Updated on 16/01/2023

Improving telco engagement: an introduction

Social networks are a fundamental component of any effective digital marketing strategy, especially for companies in the TLC sector, because they focus on three key aspects: customer retention, company reputation and brand identity, all factors of competitive advantage.

Telecommunications is a particularly competitive sector.  On the one hand, digital innovation is continuous, and this requires telecommunication companies to constantly work to improve the technologies made available to users. On the other hand, customer expectations are constantly rising, setting ever higher standards for quality that challenge some companies to be able to proactively address those changes.

New competition from OTT (over the top) services that offer digital content and services directly through the internet with new freemium models have placed many traditional telcos in crisis when it comes to acquiring new users. So how can companies embrace the challenges to restart the sector?

Net of the more or less systemic reasons for the crisis in the telecommunications sector, we have already wondered in other articles what might be the right solutions to restart a strategic segment for the economy of the entire system – Country.


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Even social workers can play their part 

In this regard, changes are needed that involve various aspects of the sector, from transforming the core business, to regulatory interventions that are able to reconcile market evolutions with fair competition. In addition, an important role is also played by the ability of telecommunications companies to create a marketing strategy that is able to effectively exploit all the tools that the digital transformation provides.

Social platforms can play a key role in this respect. An article in the International Journal of Innovative Research and Development concerning the positive influence of social media marketing on the market performance of telecommunication companies provides an interesting perspective. Although the treatise focuses mainly on the situation in Africa, most of the conclusions are applicable in any geographical and economic context. In particular, the study points out that telco companies who have invested in IT and in digital development have made social a big part of their marketing strategy.

This is for one very clear reason: because social media has an enormous capacity to engage users. And engagement is a key component both for retaining existing customers and for reaching and acquiring new potential customers.

The benefits of high retention 

On closer inspection, retention is a key aspect of building a financially sustainable business.

This is all the more true for companies in the telecommunications sector where the degree of user volatility is high and where company reputation has lots of room for improvement. Suffice it to say that, in general, companies in the finance sector have a better reputation than those offering telecommunications services!

By the way, retaining existing customers is less expensive than acquiring new ones. According to some research, acquiring new customers can be up to five times more expensive than maintaining your existing customer base. A study by Frederick Reichheld for Bain & Company found that a 5% or more increase in the retention rate can lead to a 25% or more increase in profits.

Conversely, if you can reduce the number of customers lost by as little as 5%, you can expect profitability to increase from 25% to 125% (source: Biz30). On top of that, a 2% increase in retention corresponds to a cost reduction of about 10%. The increased profitability described above is linked to an aspect that represents an additional benefit of retention, namely that a more loyal and involved customer tends to buy 90% more frequently than a customer who does not feel involved with your company. In addition, a loyal customer tends to buy from the same brand and spend more than 60% on a single transaction, thus guaranteeing a unit profitability 23% higher than the average customer.

Incidentally, increasing the degree of retention can help telco companies stand out from the competition. Today, consumers are subject to a nearly endless amount of marketing messages, of which only a low percentage is actually effective. For this reason, we need to be able to increase the number of loyal customers. And this includes creating content that supports a high degree of consumer engagement, content that can be perceived as relevant and create a special “connection” with consumers. Social platforms are a useful tool to do this.

Between saying and doing is engagement 

So, how can you actually create loyalty with your customers and thus increase your ability to keep them connected to you? Because while it’s easy to list all the benefits of retention, it’s less easy to actually achieve it. Remember, retention and engagement often go together. And if this is true, the place where you can create engagement par excellence is on social networks.

Italian telcos have understood this connection by activating social channels such as Facebook and Instagram, according to a study published in the Journal of Open Innovation: Technology, Market, and Complexity, which analyzed the role of social media in promoting the so-called “customer involvement for service innovation.”

In particular, Telecom Italia and Vodafone have created different types of entertainment activities suitable for social media to connect with customers. For example, they use Facebook to pose lifestyle questions to users in order to strengthen the “one to one” relationship between company and consumer and consequently increase brand attachment.

