UK telecoms regulator Ofcom recently announced that it is to introduce rules to ensure broadband, TV and phone operators tell their customers when their contracts are coming to an end. This is intended to prevent consumers rolling back into largely uncompetitive ‘standard’ tariffs without them knowing. According to Ofcom, this practice typically sees UK consumers paying 20% more for the same service received during the initial term.
The end of consumer inertia?
Consumer inertia has always existed, across all industries in all countries. The fact remains that it is always easier to do nothing at the point of renewal, rather than shop around for the best deal. Times are changing, however. Telecoms operators, much like utility companies and financial services providers are having to endure consumer facing product comparison websites, a rise in third-party digital switching companies and generally, a greater consumer awareness of new offers. The truth is, it has never been easier for UK consumers to find and take a better deal from elsewhere. With Ofcom now forcing telecoms operators to tell customers it’s time to renew their tariffs, a lack of awareness will no longer be an obstacle to ‘shopping around.’
UK telecoms operators must embrace this significant opportunity. They must use the data they have on their customers to create targeted and personalised offers to them as renewal time approaches. If Ofcom forces operators to share the best deals available to their customers at the point of renewal, then this should be treated as the final link in the chain to encourage retention. The fact remains, operators will have a long window available to them, and have an individual usage and preference perspective on each customer that the competition won’t. This creates a significant window of opportunity for an operator to convince their customers that they truly value their business.
Coming out of the shadows
Telecoms operators in general have struggled to maintain brand awareness in recent years. Much has been said about operators being forced to accept utility-like status in the minds of their customers. Content providers, social media providers and OTT messaging communities hold most of the cards when it comes to mobile consumer engagement, with operators becoming an increasingly invisible part of the service value chain. This is incredibly surprising given that operators enjoy a regular monthly billing relationship with their customers, when most others don’t.
UK telecoms operators, much like their global peers, are looking to build or strengthen a series of partnerships with well known brands, to try and boost customer engagement and position themselves as the 5G operator of choice. These partnerships will include teaming up with content providers like Spotify, Netflix and Apple Music. They will include device partnerships with the likes of Apple and Samsung and, also include deals with the social media networks too. These partnerships will create differentiation but knowing where best to target this content and these services will be critical to drive the required levels of customer satisfaction and retention.
The technology exists to act
Operators have the data and the means to focus these offers to the right users at the right time. What is more, thanks to the agile and flexible nature of digital BSS technology, they can be quick to trial new offers, should some not have the desired impact at the first time of asking. Ofcom’s new rules will present UK consumers with more choice, while placing them in a buying mood – UK operators know exactly when this will take place for every one of their customers. Every customer that churns will herald a failure for operator marketing teams and underlying digital BSS technology. The solutions are available to help UK operators prevail. They must react positively to Ofcom’s rules and quickly, if they are to take full advantage of the enormous opportunity facing them.
This blog was first published in telecoms.com