Beata Kovacs, Head of CRM at Deutsche Telekom, will be a featured speaker at Loyalty Expo Europe, which will be held Oct. 7-8 at The Tower, St. Katherine’s Way, London. Kovacs participated in a Q&A with Loyalty 360 and offered insights on a variety of topics, including her company’s loyalty initiatives, what factors influenced those initiatives, customer feedback, industry challenges, and loyalty philosophy.

Q: What kind of initiatives does Deutsche Telekom have in the area of CRM, CEM, loyalty, engagement, and social media -- and how have they been received by consumers?

Deutsche Telekom Europe is responsible for 14 National Companies across Europe, handling altogether 52 million customers. Customer experience and customer-centricity are our company's strategic pillars. Our target is to build up and maintain long-term customer relationships. In the various companies we have a wide variety of customer experience programs expressed either in even ATL communication as well as "just" organizational set-up and national strategies, loyalty programs (all kinds of points-based, award-based, integrated ones) and loyalty activities.

In Europe marketing, the CRM department has the task to find out strategic as well as operational tools and initiatives/ideas to support our companies in achieving development in the field of customer engagement. We are dedicated to know the customers and build our relationship on trust, fairness, and monitor all the pillars that are influencing customer satisfaction.

Q: How important is customer loyalty/engagement to Deutsche Telekom, and what priorities are placed in this area?

In the saturated telecommunications market with declining revenue and the markets with full flat tariffs, the only way to survive and remain profitable in the long run is to build customer loyalty to strengthen customer engagement. This is a very extensive program as well as changing/maintaining that special kind of mindset all over our companies: Customer is the key. In every transaction, we must consider what we know about the customer, who is the customer, what are the needs, how we can make his/her life easier, how we can have lean processes and communication that make him/her satisfied in the long run.

We use the building blocks of customer-centricity from our marketing/company strategy to serve this purpose and build profitable customer relationships. We believe that customer-centricity involves consistent, valuable, differentiated, and intentional measures.

Q: What factors influenced the development of these initiatives? Customer feedback, surveys, focus groups?

On one hand, our core brand value and brand attribute is to assure service excellence, and that only could be done via customer-centricity. We are conducting extensive research -- regular customer satisfaction surveys, loyalty programs/framework measurements, various surveys about the communication (from ATL through targeted SMS messaging) – and segmentation that is characterizing the customers as well as predictive analytics that are supporting targeted individual communication, treatment, and offering.

Q: How is Deutsche Telekom measuring success or failure of these programs?

DT has a special methodology that is used to measure the success of all kinds of loyalty programs and activities based on internal customer data. Naturally, we use customer satisfaction survey as well to have a view on the influencing factors, the trends, and our position compared to competitors.

Q: What is the biggest challenge you're seeking to solve?

In Europe there are many countries where offers are not differentiating factors any more because, more or less, all operators have the same price level with similar offers. We need to differentiate ourselves to the customers. We have to invent and introduce measures that are supporting us being the natural choice for the customer and not let them be influenced by short-term pricing advantages. In those countries where we have both mobile and fixed operations, we have to assure customers that the more services they have from our companies, the more benefits for them.

So differentiating factors, fair offers, keeping brand promises, and assuring long-term advantages for the customers are the most important fields of thinking at present.

Q: How do you define loyalty/engagement?

We define loyalty with more measures: internal measures are churn, customer tenure, and usage. Customer measures are customer satisfaction.

Q: How are you differentiating yourself from competitors?

Our most important strategic goals are service and innovation excellence, and customer experience. In every country we have to position ourselves in relation to our competitors, but express these values across Europe as well as in the U.S. We would like to be the first choice for our customers for connected life and work.

Q: How do you approach and assess a customer's lifetime value? And has this approach changed in the past five years?

Customer lifetime value for us has two sides: On one hand, we have a look at it from the customer's point of view. This is mainly done via segmentations, wide customer knowledge in order to react on the personal lifetime events of the customers as well as their characteristics as persons/households. This is expressed in offers, in loyalty programs, and partnerships that are supporting customers.

On the other hand, from the company point of view strategically we define it as our relationship with our customer, and operationally it’s defined from a churn prospect (offering/retention) point of view. Yes, it has changed significantly in the past five years -- it has become broader - not only having a look at customer contract tenures, but the whole length and potential of the relationship.

Q: Can too much customer data ever be a bad thing?

We have not experienced that problem so far. We try to find capabilities and tools that support the processing of the customer data, the analytics to turn it into actionable results and measures that could be used in our transactions in all customer facing fields. At DT we have a very high standard of customer data handling, permission, and consent management that supports us in all data-related activities and processing.

Q: Why do some companies struggle with connecting all of their customer data to achieve profitable and personalized results?

Because they are lacking the proper customer strategy and customer-centricity mindset.  If companies can’t identify the different measures targeting certain customer groups to make them happy and loyal, then their message will not be consistent. Hence, customers are confused, unsatisfied, and searching for somebody who is serving them properly to satisfy their needs.

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