CRM for prepaid customers

Most telcos are used to engaging with their postpaid customers using sophisticated customer relationship management (CRM) solutions and highly efficient CRM processes. Operators typically draw on classic call center techniques such as knowledge of customer history and key demographics, for example, to inform the overall approach to service delivery and drive up-sell and cross-sell opportunities.

By contrast, prepaid customers have traditionally been serviced using only basic administration systems and rudimentary self-care, supplemented by text messages and handset alerts.

Today, this situation is changing. In advanced markets, many operators have made significant progress in upgrading their prepaid CRM capability. In emerging regions, however, it is now becoming an area of critical concern and telecom providers who can quickly address the CRM challenges can take the lead over their competitors in this area.

Keeping the customer happy

Operators have always been painfully aware that because their prepaid customers are not contracted, it is easy for them to switch to a competitive offering. For this reason, operators are increasingly recognizing the need to develop closer relationships with prepaid customers and raise their loyalty levels. After all, while postpaid customers are typically contacted once a month through the medium of a printed or electronic bill, the way prepaid accounts are structured means that there are few natural opportunities for dialogue between operator and prepaid user.

The key for operators then is to encourage and promote more effective engagement with their prepaid customers and then ensure that they have the tools in place to manage this communication more effectively.

Providing an incentive

Operators in the past have typically delivered two different levels of service to prepaid customers. The most basic has been provided to customers that wish to remain anonymous. In certain parts of the world, where regulation still permits prepaid anonymity, this group represents a significant proportion of all prepaid users. However, operators in the more advanced markets have been providing incentives to those prepaid customers that are prepared to give more information about themselves in exchange for a reward.

They might, for example, give each customer an extra bundle of text messages or throw in additional services free of charge, if those users supply their name, address and information about their interests. If operators are serious about offering more effective CRM, it is critical that they capture this kind of basic information as the foundation for developing and enhancing the customer experience.

Putting it in context

Operators regularly use techniques like data mining and data warehousing to analyze usage patterns and build customer intelligence. Yet, to deliver a better level of service, they need to understand much more about who their customers are, what they do, to whom they are related both in a family and a business context and, most critically, whether they are likely to be influential in the way other people use the service. This is more important than ever in the new era of online social networking.

For these reasons, they need to pinpoint each user’s precise role. Are they the head of the household? Do they have a prepaid service for home, but also a key senior management role within the workplace? These factors will, and indeed should, influence the approach that the operator takes in providing CRM.

Those operators with the most comprehensive CRM systems will be best placed to understand and capture all the relevant information relating to the role of each of these individuals in the different ‘communities’ in which they operate.

Keeping in touch

The other challenge that operators face in the prepaid environment is establishing regular lines of communication. In the prepaid world, users have historically been steered either into online self-service situations or doing everything via their handset.

But prepaid users, like their postpaid peers, still like to be able to talk to individuals when they have a problem. So having a CRM layer that covers both sets of users, and critically empowering the customer service representative (CSR) to capture more information about the particular customer through a one-to-one telephone conversation, can be a major benefit.

The operator in this context has two key objectives, both of which can be achieved more effectively if there is a proper CRM capability in place. The first is the need to build the loyalty and ‘stickiness’ of prepaid customers. If the operator can focus on looking after these subscribers as individual people rather than as telephone numbers, they are likely to stay loyal for longer.

To further boost retention levels, operators also need to ensure that prepaid customers are managed in real-time. Prepaid users are aware that their balance will be instantly changed as soon as a transaction is made and if they run out of credit, the service is suspended. So, if a customer does have a problem and contacts the call center, it is critical that the CSRs have a real-time view of the customer information to be able to take immediate action to resolve it. This level of visibility is only possible if the CRM application is closely integrated with the back-office tariff and charging systems.

Of course, retaining customers is not sufficient by itself. Operators also want to drive increased service usage and higher average revenue per user. This is where the CRM layer really comes into its own as a means of cross-selling and up-selling additional products and services. A good CRM system can tell the operator what additional services could be offered and what might be compatible with their existing portfolio, driving inbound and outbound campaigns.

The operator might also want to encourage prepaid users to migrate into the postpaid world. By offering these users incentives such as lower tariffs, increased service bundles and subsidized handsets, it could tie them to long-term contracts, which provide a more predictable and secure revenue stream. By using a single CRM solution to manage both prepaid and postpaid users, it will be easier for operators to incentivize customers using hybrid services to start the migration to longer-term contracts.

In the UK, operators have begun to offer extremely competitive deals on SIM-only contracts to bridge the middle ground between the traditional postpaid contracts with subsidized phones, and prepaid services with higher tariffs and full-price handsets. The operators’ ultimate objective is to tempt prepaid users to take out long-term contracts without themselves having to carry the burden of subsidized handsets.

New focus

In the current economic climate, CRM projects must be extremely focused and enable timely delivery of real benefit to the business. In this situation, operators will achieve significant benefits by implementing telecom-specific CRM applications. They will not have to derive all of the processes from scratch, or configure a new business logic for the telecom sector. They will have the benefit of knowing that their users will have access to a range of telecom-specific services, such as the ability to add and provision new services immediately from the CRM platform.

We are witnessing a sea-change in the way telcos view and manage their prepaid customers. The high levels of churn among these users mean operators must increasingly focus on engaging more closely with this segment of their customer base, gathering relevant information about them and using that to enhance the service offering they provide.

No longer the poor relations of the telecom world, prepaid users are increasingly being brought into the fold and look set to soon achieve equal status with their postpaid peers. The use of specialized telecom CRM systems to upgrade prepaid users from the simplistic customer management they typically encounter today is the key to providing them with a much more comprehensive and sophisticated customer experience.

Dominic Smith is marketing director at Cerillion Technologies Limited