Opinion: Why CEM has emerged as top priority for telcos

(Image Credit: iStockPhoto/Petar Chernaev)

There is no doubt the telecom market is changing. It has gone a lot of change not only in terms of how services are being offered by communication service providers (CSP) but also how customers perceive those services. Being able to deliver a seamless customer experience in an increasingly competitive, multi-channel world has to be a top priority for operators.

Customer Experience Management (CEM) can be defined as a discipline that uses the most relevant insights about the customer (and his behavior) to drive the right actions (and strategies) across multiple domains of the business and measure the results of those actions to refine both insights and actions in the future.

CEM (also known as CXM) is different than CRM (Customer Relationship Management). CRM programs have been in existence for more than 20 years know. With CRM, the focus was on improving internal processes to better support customers, reducing cost and increasing satisfaction. It was an inside-out view of how to manage a relationship with customers.

CEM, on the other hand, takes an "outside-in" approach. CEM is proactive, even anticipatory. CEM proactively initiates contact, delivers content, preemptively solves problems and understands customer preferences, often before the customer raise it or even knows about them.

For a niche (customer focused) market such as telcos, CEM is more important than it was a decade ago.   Let’s see why?

  • Operators are providing new plans, products, features, technologies and everything is just a click away. CEM teams can focus on providing best customer experience to customers such that the churn rate is as low as possible. It’s a known fact that acquiring a new customer costs five times than to retain an existing customer.
  • Another important factor is penetration of social media in customer perception about the network. A single unsatisfied customer can become more influential than the largest of companies and can spread enough negative sentiments which can impact their businesses both in short and long terms.  

For CSP’s, customer experience is the sum total of customer experience within different verticals in the CSP organization as shown in fig.1 below:

(Figure 1: Customer Experience for CSPs)

Telecom operators generally have low Net Promoter Score (NPS) score according to research firm Temkin . This essentially suggests that only a small percentage of CSP’s customers have positive sentiments about their network and services. These unsatisfied customers are more likely to churn and even while they remain as customers they are more likely to complain about the services being offered ,  making calls to customer care , enquiring about inflated bills etc. thereby increasing effective cost per customer in customer operations. An effective CEM program will address these issues.

Customer Experience Index (CEI)

There are many factors influencing a customer experience based on their plan, usage, billing, type of customer etc. For an effective CEM, it is important to understand the range of customer experience and weigh them according to their level of influence.

TM forum describes a globally recognized Customer Experience Index (CEI) to describe individual customer experience with the operator. There are four main inputs to CEI as shown in figure 2 below.

(Figure 2:  CEI and its components)

Of all the components contributing to a CEI, mobile network coverage and performance have the largest impact on customer experience.

Operators are devising new ways of checking the health of the network and finding out performance of different services which customers are using. Moving from NOC to SOC  , predictive analysis , Innovative billing plans , Voice of Customer ( VOC ) , Customer call back programs  are all part of an effective CEM solution for telecom operators .


CEM is a good way for organizations to shift focus on “customers”, indicating the fact that customers have more power than ever before. Focus on customer is not new, but failure to address customer issues and its impact are new to telecom industry. In a market, where loyalty towards operator is fast disappearing, CEM focuses on providing better experience to existing customers rather than investing in new customers.

Do you think CEM is more important than ever? Share your thoughts in the comments.

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