Social media channels are not just a powerful touch point to reach possible customers with their marketing materials, they are also an important tool to improve the business. Vodafone, for example, has entered into a collaboration with Crowdtech to develop a Panel Community open to users where it collects information about how customers feel about various topics. Similarly, Tim has developed a User Experience Lab, a platform where users are asked to provide ideas for new services or to preview new products.

By involving customers, companies have access to a considerable amount of data and information that would otherwise be very difficult to obtain. They can then use this information to improve their products.


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The importance of customer service in the telecommunication industry to build a relationship with users

The last example gives us an opportunity for reflection to understand the importance of customer service in telecommunication industry. Involving users is an effective way to build a long-lasting relationship with users, which can bring several benefits to your business. Social media is an important tool for building this relationship because they allow companies to have closer and more direct contact with customers.

However, even once you have identified the channel, the “tool” to activate, the ways to increase engagement are different. One of these ways, for example, is to provide effective and efficient customer care. After all, it is well known that the better companies are able to respond to customers’ needs, the greater their satisfaction, which, among other things, guarantees a higher probability that consumers will remain “loyal” to the brand and not switch to the competition. 

According to research published by Forbes, low-quality customer service could cost businesses around $75 billion. This happens in a generalized way in both large and small companies and affects all types of economic activity, including telecommunications. This means that the problem is a cross-cutting one and that everyone has to face sooner or later. 

Having said that, what role can social partners play in providing better customer service?

On closer inspection, their role is absolutely key, given the benefits, they bring to consumers and businesses. They allow, for example, for companies to reduce the cost of call centers and at the same time improve the level of the customer experience, for example by enabling chatbots. In general, it appears that most customers are comfortable using social chats to activate customer service, as they are perceived as the fastest way to address and solve problems and get feedback from the company. Chat functionality is an especially convenient tool as it allows users to avoid having to open additional apps or use multiple devices to receive relevant communications. Finally, chats allow users to keep track of the information that is shared by the service provider who can, among other things, use the chat to resume contact with the customer.

There are also considerable economic savings for companies to use chat functionalityOn LivePerson, a “conversational commerce platform” operating in collaboration with Vodafone, chatbots enable telecommunications companies to save almost 48% when providing customer care services.

Another important advantage for telecommunications companies is that chatting significantly reduces the company’s reaction time, and this is crucial when it comes to customer service. In fact, customers tend to expect brands to respond immediately to their problems, and Facebook chats guarantee companies this reactivity, especially if artificial intelligence and machine learning systems are used, which are not only able to “learn” from users’ requests, but at a certain point, they may even be able to predict them.

And to top it all off, using social as a digital customer care tool allows companies to collect relevant information about customer behavior and key critical issues. This is also why many of the main telecommunication companies in Italy and around the world are monitoring their social pages, analyzing conversations and applying forecasting teams dedicated to these functions.


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Involving also means taking a position 

In closing, it is interesting to highlight a topic that will become increasingly relevant in the future. The importance of customer service in the telecommunication industry is clear, but also the role of social media is.

We have seen how social media is a tool for involving customers, which can be activated in different ways. Keeping customers connected to the brand is not so much what to do about socials, but how.

A report by We Are Social, the Think Forward Report 2020, says that companies who want to be relevant on the web must take a position, acquire their own voice, and their own communication space. In other words, it’s about communication

Social media channels will continue to be places where companies will go to publish engaging, fun, and easy to consume content.  Consumers expect clear positions from brands on the main social, economic, and ecological issues. This will allow customers to feel involved and connected to a brand.

This is expected to give rise to the most sincere and lasting involvement, capable of defining the character and identity of a company on the one hand and of mobilizing (and even polarizing) the discussion, the users and their opinions, on the other.

If until now socials have been a showcase, now you can imagine that they become a megaphone through which every company will really have to start making its voice heard.