By: Craig Palmer - Chief Executive Officer at VAS-X

Most telecommunications brands will have some version of a customer value management (CVM) tool. But often, it’s just a customer relationship management (CRM) solution with a few tweaks. While this isn’t a disaster, it does mean that these telcos are missing out on important opportunities to effectively segment, target, and personalise offers for their customers.

One of the key differences between a CRM and a CVM is that the former helps you manage and track customer interactions, while the latter is designed to help you maximise the value of each customer over the course of their relationship with your business. A good CVM tool must be able to do three things: access a wide range of data about your subscribers, process that data intelligently, and then create one-to-one, personalised subscriber campaigns/ offers based on the insights you’ve generated.

Here’s a simple example. Let’s imagine a customer gets a notification that their balance is low. This event is a data point that can be fed into a CVM tool and used to strategically target that customer. This could mean giving them a discount on data if they top up that day. But it’s not just about offering them some generic deal that is running that month. The true value of a CVM is in being able to uncover the insights behind the data.

In this example, our customer is a prepaid subscriber who has been with the network for a few years, who typically spends about R250 on data and voice bundles and who has a dual SIM device. But recent activity for this customer shows a drop in usage, which is often a signal that they may be exploring alternative providers. Armed with this knowledge and contextual awareness, the service provider can offer this subscriber the best possible offer in an effort to retain them. Rather than a client fitting into what you have on offer, true CVM is about the product evolving to meet each customer’s unique needs.

CVM tools to reduce customer churn

Most businesses are after longer-term relationships with their customers because the longer a customer supports your brand, the more money they’re going to spend with you. This is also true for telecoms operators. It’s not about how much a customer spent last week or that they bought a big bundle recently; operators are looking to capture the lifetime value of a subscriber. This is why it’s essential for telcos to understand why customer churn happens and put measures in place to prevent it.

Recent numbers show that South Africa’s mobile network operators produce around 180 million SIM cards each year, which is about three times the country’s population. These numbers are largely due to high churn rates in the mass market, where prepaid consumers are quick to switch between different networks so that they can take advantage of the best pricing and the latest offers. But it’s not only about price. Customers also move from one operator to another based on factors like the quality of network coverage and poor customer service. If you want to stream a big football game and the network is patchy or if you were double-charged and you’re struggling to get in touch with someone about a refund, this could drive you to jump ship.

Given these realities, operators that can predict when a customer is thinking about moving to another network based on their patterns of behaviour have a golden opportunity to deliver personalised offers and communication in an effort to prevent them from churning. 

While impressive deals and sales strategies might win customers, keeping them loyal to your brand is all about consistently delivering value. With the right CVM tool in place, brands can turn customer data into real-time, revenue-generating action. By making customer interactions more relevant, timely, and valuable, you’re not only improving satisfaction and engagement but you’re also building loyalty, which is the difference between winning and losing in a highly competitive market.