THE ACCENDO CUSTOMER EXPERIENCE MANAGEMENT MODEL A WHITE PAPER

T

HE

A

CCENDO

C

USTOMER

E

XPERIENCE

M

ANAGEMENT

M

ODEL

By

Accendo Technologies

October 2004

The Accendo Customer Experience Management Model

to improved business performance. Today the tools employed by mobile network operators are not suited to providing the level of information they need to

understand and manage each customer’s service experience.

Accendo have developed a model that uses data gathered non-intrusively from an individual customer perspective to model their experience of the mobile network and their overall satisfaction level. Accendo’s Customer Experience Management (CEM) solution provides unique data to mobile network operators in real time to proactively manage their customers

Copyright © 2004 Accendo Technologies. All rights reserved. No portion of this document may be reproduced without prior written consent. The information and statistical data contained herein have been obtained from sources that we believe to be reliable, but are not warranted by us. We do not undertake to advise you as to any changes in the data or our views.

Introduction

Customer Experience Management (CEM) is gaining in popularity as mobile operators strive to maintain growth. Historically, growth has come from the addition of new customers, however the majority of operators now find that attracting new high value customers requires higher standards of differentiation across their product offering, value for money, service and image. In addition it is vital that operators retain their existing customers and grow ARPU by increasing their usage of existing services and adopting new additional revenue generating services.

Every time a mobile customer makes a call, receives a call, drops a call, has a ‘bad quality call’, sends an SMS, contacts a Customer Service Representative (CSR), they have an experience. This experience identifies the mobile operator and distinguishes it from all others. These experiences are critical in the relationship between the operator and its customers.

The goal of CEM is to build customer value by helping mobile

operators to manage those experiences and to ensure that they are positive for their customers.

The benefits of CEM to an operator are:

• Improved customer loyalty. • Differentiation from competition.

• Increased usage by existing customers. • Direct impact on perceived value and image.

The steps to adopting a CEM solution are:

1. Identify the key experiential drivers of Customer Satisfaction.

2. Define a measurement process for the selected drivers and identify the metrics that have a clear objective correlation with Customer Satisfaction. 3. Define the workflows and process integration

required to maximize the benefits.

4. Benchmark, monitor and actively manage the Customer Satisfaction indicators for the subscriber base.

In this paper, Accendo Technologies describe a model that

objectively represents the customer experience. The model forms the basis for the ACEcore solution. Once experiences have been quantified an operator can focus its investments on enhancing those experiences that are most important to the customer, from the customer’s perspective, not the organisation’s perspective or the network’s perspective.

• Section One discusses the concepts of Customer

Satisfaction, Customer Loyalty and the impact of Customer Experience.

• Section Two describes the Accendo model for predicting

Customer Satisfaction.

• Section Three summarises the findings.

Customer Experience and the basis for Accendo’s approach

The customer experience is key to building what is often called “emotional loyalty”. Experience is the ultimate value touch-point and is a primary influence on their future behaviour. A poor customer experience is a step to defection and damaging word of mouth, while a good one is likely to lead to retained business and active recommendations. Operators who build emotional

loyalty create a huge advantage over those who merely provide a useable service.

Customer Satisfaction is a function of what is delivered

(experience) and the expectation created by the operator and its competition.

There exists a clear link between customer satisfaction and

observed customer loyalty with the conclusion that only those who are ‘very satisfied’ display strong loyalty.

There also exists a direct link between customer satisfaction and incremental revenue. In other words, customers who are very satisfied with a carrier’s service, use the service more and provide good referrals to others.

In reality the distribution of customer’s within an average operator is likely to be similar to that shown in Figure 1.

15% 15%

Satisfied

Outraged Dazzled

Not necessarily looking but not necessarily loyal

Unhappy Pleased Actively looking

For alternatives

Very Loyal

Figure 1. Customer Feelings across Subscriber Base

The Accendo Technologies solution enables an operator to

operationally predict and manage Customer Satisfaction. Clearly, if an operator can accurately predict Customer Satisfaction and continuously focus on maintaining the population of “dazzled” customers and moving more customers further to the right, ARPU will improve.

Accendo Technologies ACEcore provides a CEM tool that enables an operator to objectively predict Customer Satisfaction based upon customers experience.

The role of Accendo Technologies ACEcore

The key characteristic of high value-add service is personalisation, the ability to understand individual customer’s experience and to use that information to effectively manage that customer and his value to the operator. Figure 2 demonstrates the concept.

