Customer value management (CVM) is a 360 degree way of analyzing individual customer to maximize its value. Once a discrete marketing strategy; CVM was used for building customer relationship and stop churning rate of customers is now becoming a mainstream strategy for telecom companies.
Ten years ago CVM was very raw and was based on CRM inputs and data from field team. And at that time it was mostly used to solve individual marketing issues such as churning of customers, know your customers, acquire new customers and for making campaigns.
But today, availability of big data on a real time basis has made CVM different altogether from what it was a decade ago. New framework of CVM is an integrated approach and helps solving bundle of marketing issues with one framework. It uses modern business intelligence tools that help in processing data on a real time. This is helping telecom CMOs to plan marketing strategies which are responsive and cater customer need on real time.
What today CVM wants is to help telecom company CMOs focus on retaining high value customers such as corporate accounts and individuals.
Most telecom companies have already invested in business intelligence tools and analytics platforms and have teams in place. CVM is a clever use of available data and BI to assess individual customer and identify its value to the company. Most of the CMOs have admitted that they will spend money rather on retaining existing customers than acquiring new one. As per one estimate it costs more to acquire a customer than retaining it. The focus is on reducing churning of existing customers and keeps them engaged with personalized campaigns and offers. The strategy is to increase ARPU by offering cross and upselling services.
What shortcomings CVM has for telecom industry
However there are many shortcomings in CVM implementation and that makes CMOs a challenge. There are no standards about what CVM should be and we can find solutions of different kinds that claim being CVM. On a broader term CVM is competing with CRM (Customer Relationship Management). Both are using similar data but the approach of CRM is customer acquisition and where CVM focuses on retention of existing customers. Again this is very general statement as CVM is still struggling to define its position in a bundle of marketing strategies used by CMOs.
Most of the CVM tools and frameworks available today lack clarity in their outcome. There is no process to measure the outcome and it could be understood only after the release of campaign or personalized offers to the customers.
Need more case studies to prove
Case studies or use cases play important role while justifying the investments in CVM. However, there are no prominent case studies CVM vendor could produce on telecom industry. It creates a doubt whether CVM is working in telecom industry?
The case studies available are very poor and provide superficial information about their success in achieving the results such as achieving customer retention or increase in ARPU.
And therefore, it becomes extremely important for CMOs of telecom companies
- to select CVM vendor who have in depth understanding of using various analytical techniques and tools to decode customer data
- It is very important that vendor should understand the problems telecom company is facing and problem evaluation and analysis becomes extremely important step before offering any solution
- CVM vendor uses business intelligence tools and frameworks that will show real time churn analysis, campaign management analysis and ARPU analysis
- CVM to send alerts on real time basis to take quick decisions on holding or promoting campaigns, offers or design a campaign
- And there needs an evaluation mechanism to measure post campaign / event effect of CVM
For CMOs and CVM managers justification of investments in CVM tools and frameworks is easy if CVM is able to measure the effectiveness of the outcomes. It is very important that CVM vendors continue handholding with CMOs and CVM managers even after implementation of the framework. Time to time evaluation and updates of CVM tools is a must for keeping the quality of performance of CVM high.
CIO-CMO relationships need to be strengthen
CMOs of telecom and carrier companies realize that CVM is extremely essential marketing tool in their kitty today. Illiteracy about digitization and real time analytics is hampering the effective use of CVM. Even today we do not see any effective use of CRM and handling of customer feedback mechanisms, and therefore just adding a tool should not be sole purpose of CVM. It is very necessary to have CIO and CMO to strengthen their relationships to effectively manage the big data and analytics which is a basis of CVM. Team from CIO office and CO office need to work together to see campaigns work effectively.
There is a shift in strategy from customer relationship management to customer value management. Understanding value of a customer and treat him accordingly is a new marketing strategy used by telecom companies. CVM tools and frameworks play important role in this process. However, lack of professional approach is deteriorating value of this useful approach.
CMOs of telecom companies need to be vigilant and alert while selecting CVM vendor who can help them in visualizing and measuring the effectiveness of investments they are making. Take help from CIO team, use measuring tools to justify investments pre and post analysis of events, use real-time alerts and other mechanisms to measure success of the campaign and do not over burden customers with personalized offers….
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