2 © Telkom | 2016

Tomorrow starts today

The Customer of the Future Is your business ready?

3© Telkom | Customer of the Future White Paper

Table of contents

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02

03

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Meet the Customer of the Future

Who are the millennials and what do they want?

Serving the Customer of the Future: is your Business Ready?

Telkom and BCX

05 Telkom’s Key Differentiators

4 © Telkom | 2016

5© Telkom | Customer of the Future White Paper

Gen Y

The ‘Millennial Generation’, also known as ‘Generation Y’ is broadly defined as people born between 1980 and 2000.

There are approximately 2 billion millennials globally, 87% of whom live in emerging markets 1.

As they enter the workforce and build their careers, millennials are fast becoming the number one source of global income, wealth and spending, positioning them at the heart of the economically active population.

This is a new generation that has different characteristics, different needs and a different set of values to those who came before it. Millennials interact with the world in a completely different way to their parents or grandparents. They are the ‘digital first’ generation and have grown up with computers, email, mobile phones, and the Internet, as an integral and accepted part of their everyday life. This has made them digitally savvy consumers, who want to do business the same way they live, surrounded by easy and efficient solutions. The rise of the millennial generation has caused major disruption in a number of industries as the millennial consumer redefines the way we live, work, play and consume.

1Generation Next: Millennial Primer - Bank of America - 2015

Gen Z

It should be noted that arriving on the heels of mil-lennials is the more recent ‘Generation Z’. These are individuals who were born post 2000 and are still somewhere between their infant and teenage years.

While this new generation shares many of the tech-focused characteristics of millennials, they are much more pronounced, as Gen Z is a digital native generation.

While millennials may still remember the early stages of the Internet and cellphones, Gen Z will not remember a time before the iPhone or Facebook.

01Meet the Customer of the Future

We are living in a world of unprecedented technological innovation. While it is impossible to know exactly what the future will look like, big businesses need to ensure that they keep pace with these changes, both now and into the future, or run the risk of becoming irrelevant. With digital technology being an integral part of the average millennial’s life, companies need to be able to do business with them on their level, or they will be left behind.

Millennials are the customers of the future.

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They are knowledge driven

Millennials are often seen as more sceptical compared to other generations. According to research only 19% of millennials believe that, generally speaking, people can be trusted 2. Because of this millennials are more likely to engage in ‘self-education’, using online tools to do thorough research into subjects of their choice.

They are socially and environmentally conscious

Millennials are more racially diverse and more inclusive than the generations that came before them. They are likely to support and spread the word about causes they care about and rally behind social issues3.

Millennials also consider the environment a major and pressing issue in today’s society and are more likely to be pro-renewable energy and sustainable development.

They are social

Millennials were the first generation to utilise and grow up with social media and are three times more likely to have their own blog or personal website than non-millennials4.

They have few qualms about sharing the intimate details of their life online and are adept at building online networks and communities around themselves and their interests.

2Generation Next: Millennial Primer - Bank of America - 20153Curalate - Marketing to Millennials - 20154Generation Next: Millennial Primer - Bank of America - 2015

02Who are the millennials and what do they want?

As with any generation, there are a number of generalised characteristics that have been attributed to millennials. While much of the talk about millennials is anecdotal and subject to clichés, contradictions and criticisms, some of the most widely agreed-upon characteristics that are shaping the millennial generation include:

They are always-on

Growing up with the Internet, computers, email and mobile phones has made millennials extremely competent when it comes to utilising technology to address their needs. They spend a lot of time online and on their phones and are always-on and always available. They live a fast-paced technology-enabled lifestyle, where every piece of information they need is at their fingertips.

They are multi-channel

Millennials demand a high level of stimulus in order to capture and retain their attention. They are comfortable multi-tasking and will often interact with multiple screens at once, for example watching TV and browsing on a smartphone at the same time. They have no problem being on more than one channel and can divide their attention between different screens concurrently.

7© Telkom | Customer of the Future White Paper

They are self-centric

Millennials are often seen as a more selfish generation and have been dubbed the ‘me generation’ and the ‘selfie generation’. This perception is partly driven by their tendency to share and curate every aspect of their lives on social media.

It is also seen in their heightened ambition and focus on personal success. Many millennials are actively pursuing careers while at the same time staying single for longer, delaying marriage and choosing to have children later than any previous generation.

