, boost loyalty, and maximize customer lifetime value through systematic value management.
Get in-depth insights on the future of telco customer value management and learn how customer experience done right can work wonders for your engagement strategies and profitability.
What are the key stages of customer value management?
Customer value management can be broken down into three key stages: acquisition, development, and retention.
Comes down to attracting those customers who will bring (but also get) the most value, meaning, they are likely to do repeat business and stay loyal. Here’s where you’re figuring out what your customers truly want but also fine-tuning your business direction. As you analyze your customer base more closely, you can discover some hidden gems in terms of patterns and trends that genuinely impact value.
Is all about working towards maximizing customer lifetime value. It’s about pinpointing the best offers for specific customers. These offers are then quantified and transformed into crystal-clear use cases, ensuring they resonate with customer feedback. This stage is an ongoing process as each individual customer’s needs and expectations evolve over time.
Relies heavily on the accurate analysis of the customer lifetime value, knowing exactly which customers bring value and why. That way, you can evaluate the actual value against anticipated ROI and even detect areas where you can increase that value. It’s also a sort of checkpoint to ensure that the value provided aligns with customer expectations.
It’s worth noting that co-creating value is an evolving landscape, and businesses are recognizing the merit of partnering with their customers to craft their offerings. By co-creating with customers from the outset and genuinely listening to their feedback, you gain unique insights into their motivations and values, paving the way to effectively address their needs.
The customer value management framework
A structured, step-by-step approach to customer value management allows you to form a comprehensive customer value management framework, which in turn serves as a basis for your CVM strategy.
A framework helps businesses understand, deliver, and measure the value perceived by customers, which can increase retention, loyalty, and profitability. While specific steps and components may vary by industry or source, the CVM framework typically includes the following core elements mapped out across the key stages outlined above:
- Customer segmentation: Grouping customers based on behavior, demographics, and preferences.
- Value proposition development: Based on customer needs analysis, crafting unique and enticing offerings for each segment.
- Customer journey mapping: Zeroing in on every touchpoint, considering the entire experience and all interactions with customers.
- Personalization: Tailoring products or services and communication to individual customer preferences and needs.
- Meaningful engagement: Customizing interactions and marketing strategy so that it resonates with different customer segments, and fosters relationship building and loyalty.
- Churn prediction and prevention: Identifying customers at risk of leaving and implementing retention tactics.
- Value-based pricing: Fine-tuning the prices based on the perceived value to the customer, and not the actual cost of the product or service.
- Performance analysis: Measuring the effectiveness of strategies through metrics like customer satisfaction (CSAT), net promoter score (NPS), or customer lifetime value (CLV).
- Continuous improvement: Regularly refining products, services, and strategies based on customer feedback, changing needs, and market conditions.
The goal of the CVM framework is not just to acquire customers but to build long-term relationships, ensuring customers see value in what you offer, which ultimately drives growth and helps you reach your business goals.
Building a customer value management strategy in telco
Building upon the customer value management framework, crafting a CVM strategy becomes a straightforward process. Let’s see how it helps optimize customer interactions, enhance satisfaction, and maximize revenue in the telecom industry.
When it comes to segmentation, customers are grouped based on usage patterns, preferences, and behaviors, which is a starting point for the value proposition development, i.e. crafting attractive enough tariffs, bundles, and service offerings for specific customer segments. Furthermore, the pricing models ideally reflect the value customers get from your services, taking into account factors like data speed, coverage, and customer support.
Once you know who you’re talking to, what you’re offering, and how you’re communicating, you can map out the journey, detailing every touchpoint, from purchasing a plan to customer service interactions, cross-selling, upselling, etc.
Thanks to data-driven insights, you can personalize the services, offers, and your interaction with customers, regardless of the stage of the journey they’re in. If you provide a friction-free conversational experience across all touchpoints (in-store, online, or the mobile app) and on channels your customers already use and trust, you are more likely to keep them engaged and loyal.
But the strategy doesn’t end once a product or service is in the target market. The key is to measure continuously, in some form or another, gauging the value being provided. By assessing the impact of CVM initiatives on customer satisfaction, revenue, and market share, you can predict churn and deploy retention strategies (like loyalty programs and special offers), or adjust your overall strategy to keep up with the evolving trends.
Customer value management software
Having the right tech at your disposal makes the whole CVM process easier. It’s even more convenient when all these tools are housed on a single platform. This ensures seamless integration of omnichannel capabilities, authentication tools, chatbot building platform, customer engagement, and contact center solutions—all anchored by an integrated customer data platform, AI-powered and easy-to-use over an intuitive web interface.
Here’s how these solutions power your telco CVM:
When it comes to segmentation, a customer data platform not only gives you a 360° view of your customers and their journeys with everything unified in a single place, but you leverage that same data to get actionable insights and build comprehensive customer profiles, where you have their needs clearly outlined.
With such a customer-centric approach, you are equipped to craft the most attractive value proposition structure, which won’t go unnoticed. You’ll be able to optimize and retain your current customer base (rather than acquire new users), building a successful ecosystem across your adjacent products, and creating a so-called “flywheel effect”—with self-reinforcing cycles. That way, you boost engagement, attract more partners, and grow new revenue streams.