Intimacy Personalisation Choice Preemptive Transparent QoS Rational Customer Satisfaction Customer intimacy Operator Driven Service Customer driven service Create excellent foundations

Truly excellent service, a powerful differentiator

Proactive, SLA driven,

raises the ‘average’ service level across a given group

Reactive, customer driven, little ownership Basic, expected, not a sustainable differentiator Quality And Conformance

Figure 2. Differentiation through CEM

That personalisation must be driven by the operator through its service offerings and its service. ACEcore provides this ability to an operator.

Assessing the attributes of the Model

Customer Acquisition

Brand & Product Sales Channels Contracts

Design and Features Coverage

Capacity (Service Access) Speech Quality Call Reliability Customer Care Customer Communication Billing Image Price and Value

Product Quality

Service Quality

Customer Satisfaction

Accendo Solution

Figure 3. Customer Satisfaction Model

The Accendo model (which is based upon the British Telecom SALAD model) is shown in Figure 3. At its core is the following set of primary Customer Satisfaction drivers:

1. Company Image including brand. 2. Value for money including price.

3. Product Quality including Call Quality. 4. Service Quality including Customer Care. Accendo Technologies focuses on Product Quality and Service

Quality as they are measurable in a repeatable, objective fashion

and in weighted contribution terms they account for between 50% and 70% of the overall contribution to Customer Satisfaction. The impact of Product Quality and Service Quality on Company Image and on the perception of Value for money creates additional

importance on the targeted primary drivers.1

1

“Call Quality has become one of the major reasons why customers churn” (J D Powers 2004). “In the US, 58% of mobile subscribers said they left a service provider because of poor network quality” (Wireless Services, Industry Outlook: October 2003). “Customer’s expectations and experiences including per call problems such as dropped calls and poor voice quality are driving the need for improved measurement metrics”(GAO, 2003).

Product Quality

Product Quality is measured in the Accendo model in terms of quality of service parameters2 _{QoS, and their computations are}

based on measurements that are made entirely from a customer’s perspective. Figure 4 shows the model for the quality of service parameters. Service Accessibility Service Accessibility Network Network Access Access Layer 1 Service Service Access Access Service Service Integrity Integrity Service Service Retainability Retainability Layer 2

Layer 3 TelephonyTelephony SMSSMS CSDCSD

…

…

Setup Time Setup Time Speech Quality Speech Quality Call Completion Call Completion Handovers Handovers

Probability that end customer can access the Service (Capacity Blocks) Setup Delay

Objective Speech Quality measuring end to end quality Probability that a call attempt is maintained. (Drops) Impact of handovers

Probability that Mobile Service Is offered to an end customer (Coverage)

Figure 4. QoS Parameter Model

The first layer is the Network Access layer that is a basic criteria for Network Service being offered to the customer. Typically this is an indicator of target network coverage.

The second layer contains three aspects, Service Access, Service Integrity and Service Retainability.

The different services (Telephony, SMS, Data Services, etc.) are located in the third layer. Their measures are the QoS parameters. Accendo Technology has focused initially on the Telephony service as it provides the greatest insight into customer experience and is also the key revenue generating service for the majority of

operators.

The ACEcore solution models and measures all of these Telephony Service QoS Parameters.

2 _{GSMA PRD IR.42 “Definition of Quality of Service parameters and their computation. Ver 3.2.1, Feb. 2003”.}

Telephony QoS Parameters - definitions

Service Accessibility – (Capacity)

Probability that a customer can access the Mobile Telephony Service when requested if it is offered by display of the network indicator on the Mobile Equipment. Traditionally, this has been referred to as Network Blocks and is an indicator of cell usage and efficiency. Capacity issues might be assumed to be on the decrease but as additional services are provided over the same infrastructure capacity issues remain important. Capacity issues are clear

dissatisfiers as the expectation of customers has been conditioned by landline use.

Setup Time

Indicates the time between sending of the complete address

information and receipt of call set-up notification. Long delays have a clear dissatisfying effect on customers.

Speech Quality

Indicates the quantification of the end-to-end speech transmission quality of the Mobile Telephony Service. The measure is based on a MOS scale and describes the opinion of the customer of voice transmission and it’s troubles (noise, distortion, echo, dropouts, one way etc.). Accendo’s solution provides scoring on the uplink, downlink and at the Mobile Equipment. All of this data is combined to provide a single end to end score. Speech Quality is potentially a key area of differentiation for operators and offers the operator an opportunity to address improvements in Customer Satisfaction.