Millennials in South Africa

While millennials are generally thought of as a global phenomenon, it is important to consider the unique aspects of South African millennials that may differentiate them from their international counterparts.

South African millennials have grown up in a world very different to the one their parents knew. They were either born in the final years of the apartheid regime, or in the post-apartheid era as part of the ‘born-free’ generation. While there are still many social and economic issues that have remained as a legacy of apartheid, the millennial generation in South Africa is living in a different world and do not see apartheid in the same light that their parents did.

Increased access to global media has contributed towards a trend of more culturally integrated values and viewpoints, creating a ‘one world culture’ that is shared by all millennials globally. This results in many South African millennials having more in common with their international counterparts than with their parents and grandparents.

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Millennials live in a world of constant and instant communication. If they send an email or social media message, they expect a near real-time response, and if they do not receive one, they will assume something is wrong.

This immediacy can make them less patient when interacting with a business and makes them less likely to choose traditional channels of contact such as a call centre, or going in to a branch, where there may be queues or long wait times.

Instead, millennials are more likely to choose digital forms of communication such as email, live chats, instant messaging, or social media platforms. This allows them to get an immediate response with the least amount of disruption.

Companies must therefore be willing and able to speak to the millennial customer at any time and any place. The business must be as ‘always-on’ as the consumer is and show its capability to field input and enquires across a range of channels and provide feedback and assistance in real time.

From Mobile-first to Mobile-only

Another important aspect of serving customers of the future, is being able to talk to them through their channel of choice.

Millennials are known to be a mobile-first generation, reaching for their smartphones as a primary contact point for their communication, research and transaction needs, and switching to another channel as the need arises (such as completing an online purchase through a desktop computer, or going into a store).

Within the millennial generation and with the Gen Z consumers who will follow them, there is a shift happening from mobile-first to mobile-only. As smartphones become more powerful and more ubiquitous, millennial consumers are expecting increasing functionality out of them.

The idea that a customer’s first and only contact with a company could be happening entirely through the smartphone interface is one that has emerged in recent years with the success of new, digital, app-driven businesses (for example Uber).

This trend is particularly important in South Africa, where traditional broadband connectivity does not have the same penetration as in the US or Europe, which means that mobile is often not just the default, but the only online channel available to many millennial consumers.

Many companies, however, still consider ‘mobility’ a siloed task for the IT or marketing department and are not looking at how to develop it as a complete customer channel for the business. Companies need to be asking themselves whether they can provide a fully end-to-end, mobile-only customer journey.

03Serving the Customer of the Future: is your Business Ready?

While one cannot predict the future, it is possible to prepare for it. With the pace of technological innovation only set to increase, companies need to be ready to serve a new digital-savvy consumer.

Customer-led Engagements

In the past, consumer engagement followed a linear framework that was pushed from the company to the customer. The millennial consumer, however, exists in an ecosystem of multidirectional engagement.

In the new digital reality, interactions with customers are no longer driven by the business. The interaction now occurs on the customer’s terms, through the customer’s channel of choice, at any time the customer wants. Millennial customers are always-on and expect their product and service providers to be the same. In short, it is a customer-led engagement not a business-led engagement.

The interaction between a business and its customers can no longer just be corporately defined. In order to serve the new generation of customers, businesses must develop a deeper understanding of what customers want. Millennials like to feel heard by the businesses they engage with and are quick to give feedback and offer product and service suggestions. They also want to know that their feedback has been seen, acknowledged and actioned in some way.

9© Telkom | Customer of the Future White Paper

Creating Trust

Millennials are less likely to trust a brand on face value and are less likely to consider advertising a trusted source for brand information and advice. Their purchasing choices are influenced by different factors when compared to older generations. Only 1% of millennials are particularly influenced by advertising, while as much as a third of them will consult a blog or online review before making a purchase5.

According to a BCG survey, while 61% of non-millennials would trust the advice of a testimonial provided by an expert on behalf of a brand, less than half of millennials trust expert advice. 6Instead, millennials reported that their purchasing decisions were more influenced by their friends, families and strangers.

Millennials turn to much wider networks for advice, and they trust their social networks and will turn to them for advice when looking for products and services. On average, a millennial’s purchasing decisions are influenced by five people, compared with three for boomers.

Millennials identify with brands more personally and emotionally than other generations and will use brands as a way of displaying their key values. For millennials, their brand choice says something about who they are.

