Convergence, heated competition, and an ever-more demanding customer set are transforming the telecommunications landscape. Saudi Telecom Company (STC) is keeping pace with all that change by staying close to its customers. In a conversation with Peppers & Rogers Group Partner Mounir Ariss, STC's Eng. Saad Bin Dhafer Al-Qahtani, vice president of Residential Sector Services, discusses the telecom's customer strategy and how that strategy helps to build customer loyalty and create a competitive advantage.
Mounir Ariss:How would you describe your customer strategy?
Saad Dhafe/Saad Bin Dhafer Al-Qahtani: We are a customer-centric organization, and our customer strategy is simple; we have segmented markets, from residential to enterprises, and this is reflected in our organization. We have four business units that serve different customer segments: residential, personal, enterprises, and wholesale. Within each business unit customer centricity is embedded in our marketing, sales, field operations, and customer support departments, which develop their strategies based on our customer segments. Furthermore, we are introducing management performance philosophies that also measure business units' achievement on a segment level.
Ariss:Why is it important to differentiate your business on customer strategy?
Al-Qahtani: Customers are the reason behind our business. STC's motto is Easier Life, and we are committed, as always, to satisfy our customers with all their communications needs, from voice and broadband to multimedia; rendering their choices simple, their decision straightforward, and therefore their life easy.
To be able to deliver on this promise to our customers, we need to understand them and focus our business around their needs. This will allow us to satisfy the evolving sophistication of the Saudi community, be it residential, personal, or businesses, and differentiate our value proposition in the market. Furthermore, with increasing competition it is more necessary than ever before to focus on our customers and create value for them; and this is what we do day in and day out.
Ariss:How will that set you apart from other telecommunications companies?
Al-Qahtani: While other companies might be targeting the 5 million households and 25 million individual living in Saudi, we target each one of them. This will allow us to get the ear of individuals, and to create value for them. This will also force each business unit at STC to design its offering based on customer needs, and therefore allow us to have targeted offerings, targeted sales, and targeted customer support. This will help customers feel more comfortable dealing with STC, and therefore ensure a long-term healthy business.
Ariss:How has convergence altered your strategy?
Al-Qahtani: Convergence is natural; as customers become more sophisticated, they will require seamless access to their voice, broadband, and multimedia services across different devices, and they will expect to use their mobile services at home and take their home services on the go. Being the only integrated operator in the Kingdom of Saudi Arabia (KSA), STC has the advantage of offering convergence services to its fixed and mobile customers. And STC was the first and only operator in the KSA offering fixed and mobile calls in one bill.
In a nutshell, we have always been committed to offering convergence services, and now the time has come for us to be more committed to do so; in our strategy today convergence and other emerging business models and disruptive technologies like VoIP, for example, play a major role and we are focusing on launching advanced convergence products. This will only be successful in a customer-centric organization such as ours because you need complete cooperation between the fixed and mobile aspects of the business.
Ariss:What steps are you taking to better understand your customers?
Al-Qahtani: We perform customer segmentation and update it on a yearly basis, we conduct customer surveys to build consensus on customer preferences and needs on a quarterly basis, and we offer online communities through our consumer portals where customers can voice their opinion and discuss their requirements. In addition, we continuously review international and regional best practices and perform our own cluster analysis and segmentation analysis, combining both behavioral and demographic information, to better understand customer needs and value propositions.
Ariss:What do you do with that information?
Al-Qahtani: This information is consolidated and analyzed on a regular basis to better understand the evolving needs of our customers. The segment that today needs basic voice services will require IPTV in two years down the road; and if we do not follow up on that and stay up to date we cannot deliver on our promise to the customer. Basically, we leverage this information to better design our products and services. Furthermore, this customer information will become even more essential as we launch multimedia services and delve into the targeted marketing space where customer insights and behavioral data become even more precious.
Ariss:How are the various customer-facing parts of the organization involved in that process?
Al-Qahtani: The customer insight information actually feeds into all departments, namely marketing, sales, customer care, and field operations. Marketing needs it so they can design their portfolio accordingly and make sure we have a crisp and differentiated value proposition for each segment; sales needs this information to prepare their sales plan to target different segments with the right packages and leverage the optimal channels for each segment; customer care needs it to excel in serving customers while keeping customer lifetime value in mind and making sure to always attract customers to services most relevant to their specific needs; and, finally, installation and repair services require this information to support our customers with their technical needs while making sure our most valuable customers get premium support. Essentially, customer insights and segmentation data is vital for our business and impacts all customer-facing departments.
Ariss:How do you treat different customers differently? For example, do you market based on customer value or needs or offer tiered service in the contact center?
Al-Qahtani: All customers are treated based on a customer excellence culture that was introduced a year ago in our call centers and is still being pushed every day. But we also have a well-established loyalty program called Qitaf, which we leverage to compensate our premium customers. Basically, our high-value customers:
- are rewarded through Qitaf with points, program enrollments, perks, etc.
- are directly flagged and do not wait in the queue when calling the call center
- get premium discounts and targeted offering that satisfy their needs
- get privileged and awarded gifts and prizes on a yearly basis based on their loyalty
We strive on a daily basis to make sure we create a win-win model for our customers and our business.
Ariss:How is customer loyalty unique in the telecommunications industry?
Al-Qahtani: Customer loyalty is necessary in every business; we spend a lot acquiring customers, so it's essential to our business to retain them. The telecom sector has clearly proven to be resilient to one of the strongest economic crises in history, growing at 5 percent while other sectors were sharply declining. But still, the options in telecommunications are many; and to differentiate in the marketplace you need to have a unique value proposition that attracts different customer segments to you and drives them to sign a long-term contract. Therefore, and considering the declining prices of communication services, retaining customers is not only about offering discounts anymore, but rather, it is about creating the right bundle, the right package for the right segment and continuously offering a premium customer experience to ensure business sustainability.