Telecommunication providers have enabled history’s fastest innovation era witnessed on a global scale. Despite being at the epicentre of this growth, telcos have not been the biggest beneficiaries of the value creation driven by the internet economy. They have experienced declining revenues to their core business (voice, SMS and other connectivity driven revenues) with disruptors, namely Over-The-Top (OTT) and social platforms. These platforms have resulted in better engagement with consumers as it benefits from new business models. Revenue growth is declining or in low single digitals and EBITDA margins have been under constant pressure due to the competitive intensity.

That said, the telco’s inability to deliver seamless customer experience has been a key constraint limiting their ability to grow and innovate. Note that this is the era where enterprises across diverse industries are competing fiercely over customer loyalty.

The solution? Create a frictionless platform where customers can start, discover and manage their journeys intuitively. The value is no longer in the product or service, it has been commoditised. The value is in the outcomes that you enable. The SUPERAPPs such as GRAB, Amazon, Shopee, Gojek have a significant lead in owning consumer journeys. However, the consumer’s digital needs are likely to evolve significantly over the coming decade, creating opportunities for telcos to own and win share in some of these evolving needs. This is in essence what a “Digital Telco” is all about: the ability to build a “digital native” business that offers a few adjacent services in addition to connectivity.

The essential ingredients to building a digital telco that customers will rave about

A successful digital telco embeds deeply into the customer’s lifestyle.

With the current technology, long gone were the days when customers had to reach out to you for a service or product. It’s all about meeting your customers right where they are and fulfilling their needs and wants before they ask for it.

Building a successful digital telco requires:

1. A compelling brand story
2. Architecting your network as an experience platform
3. Converting your customers into your fans
4. Reducing the cost to serve by ~ 40%

These four points help to create value in the eye of your customer. It targets the customer

1. Psychologically – by captivating them with a brand story worthy of support
2. Functionally – by making their experience with you seamless
3. Economically – by reducing their time spent figuring out your service, while getting better experiences at better value

5 benchmarks of success for every digital telco

The transition to a digital telco will require businesses to redesign customer journeys and add new capabilities. While the traditional measures of business success will still apply to the connectivity-led business unit, we need to now embrace new measures of digital success. So how do you track your digital telco’s performance meaningfully?

Consider looking at:

1. Efficiency score
2. Engagement score
3. Ecosystem value
4. Brand experience
5. Employee experience

1. Digital efficiency

This is a measure of the ease of doing business. It indicates how easy customer processes are. The simpler and faster crucial customer journeys are – the more time and effort customers get to save.

Consider tracking customer journeys across three crucial touchpoints in your digital telco:

2. Digital engagement

The more engaged customers are with your platform, the more time and money they are willing to spend with you. Also, an engaged customer is an indicator of a more loyal customer.

Best practice – Grab

*insights from Grab

3. Ecosystem value

Every major brand is trying to build their own ecosystem. And with good reason. Having a successful ecosystem means being able to fulfil a wider variety of customer needs – therefore keeping customers with you for a longer term. This stands true too for digital telcos.

Best practice – DBS

Best practice – Ping An

4. Brand experience

Research showed that customers are more likely to gravitate towards topics with a cause. Brands are no exception. To create a memorable brand experience is to craft a compelling story and facilitate activities that will attract, connect and convert customers relationships from being merely transaction focused to one that is emotionally invested. To put it in another way, you got to create fans.

There are many building blocks to nurturing fans. The store is an important touch point to help build and elevate the brand experience. The customer journeys at the store should reflect the digital native nature of the new business. It should be a playground for customers to learn, engage and consume these services.

• Craft rituals, traditions and shared experiences

It’s all about orchestrating memorable activities that your customers can get excited about, participate together and deepen their relationship with you. It should be repeatable to encourage that habitual anticipation.

Best practice – Shimano

5. Employee experience

A successful organisation is an organisation with satisfied and engaged employees. Show them genuine care and they go the extra mile for you – they are more creative during problem solving, resilient during challenges and empathetic towards your customers.

Best practice – SK telecom