Call Completion – (drops)

The probability that a successful call attempt is maintained for a predetermined time until it is intentionally released by A- or B-party. Traditionally this has been a Network centric measure based upon signaling termination codes, Accendo includes this traditional measure but also provides an option to measure ‘calls intentionally terminated due to extremely poor voice quality’. Dropped calls are a major cause of dissatisfaction, and have a significant impact on overall customer satisfaction.

Accendo Scoring Architecture

Figure 5 demonstrates the Accendo scoring architecture. The Probe actively monitors all signaling channels in order to identify relevant signaling events such as call starts, handovers and termination. The Probe also records failure events and associated reason codes. The ITU compliant P.SEAM (P.563) Accendo Mean Opinion Scoring algorithm (AMOS) is applied in parallel and returns a voice quality score at less than 10 second intervals for the duration of the call.

Probe monitors signaling and bearer in both directions, upstream and downstream3 _{and optionally at the handset.}

Post Processing Downstream Downstream (Handset) (Handset) Downstream Downstream (Post VQE) Upstream Upstream (Post EC) AMOS AMOS6 S intervals AMOS AMOS Score Score AMOS AMOS Score Score AMOS AMOS Score Score AMOS AMOS6 S intervals AMOS AMOS Score Score AMOS AMOS Score Score AMOS AMOS Score Score AMOS AMOS6 S intervals AMOS AMOS Score Score AMOS AMOS Score Score AMOS AMOS Score Score Real Time CPVQ A-CEI

CEI CSICSI

time

time

SS7

CCI

CCI INMD CCICCI

(Optional) SS7 INMD T=0 T=N-1 F(Voice Quality, Call Quality) (Optional) API Voice Quality Call Quality Call Quality Voice Quality Voice Quality Call Quality (A Interface Signalling) (A Interface Signalling)

Figure 5. Accendo Scoring Architecture

At call termination, the Customer Perceived Call Quality (CPCQ), algorithm is applied to produce a score for the entire call. The CPCQ combines the Telephony QoS (and other services if available) parameters to produce a per call, Customer Experience Indicator (CEI). The relative weighting of each contributor can be customized by the operator and can be tuned to the changing behaviour of the Network, customer or customer grouping. Thresholds and alarms can be set on any of the parameters. A complete record (or a reduced set) can be stored by the Manager on a per customer basis including all of the individual AMOS scores, all signaling events, all failure codes and all handset information if available. The CEI and its constituents can be used as a per call, per customer QoS record for the purposes of alarms, triggers, SLAs, network optimisation, planning, billing, customer care and targeted communication.

The CPCQ takes into account call duration, (short, medium and long), upstream, downstream and handset weightings and also a tunable recency weighting to take into account the tendency for people to remember the most recent events which has been shown to have up to a 20% quality rating impact on subjective MOS.

3

Uplink vs. Downlink possible sources of quality differences: • Battery power limitations on the uplink.

• Cell loading on the uplink. • Cell selection.

• Persistent interference in either direction. • Handset frequency response in either direction. • Noise immunity

• Presence of VQE equipment.

Once all of the various data sources have been mediated and stored, the Manager aggregates the data over time in order to predict a Customer Satisfaction Index for each subscriber in its database of call activity. The CSI provides an excellent indicator of network behaviour over time (at a cell level), customer satisfaction over time and trends for each. The CSI is available at an individual subscriber level and at a subscriber group level, such as enterprise or family, and as such is an ideal tool for the management of SLAs.

Service Quality

Customer Care is the key component of Service Quality and while billing and focused communication are contributors good Customer Care has been shown to have a huge influence on Customer

Satisfaction.

The way a customer feels about an operator will be affected by (among other items) the many interactions they have with the operator. Interactions can be at the level of hygiene (simple, no hassle delivery of the service similar to a land line), or delight at something better than I get elsewhere (- premium SLAs), or surprise (unexpected service).

Some interactions are more important than others, for example resolving an error is always more important than making one. Resolving errors prior to customers being impacted is of course the ideal. When problems do arise, having the data on hand to

empathise and provide a likely solution is an essential part of a good customer care process. Accendo provides the data that addresses both of these scenarios. ACEcore can help improve customer service offering through acknowledgement of customer problems (empathy) or by proactively dealing with the problem.

