Editor’s Note: Welcome to our weekly Reality Check column where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.
Customer migrations are a fundamental reality for the telecoms industry. Well executed transitions are seen as non-events, but poorly-executed transitions can trigger legal action from customers, become a reputation nightmare, erode business value or cause a mass customer exodus from a service provider. Service providers have the opportunity to execute transitions well – by having deep insight about their customers’ needs, planning cross-functionally and avoiding reacting, leading decisively and focusing their process. A well-executed transition can enhance a service provider’s brand or reputation – and even catalyze a new phase of growth.
Industry shifts trigger migrations
The most widespread shift is the rapid pace of generational change in technology. Technology transitions are investment intensive, typically occur over an extended period and create the need to migrate subscribers from one network to the other. Beyond technology innovations, merger and acquisition activity, regulation and other business model disruptions also cause a constant flow of change for service providers.
An opportunity to renegotiate
For consumers, a migration is an opportunity to renegotiate contract terms. For service providers, this renegotiating can mean customers assess their overall needs for service – potentially opening the door to evaluating alternate providers.
In the U.S. wireless industry where customers are served by multi-year contracts, a migration event may let customers terminate their contracts without a penalty. Consumers tend to expect that such transitions shouldn’t affect them financially.
Despite the disruption, service providers must seize the opportunity to position their future offerings positively. For a migration to be effective, providers have to mix traditional incentives with marketing new capabilities to retain customers.
Customers up for grabs
A highly competitive marketplace influences technology and regulatory changes, which in turn creates more pressure to make the difficult decisions to retain market share. In the Unites States – where mobile penetration is greater than 102% – any misstep a service provider makes in managing its subscriber base is quickly seen by a competitor as an opportunity to grab market share.
Service providers have the added complexity of supporting multiple technology platforms – a portfolio of networks, each at varying degrees of maturity. The orderly transition of customers from one platform to another allows a provider to manage its portfolio efficiently, allocating to each network the right mix of capital expenditures and operating expenditures.
When facing a regulatory or a transaction-related requirement to migrate customers to a new platform – usually coupled with tight timelines – a service provider has to focus on both effective migration and avoiding execution penalties.
Opportunities for change
The need to migrate customers gives service providers a unique opportunity to perform multiple actions with its customers that wouldn’t be possible if they were doing business as usual.
A migration event can be a trigger for a profitability analysis of the service provider’s customer base. A service provider’s products and services may be strategically evaluated and may afford opportunities to showcase new capabilities to customers. Migrations also offer the chance to facilitate the updating of legal contracts, service profiles are cleaned up and databases are updated accurately. This in turn affects billing and the ultimate result can be a revenue assurance adjustment, often to the benefit of the service provider.
In a sense, migration costs can be booked as a one-time charge and can offer a measure of financial cover for taking more radical actions concerning customers. For that reason, service providers have more latitude to undertake customer “pruning” actions to maintain profitability.
Migration’s heavy lifting
Large-scale migrations have demonstrated that there are four major phases to follow in executing a migration:
1. Assess. Service providers must understand the service coverage and availability, product feature and functionality changes, and device/customer-premises equipment replacements brought by the migration.
2. Plan. A best practice for managing the migration effort is to establish a centralized, cross-functional project management office.
3. Migrate. When the time comes to migrate, the PMO should monitor and communicate constantly about the most critical risks.
4. Retain. The final step is to collaborate with customers after they’ve been migrated to be sure they’re satisfied with the process and the quality of service.
What will make a migration successful?
There are a number of elements that contribute to making large-scale customer-migration programs successful:
–Know your customers. Perform deep customer analytics to establish segments and how to treat each segment.
–Map product and service offerings. Establish a consistent set of product and service offerings between the old and new networks and agreements to offer subscribers either similar or better features.
–Establish timelines and deadlines. Communicate these timelines broadly internally and externally and stick to them.
–Perform a comprehensive risk analysis. Evaluate all contracts with customers to understand and to anticipate any potential liabilities for service offerings that depend exclusively on the existing platform.
–Communicate early and often. Use every channel available to make customers aware and to get them to act promptly.
–Offer appropriate incentives to all parties. Offer customers positive incentives to migrate, such as subsidized devices, service credits, accessory credits and flexible contract terms.
–Use billing and financial reporting to support the transition. Decide carefully how to bill for service during a transition.
–Expect the unexpected. Plan for problems that can’t be known but that will arise during a migration, and decide how to remediate them immediately.
–Establish and track against targets. Keep executives informed with weekly progress reports.
–Don’t look back. Once a customer has been migrated, don’t move that customer back.
Ultimately, migrations require disciplined, cross-functional program management that’s dedicated to the migration effort and that focuses on customers. Most service providers should anticipate needing to move customers to a new platform. Beginning to plan now for an orderly migration will result in the most efficient and effective process, and help keep customers satisfied for the long term.