Future-forward telcos who adopt new technologies are in a better position to achieve market differentiation. They can capitalize on data from customer interactions, offering big data services, insights, and consultancy to corporate clients. This data assists various sectors, from aiding retail in analyzing customer interactions to assisting government traffic control.
Many telcos are expanding their portfolios with digital services to boost revenue, such as creating payment platform ecosystems for third-party apps and establishing eCommerce platforms in collaboration with retailers. As the connectivity market wanes, telcos diversify their core offerings to enhance profitability and solidify their market position.
Business-to-customer interactions today are more about the experiences than they are about product service superiority. That’s a given (or at least it should be). All your communication needs to be hyper-personalized, behavior-driven, and conversational.
To achieve that, you need a holistic conversational experience solution to help you orchestrate these personalized journeys, analyze behavioral data, and automate omnichannel support.
Omnichannel has been around for a while. If you’re looking to be where your customers are, you’re better off being channel-agnostic. And rather than offering a specific set of channels, offer all the channels, because, at the end of the day, customers dictate where and when you’ll interact. In fact, 70% of them want quick assistance on the channel of their choice.
Call centers are still an important aspect of the telco customer support ecosystem, but co-exist with digital channels people use to interact with friends and family.
Our cloud contact center solution allows you to seamlessly connect digital channels and provide the same level of service no matter how customers get in touch. That’s the basis of the excellent customer experience people expect.
For customers, the ideal experience is all about getting the right message at the right time, and on their favorite channel. To make that happen, telcos should evolve from traditional customer journeys to more digital, self-service paths, ensuring optimal CX.
Empowering people with a self-service model means they can utilize the benefits and get the right information at their own convenience. If you’re looking to master the digital journey, you shouldn’t just THINK digital; you need to BE digital.
That’s how you stay top of mind with customers and make them feel truly valued. When you do your due diligence, you know exactly who is on the other side. By understanding your customers, you’ll be able to boost marketing efficiency across different touchpoints of their journey.
Such a data-driven setup also allows you to increase retention due to the exceptional customer service you can provide. Ultimately, it all leads to you gaining a competitive edge, resulting in higher engagement and more conversions.
Telcos that prioritize customer-centric innovation build trust and make customers feel valued and appreciated. By investing in the right technologies to measure customer value, telcos can boost revenues about 2.5 times faster.
Examples of customer value management in telcos
We’ve highlighted the importance of using technology and data-driven insights in CVM. For telcos today, segmentation is a powerful marketing strategy, transforming raw data into truly personalized value.
Segmenting customers and leads can be tedious and time-consuming; a customer data platform (CDP) streamlines this process by consolidating company data from various sources, empowering marketers to utilize it effectively.
Using a CDP enables precise customer segmentation, tracks their journey, and tailors offers based on their preferences, leading to revenue growth and enhanced marketing and customer value.
In other words, throughout the customer’s lifecycle—from onboarding to retention—you can proactively manage touchpoints to enhance customer experience. Here are some foolproof tactics you can put to work across stages of the telco customer journey:
How is customer value management measured?
The metrics associated with customer value management often derive from measuring customer value and other related parameters. Here’s how it breaks down:
Every business should kick off by defining and measuring customer value. First, get to know the different types of customers you have, those with shared needs and likes. Figure out what parts of your product or service they truly value. Once you’ve got that, you can dive into some formulas to define those key customer value metrics.
Activities and outcomes
CVM isn’t just about understanding the value; it’s about boosting it. Therefore, metrics related to the activities and outcomes of CVM practices are key. These might include:
Feedback and insights
The qualitative data, often gathered through feedback channels, is key to CVM. Direct customer feedback, focus group insights, and social media sentiments provide context to numerical metrics and can help fine-tune how you implement customer value management practices.
What is the difference between CRM and CVM?
Customer relationship management (CRM) and customer value management (CVM) are two distinct but closely related concepts in customer management. Here are some basic differences to consider:
|Customer relationship management (CRM)||Customer value management (CVM)|
|Focus||Improving the overall customer experience by managing and improving the relationships between a business and its customers||Optimizing the value a customer brings to a business by understanding and fulfilling their specific needs and preferences|
|Objective||Improving customer satisfaction, expanding the customer base, and increasing business efficiency||Maximizing the lifetime value of each customer by tailoring products, services, and interactions to their individual needs|
|Tools and strategies||Software systems for tracking customer interactions, collecting data, and streamlining communication|
Managing customer profiles, resolving customer issues, and maintaining a centralized customer database
|Data analysis and segmentation tools to identify high-value customers and deliver personalized experiences|
Creating targeted marketing campaigns, loyalty programs, and dynamic pricing strategies
|Key metrics||Customer acquisition cost (CAC), customer satisfaction scores (CSAT), customer lifetime value (CLV), and length of sales cycle||Customer lifetime value (CLV), cross-selling and upselling success rates (customer profitability), and net promoter score (NPS)|
Basically, CRM lays the foundation for managing customer relationships and interactions, while CVM builds upon this foundation by focusing on strategies and tactics to maximize the value derived from each customer.
Both are essential components of customer-centric business strategies and even though there are some overlaps, they have distinct objectives and approaches.
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