RESEARCH REPORT
Empowering loyalty: How AI can transform CSPs’ B2C growth
5-MINUTE READ
January 6, 2025
In brief
- While communications service providers (CSPs) are among the most trusted providers for safeguarding data, this has not translated into customer loyalty or revenue growth.
- Most telcos are deprioritizing business-to-consumer (B2C), despite it contributing 70-90% of current industry revenue.
- Strategic deployment of AI can enable seamless customer experiences and unlock new opportunities for engagement and growth.
Reviving B2C: The role of AI in building loyalty
Why AI matters now
The B2C business of telcos faces significant challenges, with revenues growing just 0.6% over six years. Prioritization of B2C has slipped, ranking tenth among telco strategies. At the same time, demand for bandwidth-heavy services is surging, increasing pressure on CSPs to revitalize their approach to consumers.
The scaled use of AI by telcos could transform their B2C prospects. AI isn’t just a tool—it’s a transformation enabler. By analyzing customer behavior in real time, AI empowers CSPs to anticipate needs, deliver tailored solutions, and ensure seamless, omnichannel experiences.
The loyalty equation: trust, experience, and engagement
Loyalty is a foundation for telcos’ B2C growth. Our research highlights three components critical to customer loyalty:
- Trust: CSPs rank highly in consumer trust for data security, with 53% of broadband and 50% of wireless customers expressing high confidence in their providers.
- Experience: Telcos are not meeting expectations for seamless and personalized customer interactions.
- Engagement: Dynamic, proactive, and relevant services are essential to keeping customers connected and invested.
Consumers’ trust in CSPs to protect their data and privacy has given them a long-standing competitive advantage. However, analysis shows that only one-third of customers remain with their provider for over five years. Loyalty is not a consideration for telco customers, but AI offers the tools to rekindle that relationship and convert it into a value proposition.
AI serves a dual purpose when addressing customers’ immediate needs: first, direct consolidation of all available customer data to create a complete profile from sales to solutions. Second, an efficient and human-like automated interaction that can speed up the interaction process either by pre-empting certain cases before they happen and/or by helping live agents close out cases faster.
Case Study: Vodafone VOXI
Vodafone’s youth brand, VOXI Mobile, leveraged generative AI to revolutionize its customer service. The AI-driven conversational agent reduced response times, handled multiple queries seamlessly, and transitioned to human agents when necessary, significantly boosting customer satisfaction.
A holistic customer view, supported efficiently
Fragmented operations hinder CSPs from delivering cohesive customer experiences. AI-powered integration across marketing, sales, and service functions ensures consistency and a customer-first approach across all touchpoints. Customer frustrations highlight areas where CSPs must improve:
70%
report inconsistent service across channels.
55%
cite slow customer support.
48%
dislike repeating information across interactions.
AI serves a dual purpose when addressing customers’ immediate needs: first, direct consolidation of all available customer data to create a complete profile from sales to solutions. Second, an efficient and human-like automated interaction that can speed up the interaction process either by pre-empting certain cases before they happen and/or by helping live agents close out cases faster.
Consumers rank CSPs as the top choice for offering bundled digital services, with 62% of consumers showing preference towards wireless provider and 57% inclined towards home broadband provider for adjacent digital services, with significant interest in:
- Digital Entertainment (72%)
- Mobile Wallets (69%)
- Smart Home Solutions (57%)
Compared to other service providers, CSPs have the trust advantage to deliver these services, yet right now only 10% of customers are fully satisfied with their current offerings beyond connectivity. Telcos can leverage AI to make these bundled digital services, better, more personalized and more engaging. Integrating the customer’s digital life seamlessly with their pre-existing connections simplifies and streamlines their engagement, completing the loyalty equation.
The way forward: AI at the center of loyalty
Key Recommendations for CSPs
- Leverage AI to Personalize Experiences: Use real-time data and AI to predict and meet customer needs proactively.
- Expand Digital Ecosystems: Build trust-based bundled services that align with consumer lifestyles.
By putting AI at the core of their strategies, CSPs can move from being utility providers to trusted digital advisors, driving customer loyalty and unlocking sustainable B2C growth.