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Creating Customer Loyalty with Advanced Services

Loyal customers are the ambition of every company in business today, yet in many sectors—particularly communications services—they are seemingly very hard to come by.

For today’s operators and service providers, rolling out new, innovative offerings, which often are video-based and require all-IP networks, is the key to reducing churn and creating happy customers who stick around.

But, moving to an all-IP networks, necessary as that might be, is not without its cost—at least initially. To prevent that cost from being prohibitive, what’s needed are proven methods of controlling the negative impact of capital investments by optimizing returns.

In a recent episode of The Front Line with Ian Scales, Alcatel-Lucent said that optimizing return on capital investment means starting with a key assumption: usage is the new user. What does that mean in a practical sense?

“Success is all about delivering services at the highest profit per transported bit,” Scales explained.

That’s a challenge because any all-IP network deployment involves going through a costly transition phase, during which the new and the legacy networks both must be managed.

“To maintain quality of service, operators can’t just overhaul their entire network on Day One and transition over to it,” noted Chad Gibbons, head of Alcatel-Lucent’s Global Services Strategic Marketing division, in the Front Line video. “They’re going to have a couple different networks that need managed.”

One way to offset the initial cost of managing two networks is asking for more money from customers. That’s unlikely to drive loyalty, though.

Another methods is using non-linear cost transformation, which refers to reducing operating costs even more aggressively than capital spend.

Gibbons recommended two key strategies for reducing costs. One is to identify unused network capacity. That includes reducing network elements like switches and routers, saving floor space and energy costs. A second strategy is to reduce multi-vendor maintenance by consolidating to as few equipment-managing partners as possible.

Simultaneously, operators need to enhance their revenue. It helps to do a thorough analysis, leaving no stone unturned in the quest for ensuring all network elements are being utilized. This process helps uncover opportunities for deploying services that allow application content providers like Google and YouTube to increase the value of their services.

By using the cost-cutting and revenue-enhancing strategies discussed here, operators can achieve non-linear OPEX reductions of up to 30 percent while simultaneously focusing more effectively on services and customers, and maintaining quality of legacy operations.

“Through creative partnering and innovative risk sharing options, new managed services and outsourcing business model options provide the framework for creating a next generation enabled portfolio of services for consumers and enterprises ready for Telco 2.0; without compromising network performance, service quality and security,” Alcatel-Lucent noted in a recently-published white paper.

Originally posted at: http://next-generation-communications.tmcnet.com/topics/application-enablement/articles/145992-creating-customer-loyalty-with-advanced-services.htm

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