Redefining the Relationship with the Digital Consumer How communications service providers can take command of the digital ecosystem

1. Redefining the Relationship
with the Digital Consumer
How communications service providers can
take command of the digital ecosystem
by Gene Reznik

3. The telecom industry is well positioned to connect with
today’s digital consumer. No other industry has an
equivalent number of customer touchpoints, ranging from
call centers to retail stores, websites, in-home service calls
and other modes of interaction.
At the same time, many Despite this advantage, telecom Managing this increasingly complex
communications service providers companies have tended to focus and unequalled web of touchpoints
feel that in the competition for digital their investment on network coverage requires a new mindset. It requires
consumers, they are operating at a and technology, leaving the customer thinking strategically about how best
disadvantage compared with more experience as more of an afterthought. to coordinate these touchpoints into a
innovative products and services Poor and fragmented experiences in very memorable, compelling customer
companies. the past have conditioned customers experience that will keep customers
to look elsewhere for good sales and coming back.
service. This has made room for others
This perspective overlooks the fact to take ownership of the customer
that other industries—from electronics relationship.
manufacturing, to retailers, to
software/app developers—are not as
well positioned as telecom providers to If telecom providers are to take
benefit from a high volume of customer advantage of their unique positioning,
interactions and resulting insights into they must innovate through the insights
customers’ behavior and needs. Telecom gained from their unparalleled array of
providers can redefine how to connect touchpoints. These touchpoints provide
with the digital consumer, on their multiple opportunities for growth
own terms. and innovation with each and every
customer contact.
Redefining the Relationship with the Digital Consumer 1

4. Navigating the Digital Ecosystem
Connecting with the digital consumer The retail industry has developed In order to fully grasp their opportunities,
requires, first of all, understanding tailored experiences targeted to telecom providers likewise need to take
customers’ needs, buying styles and different customer segments. New account of the multiple levels of the
preferred touchpoints. Telecom providers programs have been introduced, such as digital ecosystem, each of which offers
have tremendous opportunities to loyalty rewards, to increase the number different opportunities for customer
seamlessly integrate the customer of interactions. And certain retailer- engagement (see Figure 1).
intelligence they extract from across selected specific products have been
the many channels at their disposal. made available only in store, in order to First, there is the network, the core
But to do so, they must harness the push online shoppers across channels. of telecom providers’ offering. This is
growing quantity of information This multi-channel transformation a relatively predictable business, with
available from these multiple touch- is paying results in the frequency of very traditional ways of thinking about
points, analyze it, and apply it to customer interaction and customer issues like infrastructure, scale and
develop a tailored experience that engagement. Just imagine if retailers capital. It’s also a regional business.
reflects customers’ needs and had the customer data and volume And customer contact that focuses
preferences and that is consistent of interactions enjoyed by a telecom strictly on the network is likely to
across all channels. provider! be quite limited in its scope. New
network-based services, such as
location-aware applications, or digital
home connections (e.g., remote DVR)
are emerging; but many can be run
over-the-top, rather than relying on
the telecom provider’s infrastructure.
2 Redefining the Relationship with the Digital Consumer

5. Figure 1: The Emerging Digital Landscape
Internet support Phone support
At-home support
In-store support
CRM/Channels
Emerging
Satellite Network Digital
Internet
Landscape Services
Cable Entertainment
On-air Video
Fiber optic cable
Gaming
The services business is very different, venture capital. We’ve also seen a third And although many companies have
and quite frequently global. The dimension. As services have evolved, grown their businesses by expanding
addressable market for a globally sales, tech support and even retail have into the physical retail space, consumer
oriented consumer electronics and become core elements of connecting electronics and Internet/Web 2.0
Internet services innovator is estimated with a digital consumer. New monetiza- companies have difficulty supporting
to be nearly seven billion consumers. tion models in the areas of premium the consumer. They are not in a
When these companies make new technical services show that money position, for example, to dispatch
investments, they think about reaching can be made from the services business. technicians to the customer’s home.
as many customers as they can. This is a major differentiator for
But when companies in the telecom For example, although proliferation of communications service providers.
industry think about innovation and connected devices and new Internet-
making investments, they’re traditionally or Cloud-based services is driving CRM and channels, in short, offer
thinking about their constrained exciting new applications and benefits many new dimensions for consumer
geographic footprint. Telecom service to consumers, this all comes at a cost. interaction. As network technology
providers are structurally challenged Consumers are struggling to cope and high-speed access become the
to compete in the global dimension with the resulting complexity, which base case, customer experience
of the services business. is exacerbated by the increasing pace investments in channels/CRM will be
of change and innovation. Someone the new business case.
At the same time, the services business needs to hold the customer’s hand
is a highly unpredictable one, frequently and provide premium technical services
driven out of innovation centers to manage all these new devices and
like Silicon Valley and funded by services.
Redefining the Relationship with the Digital Consumer 3

