February 2017 Market Research This presentation explores background - PowerPoint PPT Presentation

M a k i n g C u s t o m e r Va l u e C r e a t i o n the New Competitive Equation February 2017

Market Research This presentation explores background research on the Omni-Channel as it relates to the telco industry. The research includes previous reports by the CMO Council and other third parties as well as current high-level findings from the recently launched “Getting Serious About Omni- Channel Experience” research project, spearheaded by the CMO Council in partnership with Huawei.

Research Attributions CMO Council & SAP: “Context Commerce & Customer” • Research based on survey of 170 global marketing leaders • Report focuses on digital marketing and customer experience CMO Council & IBM: “Connected Interaction to Power Brand Attraction” • Research based on survey of 198 global marketing leaders • Report explores digital transformation and its impact on the relationship with the customer CMO Council & Openet: “Making Sense of Subscriber Complexity” • Research based on survey of 212 executives in telco • Explores development of data-driven, personalized user experiences EY: “Global Telecommunications Study: Navigating the Road to 2020” • Research based on interviews with 40 industry leaders worldwide including telecommunications operators, technology companies and industry experts

ICT Industry Overview Industry trends impacting the evolution of the ICT industry: • On-boarding IoT • Proliferation of channels • Increasing significance of digital Major roadblocks plague the industry: • Disruptive competition • Uncertain regulatory environment • Lack of organizational agility On the road to digital transformation: • Worldwide spending across industries on digital transformation technologies will reach $2.1 trillion in 2019 • The end goal for ICT: - Improved customer service - Seamless integration of channels - Consistency of experience across devices EY: "Global Telecommunications Study: Navigating the Road to 2020”

Digital is Changing the Brand’s Customer Experience Ecosystem Most critical aspects of customer experience: Fast response times to issues, needs, complaints – 75% • Consistency of experience across channels – 55% • Clear, consistent messaging and information across channels – 46% • The shift to digital has changed engagement with customers: Altered content strategy: more content types & formats – 60% • Need for aggregated data pulled across entire company – 44% • Turned engagement into a 24/7 opportunity to connect with customers – 38% • Top mandates brand marketers face: Better connect campaigns into a connected experience – 42% • • Tie entire customer experience journey together across physical and digital engagements – 37% • Bring on additional resources and technologies to better manage data and automate experiences – 29% CMO Council: “Context Commerce & Customer” CMO Council: “Connected Interaction to Power Brand Attraction”

Data-Driven Customer Engagement: Brand Leaders vs. Laggards What is a brand’s relationship with data? • Leaders gather data from points of transaction and engagement, action on real-time customer feedback and integrate third party market data • Laggards are struggling to identify customer behavior information and fail to gather insights from points of engagement and transaction Sources of Customer Leaders Laggards All Marketers Behavior Knowledge (14% stuck in a data rut) (5% reaching data success) Where customers are 15% 51% 80% engaging and transacting 48% 55% 30% Customer feedback Third-party market data that 30% 33% 40% could impact the customer We are struggling to identify 78% 36% 10% customer behavior information CMO Council: “Connected Interaction to Power Brand Attraction”

How Telcos Are Keeping Pace with Digital Transformation Top digital experience goals: • Connect campaigns into connected experience that drives engagement across the entire lifecycle – 42% Tie the customer experience journey across physical & digital engagements – 37% • • Bring on additional resources & technologies to better manage data, initiatives and automation – 29% Keeping pace: • 69% of executives believe the ICT industry has strong technology capabilities, but will find it difficult to complete digital transformation projects quickly enough - 64% believe this transition could be outpaced by other industries Roadblocks to enhanced digital customer experience: • 81% struggle to launch and provision new services quickly and cost effectively • 75% need integration between disparate data sources • 72% lack the subscriber insight and intelligence critical to the execution of a more personalized user experience CMO Council: “Making Sense of Subscriber Complexity”

How to Manage Complexity Carriers point to: • Simplifying the customer experience – 44% • Overall subscriber data management & integration – 43% • Replacing declining core service revenues – 32% • Differentiating services from competitors – 29% • Personalization of marketing and CRM campaigns – 28% CMO Council: “Making Sense of Subscriber Complexity”

The Omni-Channel Imperative: Initial Findings of Current Research “Getting Serious About Omni-Channel Experience” Ongoing research by the CMO Council in partnership with Huawei

Proper Omni-Channel Management: The Imperative to Enhance Customer Experience

Market Influencing Disruption Top 5 market factors contributing to how telcos and brands interact with customers: • More empowered, peer-inspired digital customer • Higher expectations for real-time, always on response • Cross-culture complexities and challenges • Customer shift to mobile content, commerce & convenience • Millennial market demands for digital engagement

Characteristics of Enhanced Omni-Channel Experience Top 5 characteristics of a complete , fully functioning, data- driven Omni-Channel experience in the telco sector: • Seamless, frictionless commerce and faster problem resolution • Individualized interactions and richer, deeper knowledge of customer journey • Higher levels of conversion, customer profitability and retention • Fully integrated channels of engagement -- social, mobile, web, contact center, and in-store • Consistent, personalized and contextually relevant experience across all channels

Current Gaps in Omni-Channel Management Model Top 5 gaps in the current Omni-Channel management model: • Mapping effective migration strategy and transformation plan • Having the necessary talent, technology and process in place • Implementing best practices across the organization • Specifying the right architecture and scalable infrastructure • Adding proper governance and oversight

Brand Concerns in Working with Telcos Telcos Think: Actual Brand Concerns: 1. Technical/operational 1. Data privacy concerns mindset 2. Costs or control 2. Data privacy concerns 3. Regulatory scrutiny 3. Data quality, accessibility 4. Bureaucracy & complexity and ease of integration 5. Responsiveness 4. Bureaucracy & complexity 5. Lack of innovation or willingness to transform

How Can Telcos Help Brands? Top 5 ways telcos can help brands deliver on their customer promise: • Data sourcing, customer insights and behavioral analytics (Telecom Data as a Service – TDaaS) • One-to-one marketing and personalization at scale • Promotional partnering or co-marketing • Social and search marketing optimization • Customer help and multi-channel contact management