It’s Confusopoly! Why You Have to Optimize the Telecom Online Pre-Sales Customer Experience
Telecom providers are facing stiff competition, price wars and big mergers as they try to grow their customer base in a saturated market. For years, telecom companies have been (and still are) following the same model of vying for customers with lower priced bundles, family plans and introductory discounts, advertising to match competitor’s prices or allowing customers to switch and buy out contracts with competitors.
Add that to the consumers’ insatiable demand for “all-you-can eat” data and you have a true challenge at hand: Today’s consumers are more discerning than ever, use their mobile devices and apps to access over-the-top (OTT) services such as YouTube, Skype, streaming music services or Netflix, and expect their providers to support a “triple play” of technologies: Telephone, television, and Internet.
To stay profitable, increase margins, conversion, and ARPU (average revenue per user) in this mature market with flat growth, telecom companies will have to figure out how they can
- differentiate products and services
- monetize the delivery of these (new) services
- and most crucially: attract less price sensitive consumers who value these added value services and outstanding customer experiences
So how do you go about doing that?
Mind you, Customer Confusion Limits the Appeal of new Services
Most telecom companies feature large catalogues to provide targeted and personalized products or service offerings for each consumer and help maximize revenues. It create a huge sales complexity that could make any sales department cringe.
While consumers want more choice and expect their provider to offer products and services that fit their lifestyle to a T, they also want to understand what they are committing to. Anyone who ever wanted to sign up for a new mobile plan will confirm this: It’s just really easy to get confused. Not only do excessive M&A’s in the industry make it hard for consumers to differentiate between brands, picking a new provider also means diving into a complex decision-set of available smartphones, operating systems, features, data plans, storage, internet speed tiers, SMS packages and voice limits. It’s confusopoly for many consumers!
The current state of the telecom industry leaves them often feeling overwhelmed and wary. Many service offerings sound the same and consumers are leery that some pricing options (e.g., free minutes, unlimited data, various cap plans) are too good to be true.
Research by EY on the Top 10 risks in telecommunications shows that a significant proportion of consumers does not understand their mobile tariffs. As there is a positive correlation between the tariff understanding and the willingness to try our new services, telecom providers are best advised to reduce customer confusion and make the tariff selection process as smooth and hassle-free as possible if they want to attract new customers.
In their study about “Consumer Decision-Making in Telecommunications” Deakin University found that the plethora of options and bundles offered by telecommunication providers leads to stress, frustration, confusion, as well as indecision and inertia:
- Participants expressed a broad frustration and disappointment with the way in which the telco sector communicated to them. Some simply felt that the sector relied on “information overload” as part of its business model.
- All participants experienced confusion as a result, amongst other factors, of the jargon used by telecom companies.
- Many of the participants expressed difficulty in comparing telecommunications products; some used strategies to avoid actually comparing (and purchasing) products, such as postponing purchases.
- Other participants were happy to rely on recommendations from telco salespeople simply because they wished to avoid the effort involved in processing the copious amounts of information provided to them.
- Participants, especially those more vulnerable in the market, highly valued advice received from those in their social networks.
- Participants used a range of coping strategies when dealing with choice, including delegating decision-making to others or relying on simple psychological shortcuts such as brand loyalty
These are 3 things telecom companies must do to avoid confusing online consumers and increase their chances to convert visitors and upsell:
1) Strive for understanding customer preference first: What do they want, need and expect?
2) Offer flexible, customer specific bundles: This will help customers obtain the services they want without paying for what they don’t want
3) Complex data plan guidance: data plans are hard to understand so buyers need to have someone walk them through
For example, engage a customer visiting your online store in search for a mobile package, ask them questions to understand what they are interested in, guide them through the relevant contract options without getting too technical, translate plans into needs and terms they will understand, and finally present them with a selected list of available bundles according to their choice. Sounds like what any good salesperson would do.
If done well, this guided approach will help you attract new customers, increase chances to upsell and convert visitors.
UPC Cablecom does a great job of walking customers through their offer. They leverage the experience of their customer service staff to offer buyers a personalized purchasing experience by integrating an engaging, guided product and plan advisors. It helps UPC make sure their visitors feel they’re getting a product that is tailored to their specific needs, without overwhelming them or risking loosing them as they get frustrated by combing through the whole catalogue in search for the best plan.
The field of telecommunications is changing rapidly and telecom companies need to be on top of their game to maintain competitive advantage in today’s market. Aim for simplicity and reduce customer confusion and you’ll help potential new customers choose you over the competition.