6. Defining the Business:
Stick with the Core, or Build on It?
Value-added Services Performance
Enabling
Figure 2: Ways of Providing Value to the Digital Consumer
Your Digital
Integration Lifestyle
Value-added Services Performance
Enabling
Your Digital
Support
Integration Lifestyle
Value-added Services Performance
Support Enabling
Sales
Your Digital
Integration
Sales Lifestyle
Branding Reselling Certification Other
Branding Reselling Certification Other
Support
Service Provider-supported Solutions
Service Provider-supported Solutions
There are different ways in which telecom invest in each new innovative service, providers are well positioned to add value
providers can respond to this emerging Salesto their locally driven capital plan.
due through financing due to their large asset
digital landscape. As networks become and infrastructure base.
increasingly pervasive and consistent, So one dimension of growth is to
enabling services to move to a cloud determine how the telecom industry Clearly, providing technical support—
computing approach, the services them- Branding
can be relevant across all these digital Reselling of helping to set up and
in the sense Certification Other
selves are becoming the basis of differen- platforms. That approach can be applied manage the digital home—will be a major
tiation and competition. One extreme to virtually any digital device or solution; opportunity for players in one or more
response to this development is for telcos in most Service Provider-supportedsectors. Whether that support will
cases, telecom providers can use Solutions
to believe they need to focus on their Applications Programming Interfaces resemble today’s premium technical
network, and that all services need to be (APIs) to integrate these platforms with services model is not clear; but offering
delivered by third parties. But there’s also their own services. Over time, the telecom support, and providing service across a full
a second way of thinking about this issue, industry is well positioned to assume an range of devices and platforms, is going to
which is illustrated by Figure 2. increasingly larger role in the platform- become increasingly important over time.
based dimension of the digital ecosystem.
In this mindset, there are two dimensions. Integration, as we’ve noted, is a key
The first dimension focuses on the The second dimension is value—the opportunity for every one of these digital
evolution of digital platforms—devices value-added services that telecom platforms. Using APIs to integrate them
and other solutions—over time. Some of companies are positioned to bring to the with telecom industry services is a distinct
these solutions the telecom providers will consumer, beyond the provision of basic area of possibility.
choose to brand and develop themselves; network services.
some of them they will resell; and some And enabling performance—making
of them they will certify to work over What do you do once you connect the sure these platforms work well for the
their networks. Telecom providers must consumer to the home video game consumer—is also key. By owning the
get smart about their choices across this console? First of all, you can sell it and pipes, telecom companies can offer
spectrum, as they won’t have funding to finance it, then bundle it with traditional service level guarantees that others can-
communications services. Telecom not. This is especially relevant as cloud
4 Redefining the Relationship with the Digital Consumer computing and related services emerge.

7. Moving Up the Value Chain:
Questions for Consideration
Looking back at the overall digital robust, one-stop shop for communica- Finally, we ultimately expect the Web to
ecosystem laid out in Figure 1, value tions needs? It’s a different mindset be a key asset for telecom providers in
over time will move to the CRM cloud, from where the industry was three to terms of how they connect with their
including branded services and sales five years ago. customers. When services are digital,
distribution. The telecom industry will the Web will be a key component of
increasingly add value by both support- And while this overall direction is customer connectivity.
ing a broader assortment of consumer straightforward to understand, other
electronic devices and offering a deeper questions emerge. How do companies Communications service providers
dimension of service. Its branding will fully leverage their customer-facing need to realize that they are in a strong
increasingly focus on enablement— touchpoints and assets? How do they position to reach and be relevant to
providing consumers with the technical take advantage of the millions of call- the digital consumer. No other industry
resources and value-added services center calls they deal with every single touches the customer in as many ways
required to make the most of their year? How do they navigate location- as they do. Their assets are far-flung
digital lifestyle. aware insights? How do they leverage and pervasive, ranging from field force
and upgrade their retail experience? technicians and Web resources to retail
In this scenario, communications channels and call centers. Given this
service providers are not competing Technical support is another factor that network of touchpoints that they alone
with product and service innovators. merits close consideration. Globally, control, telecom providers can redefine
Instead CSPs are enabling these there is tremendous innovation in this how to connect with the digital
companies to better deliver their area. How can telecom providers cost- consumer on their own terms. They can
products and services, and enabling effectively deliver technical support partner, integrate and support new
customers to derive the full benefit of directly to the consumer? Should they devices and services in a way that will
these solutions. For example, why not charge customers for the service? both benefit the consumer, and enlarge
improve the service of a messaging Should the support service follow an their own consumer franchise.
provider by bundling the offering with insurance model, or something different?
other value-added services to make a Should the offer include preventive
maintenance?
Redefining the Relationship with the Digital Consumer 5

8. Copyright © 2011 Accenture. Contact Us About Accenture
All rights reserved.
Please visit www.accenture.com/ Accenture is a global management
Accenture, its logo, and communications for more information consulting, technology services and
High Performance Delivered about how Accenture can help your outsourcing company, with more
are trademarks of Accenture. company achieve high performance than 223,000 people serving clients
through innovative solutions and in more than 120 countries. Combining
services in the communications unparalleled experience, comprehensive
industry. Or contact Gene Reznik, capabilities across all industries and
Managing Director, Communications, business functions, and extensive
Media & Technology, Asia Pacific research on the world’s most successful
Operating Unit, Accenture, at companies, Accenture collaborates
gene.reznik@accenture.com. with clients to help them become
high-performance businesses and
governments. The company generated
net revenues of US$21.6 billion for
the fiscal year ended Aug. 31, 2010.
Its home page is www.accenture.com.