Home References The Role of Dynamic Discounting In Customer Experience Management

According to Forrester research, 89 per cent of the telecom consumers are willing to switch service providers owing to a poor usage experience. With the increasing demands of the telecom customers, delivering the best customer experience strategy has become harder than it has ever been.

New age telecom customers have gained increasing control over how they choose and interact with their telecom service provider. Owing to this, customer experience tools such as dynamic discounting have emerged to ensure seamless customer experience.

What is dynamic discounting?

In telecom, dynamic discounting solutions allow the operators to increase their average revenue per user (ARPU) along with their overall revenue by adopting dynamic pricing strategies.

Dynamic discounting supports the enhancement of consumer experience management by entailing appropriate pricing for voice, SMS and data services that vary with change of utilization, location and time. The solution enables the telecom operators to strategically increase the voice, SMS and data consumption of subscribers. Alongside, it also enables the telecom operators to penetrate into the usage cycle of the consumer with specialized pricing and bonus algorithms.

Core Objectives of Dynamic Discounting:

  1. Cost utilization

Dynamic discounting significantly reduces subscriber churn and create long lasting subscriber loyalty. This solution gives operators the ability to price and promote their services dynamically based on cell load, location, time of day, subscriber type and subscriber activity. The solution will further optimize operator’s marketing costs by reducing the need for reactive churn prevention and win back efforts.

  1. Reduce Churn

Dynamic discounting is supported by powerful sophisticated analytic tools that measure network capacity utilization and model price and consumer demand. It allows the operators to optimally define tariffs proportionate to the network load. By offering tariff rates that encourage higher usage during slow periods and by enabling differentiated pricing based on usage data, operators maximize revenues, whilst shifting traffic load to non-peak hours driving utilization of under loaded cells, thereby saving on capex and opex.

  1. Increase affordability of services

Dynamic tariffs, as a result of dynamic discounting, will improve affordability of telecom services for the customers that lie in the base of pyramid segments. These are mostly those customers that belong to the target segment which conventionally uses the phone for outbound rather than inbound calls. With dynamic discounting solution the operators will also be able to experience reduced congestion at peak traffic times and improved service quality. Additionally, value-added-services can also be pushed under this to increase customer base.


What role do flexibility and other features of dynamic discounting play for customer experience management?

Dynamic discounting enables the telecom service providers to leverage their customer experience strategy as a catalyst of growth. Dynamic discounting solutions are designed in order to ensure a simple, transparent yet positive customer experience from the initial stage itself. The operators design effective try and buy telecom campaigns that link free trials with a sales conversion. The conversion relies majorly on the base of discounts or lower price variations on the basis of location, time and usage.   For example, an operator successfully carried out a data test campaign in order to allow people to experiment with their data usage and at the end of the billing cycle, they suggested the best plan for them on the basis of their usage pattern.

For telecom consumers, it is quite simple to get registered for any service- voice, SMS or data. They receive regular broadcast messages, which clearly state the steps to subscribe to services and the discount applicable at a particular time in that network. This allows the subscriber to track their usage and even follow the pattern of discounts increase or decrease.


While the strategic importance of positive customer experience is unquestioned in the telecommunications and cable industry these days, initiatives are often dominated by firefighting customers’ day-to-day frustrations and concerns – their “hassles”. But will this be enough to win tomorrow’s customers?

We believe that telecom and cable companies need to go beyond reducing customer hassles by creating benefits from product usage and satisfying emotional needs. Operators who aim to win (with) tomorrow’s customers need to exploit all these elements.

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