Communications service providers (CSPs), whether mobile or cable/wireline, are facing renewed regulatory and market pressure on traditional income sources, as well as increasing competition from over-the-top providers. The fight to retain and gain revenue, grow market share and avoid becoming commoditized is relentless.
To differentiate, CSPs need to rethink the way they interact with their subscribers. With the deluge of data services flooding the market, there’s never been a more critical time to treat customers as individuals by building relationships through contextual, relevant, timely and personalized interactions. This transition will see CSPs evolve from traditional telcos, wireless providers and cable operators to full-fledged Digital Service Providers (DSPs).
The sophisticated new capabilities of Artificial Intelligence (AI) stand to play a significant role in this transformation, creating new opportunities for better customer engagement across all channels. With the proliferation of touchpoints such as chatbots, virtual assistants, in-app messaging and two-way SMS, a strong ecosystem is being created that is remodeling the communications landscape.
When properly deployed, AI can help DSPs deliver a significantly better customer experience, increase customer loyalty and facilitate the exploitation of every revenue opportunity. AI enables automated processes for the vast majority of customer interactions across phone, web, text/SMS, mobile app, social media, and messaging channels. Importantly, AI has the capability to do this effectively and build customer confidence in the non-human interface. Here are three ways AI can enable CSPs’ digital transformation initiatives:
1. Conversational virtual assistants can engage in two-way dialogue with subscribers, delivering true omnichannel engagement. These digital assistants can be integrated in practically any connected device, including the car, smart TV/set-top box, mobile app, and smart home technology like Amazon Alexa and Google Home. They can be used to assist subscribers with content and entertainment discovery and command/control of connected devices, all through our most familiar and intuitive interface: our voices.
2. The vast amounts of information that CSPs have about their customer base can be harnessed to generate incremental revenue. As the data is analyzed and the knowledge of customer behavior deepens, the opportunities for personalization become ever more precise and predictive. By utilizing AI and machine learning, targeted, relevant and timely individualized services can be delivered to subscribers at the right time over the right channel. This enables proactive and highly relevant marketing, confirming the service provider as a helpful and trusted partner in the eyes of the subscriber and ultimately strengthening the relationship.
3. The use of AI and data analytics can transform marketing activity, delivering detailed information around offer conversion rates, subscriber profiles, content usage and network activity to accurately create and place offers that are tailored to the individual. An increasing number of subscribers find it more convenient to manage their relationship with their service provider via the mobile channel and expect to experience a high standard of personalized interaction. To support this, the new DSPs are looking to combine AI analytics and machine learning with technologies such as software-defined networking, virtualization and automation to deliver excellent customer service while reducing costs and increasing revenue.
Smart, intuitive and efficient processes enhance customer satisfaction and can also achieve a reduction in DSP operating costs. This provides the opportunity for more investment to be targeted at product and service innovation, as the implementation of new technology must be built on a strong business case. With AI, the return on investment can be clearly measured. Consider these three real-world examples, all from Tier-1 service providers:
— In the first case, declining voice revenues in specific subscriber segments were reversed by utilizing an AI-powered predictive engine to determine which high-volume users would be following the downward trend in the near future. A targeted marketing campaign was executed to incentivize voice usage, with a resulting reduction in expected decline of 14 percent.
— Next up, one carrier was seeing — but not connecting — some 8 million ‘insufficient balance’ calls every day. These attempted calls were generating high network costs for the carrier, but no actual revenue. Using AI and predictive analytics, tailored offers were created that proactively delivered microcredits to zero-balance users, increasing transactions from just 50,000 per day to some 5 million per day over a 30-month period.
— In the third example, more than half a million of this service provider’s 7.5 million roaming subscribers were not actually using mobile data services when travelling. Using AI, highly targeted international roaming offers were presented when subscribers were about to travel outside their home territory, resulting in a $375 million revenue increase over just 12 months.
It’s clear that AI is delivering valuable results for those service providers who have recognized its potential — yet according to Gartner, only four percent of CIOs say that their organization has deployed AI. A substantial increase in deployments is on the way though, as 20 percent of them say they are experimenting with, or have short-term plans for AI.
More than 82 percent of CSPs see the digital transformation of their business as an immediate and critical objective. In concert with AI, this will help create arguably limitless monetization opportunities through the effective and targeted delivery of information and entertainment services: music and video on demand, financial services, advertising, and smart home and IoT-powered services and applications both in building and in-vehicle. Add in the many more that haven’t even been invented yet, and the potential is immense.
Dan Faulkner is VP and General Manager, Communications Service Providers at Nuance Communications.