By default Accendo does not include the Customer Care weighting in the CSI calculation given that the choice of metric will normally be defined in conjunction with individual operators and will be a function of existing Customer Care processes and tools combined with selected combinations of triggers and events generated by the Product Quality parameters.

Customer Queries

As the first point of contact for most customers, Customer Service Representatives (CSRs) frequently need to answer inquiries of all types. Whatever the nature of the inquiry, the CSR needs to access key customer, product, and quality information in order to serve the customer quickly and effectively.

In the Manager component, any customer inquiry and/or trigger that is recorded and subsequently processed is referred to as a query.

A query that cannot be resolved immediately can be forwarded electronically to the carrier work force to effect resolution. Most queries are automatically forwarded to an appropriate work force in CRM, Performance Assurance or Service Quality.

Summary and Conclusions

Customer Satisfaction is a key leading indicator of Customer Loyalty. Customer loyalty is a critical factor in “wallet share”. The factors that most influence customer satisfaction are Product Quality and Service Quality. ACEcore provides the first fully integrated solution that objectively measures Product Quality and Service Quality and predicts Customer Satisfaction.

The benefits to an operator are clearly:

• Increased Customer Value • Improved Customer Retention • Greater Profitability

Accendo Technologies have created a unique solution that is based upon:

1. Individual customer experience on ALL calls.

2. Objective measurement tools i.e. no human involvement. 3. Independence from the technologies (GSM,CDMA,iDEN,3G). 4. Independence of the vocoders, channel coders and modulation. 5. Independence of the handsets

6. Customer perception rather than network performance. 7. Real conversations (transactions) rather than reference

samples.

8. Include every source of degradation including RF, echo, noise, interruptions, clipping, coding, filtering etc.

9. Easy to understand – it predicts how the customers will judge the quality of the network.

10. Repeatable metrics and indicators

11. Weighted drivers that can be individually tuned to the network, region or segment.

12. An individual Customer Satisfaction Index.

In addition ACEcore will:

13. Provide detailed Quality Records to the CSR enabling both proactive communication and focused responses to customer issues.

14. Create Customer Queries based on thresholds, triggers and alarms generated by the product itself.

Conclusions

• Customer Satisfaction is a key measure and it is

important for operators to exceed customer expectations in order to create a loyal and profitable “dazzled” customer base.

• Customer Satisfaction is a function of what is

delivered (experience) and the expectation created by

the operator and its competition.

• Product Quality and Service Quality are the two key drivers of Customer Satisfaction.

• The use of the model can demonstrate the links between

business investment and the payback through satisfaction and loyalty.

Appendix A: Voice Quality as a key differentiator

Accendo believe strongly in the value of monitoring all aspects of customer experience. We have focused on mobile telephony and its key service, voice as our first implementation because:

1. It remains the key revenue generating service for all operators.

2. It will continue to be the largest single revenue generating service for some time into the future even with the arrival of 3G.

3. In mature markets neither coverage nor call completion are considered as potential service differentiators.

4. Growth in data services will improve revenues but may have a negative impact on call quality as cell usage increases. Without question, Customer Expectation is increasing as it relates to the level of service and call quality they receive. And in

particular speech quality is increasingly seen as a major factor in customer perception of the service4_{. All customers recognise good}

quality and many customers are prepared to pay extra for good quality by:

• Talking more on the carrier’s network (i.e. increased call hold time).

• Land line substitution

• Reduction in early termination due to poor quality. Measuring speech quality is the first step towards improving speech quality, improving it will lead to increased CHT which will lead to increased revenue and profit.

The Accendo Service QoS parameters provide an holistic view of each and every call. But, we believe our ability to measure voice quality provides a unique advantage over the other parameters in that it provides the operator with a measure of call quality when the call completes normally. As, on average, over 98% of all calls do complete normally, it is clear that many operators are operating blind in relation to real end user experience of their service.

Accendo Technologies use MOS as it is widely recognised as the barometer of voice quality. But, additional measurements such as:

• Hybrid echo

• Acoustic echo and • Signal to noise ratio

are also valuable indicators of signal impairments all of which are included in the Accendo solution.

• 4 _{“One in four (24%) users would consider changing service providers if they could}

obtain better voice quality.” (Isurus Market Research & Consulting)

Web: www.accendo.ie Email: [email protected]