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Send  Share  RSS  Twitter  09 Mar 2012

INFOTECH: Customer Retention is Key – Turning Customers Into Fans


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Customer retention has profound implications for all businesses and for many large companies, up to 95 percent of profits come from long-term customers. Finding a new customer costs from three to seven times more than keeping an existing one. This is according to a recent study by Price Waterhouse Coopers.

Local specialist IT services and solutions provider, Altech ISIS, says companies should not merely survive in the billing jungle but rather learn to thrive on the new opportunities presented. It points to evolving real time charging technologies that allow for a better customer experience and profit growth.

“Do you know what the fundamental difference between a customer and fan is,” asks Altech ISIS CEO Anton van Heerden. “Both have an interest in the organisation support and both invest their time and money in supporting that organisation. Furthermore, both have a vested interest in the success of the organisation they endorse, be it a sports team or a Communications Service Provider (CSP) that is providing what is often a mission critical service.”

He says the difference between the two is the depth of the emotional relationship that exists between them and their chosen team or service provider and the consequent stickability and loyalty that exists. “A customer may leave an organisation for a host of reasons but a fan does not.”

“Once an organisation understands what customers truly want and then knows what product or service to deliver at the right time, service level and price to satisfy those needs, only then does the customer begin to develop a deeper attachment to that service provider. That customer becomes a fan. Fans do not swap allegiances on a whim. Fans forgive more. Fans stay customers for longer. Fans generate more lifetime revenue and profits,” he explains.

The Best Billing Process For You

So how can billing drive this process‘ There is currently a need for a departure from traditional billing due to the introduction of or need for smart phones, extended data usage, converging of services with 4G, competiveness and billing transparency.

In the past, two main CSP billing models have applied post– and prepaid. In the current model, both frameworks offer the CSP, and the customer, various advantages and disadvantages. Traditionally post-paid billing was dynamic, but reactive whilst pre-paid billing real time but inflexible. The goal is how to drive the consumer benefits of both, without the cost and operational inhibitors.

Post-paid billing may be batch driven, delayed or near real time, this model allows for discount policies, offer bundling, usage based pattern analysis and increased customer awareness and understanding. One of the downsides includes bad debt which could be largely due to volumes and costs, seen only after the event.

Pre-paid billing can solve the initial conundrum, it is real time but is traditionally flat rated. This requires on-the-fly checking, implementing and debit cycles and lacks the flexibility of post-paid. Charging fundamentals require flexibility, which is configuration driven, and predictability – involving performance and up time.

Van Heerden says the problem is that these are two conflicting statements. “The ideal system would allow the real time elements pre-paid with the flexibility of post-paid. The challenge for CSP’s is how to utilise the evolution in Real Time Converged Charging (RTCC) optimally and cost effectively to satisfy what are often system divergent requirements.”

Capitalizing on Different CSP Billing Structures and Making Them Work

Leaders in CSP billing will be those who build a flexible and agile billing system infrastructure, those who are fast to implement innovative new services and, crucially, those who understand how to integrate the RTCC engines into the wider CSP architecture. In particular the CRM and Business Intelligence and Analytics tools that drive understanding of the customer. Allowing spending control is also crucial to todayÂ’s customers, who want to know what they are paying for and how much it will cost before committing to buy.

According to Gartner, creating offers in real time requires the use of immediate information on customers, such as their current usage, location and billing details. “CSPs use pattern-based techniques to create offers using these engines, typically drawing on customers’ usage history or other business intelligence data. We also see them starting to use context-aware information, such as a customer’s prepay account balance or arrival at an airport, to ensure offers suit the immediate context.”

Using this context-aware information will not only bring the customer closer to the CSP but also allows them to proactively manage call limit locking, provides usage alerts in real time and provides billing transparency, eradicating bill shock. Ultimately, the customer is put at the forefront of the billing paradigm.

“Other than a more empowered and loyal customer, this approach offers other benefits to the CSP. RTCC allows for linking the pricing catalogue, usage policy management and billing functionality. In this way, high usage, high revenue customers can be better managed. Therefore, be provided with better service levels as throughput is managed using all three elements,” he says.

Immediate usage is visible across multiple touch points such as Web, devices, etc. With the introduction of 4G LTE, voice becomes just another data service. It‘s much easier to manage a single service type which has fundamental cost management advantages.

Altech ISIS has observed how RTCC solutions, properly integrated to all of the adjunct CSP network elements and business functions, has meant that these market leading CSPÂ’s have more agility, OPEX efficiency and have seized market opportunities earlier than their rivals.

“In CSP’s where Altech ISIS has designed, developed and integrated such solutions, we have seen increase in the awareness and understanding of the customer and an overall long term revenue upliftment.”

“Finding and working with a partner who understands how to link a RTCC system to your current BSS and OSS is crucial to providing the casual link between turning a theory of real time billing and revenue optimisation into reality. Understanding more than just the systems, but also how those systems can positively impact your customers, will ultimately turn those customers into fans and long term profits,” he concludes.

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