Because of this, millennials are also more likely to do independent research on a brand or product to ensure that it aligns with their personal morals, beliefs or image. This can be an opportunity for brands to create a story around their product that engages the millennial and provides a positive association. It can also be a risk as millennials are more likely to turn on a brand that does not conform to their ideals.

For example, according to a recent survey, millennials have the highest spending rates with companies that exhibited sustainable qualities, compared to older generations, with 67% of millennials saying that they see their investment decisions as a way to express their social, political or environmental values7.

This can also be seen in a recent KPMG survey that requested 539 consumer company executives to identify their top priority in the coming year. According to the survey, millennial-aged executives were much less likely to be focused on top-line growth and much more on building consumer trust when compared to their older peers8.

In order to engage the millennial consumer, companies therefore need to be open, transparent and honest. Businesses must ensure that they create an authentic message and follow up on their promises. Any communication or action that a company puts out should hold up to consumer scrutiny to ensure that they are seen as trustworthy and ethical.5KPMG Consumer Currents - Millennial Mystery - 2015 6BCG - How Millennials Are Changing the Face of Marketing Forever - 20147Generation Next: Millennial Primer - Bank of America - 20158KPMG Consumer Currents - Millennial Mystery - 2015

Look Ahead

Most importantly, businesses must not become complacent. Just five years ago, many companies did not have a Facebook page, let alone a social media strategy. Two years ago no one was considering offering customer service through WhatsApp.

Millennial consumers will continue to define how they want to engage with companies, and the companies in turn must listen to customers and be able to talk to them in their channel of choice. No one can predict how the millennial customer will want to engage in three years’ time, but companies need to be able to embrace the change and adapt to it.

Actively listening to what millennial consumers want, and seeking active input from them, is the best way to serve the customer of the future.

10 © Telkom | 2016

Telkom Business has joined forces with Business Connexion to form a digital powerhouse. Together we can assist you to move your business into the future. Telkom Business and Business Connexion provide Africa’s only end-to-end digital solutions and have the power to take care of all your current and future customer needs.

Telkom and Business Connexion do not only provide the necessary tools for digital transformation but understand the importance of transforming in order to stay relevant to a new generation of customers.

Telkom and Business Connexion helps its customers build a foundation, based on strong technology offerings that will enable them to successfully develop a future business strategy designed to service the customer of the future.

Contact us today to book a digital readiness assessment. Visit www.telkom.co.za/bigbusiness

Telkom and Business Connexion

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11© Telkom | Customer of the Future White Paper

5. Telkom key differentiators

Largest, most reliable fixed

network

Leading POP Infrastructure

& backup

World-class Unified

Communication services

Best mobile data network in

South AfricaInnovation in M2M and POS

About 147,000km of fibre across South Africa

Hosted/virtual PBXs 98% population coverage in SA service provider to

include advanced M2M and PoS, complementingtraditional connectivity

Multiple redundancy, best availability and uptime in SA

Manage data network sites sites: 47,000+

Device management

2,643 mobile base stations constructedat 30 September 2015

Data Centre backup (9,700 squaremetres of hosting)

UC ready network (rich media capable)

Sites: LTE, 3G

Internet subs: 560,000+

Advanced UC with collaboration and telepresence

High data quality and speed with extensive LTE coverage

World-class network monitoring and management (24x7)

End-to-end SLA and network prioritisation

Application performance monitoring

Most extensive POP infrastructure – IP Net, Exchanges, Fibre distributionpoints, Internet POPs, Internet breakout, international investment in undersea cables

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Cloud and IT services

Converged Communications Wi-Fi hotspots

Network & application

performance management

Manage user-experience, networks and applications

Introduce Unified Communication platform and services

Provide all integrated IT, data centre and cloud services

Manage IT assetsin the data centre and cloud

Deliver QoS classes for applications

Hosted IP Contact Centre

11 Data Centres in South Africa. 3 x Tier IV design certified

ISO20000 certified for hosting

Full range of Cloud solutions (Public, Private, Hybrid) offering IaaS, PaaS and SaaS

Business requirement based IT solutions

Data Residency / Sovereignty

Faster time to market

Economies of scale

Service LevelAgreements

Campus Wi-Fi roll-out in customer locations

Free access to

Wi-Fi hotspots as part of Mobile data offer

13© Telkom | Customer of the Future White Paper

5. Telkom key differentiators

Leader in DataCentre Servicesin South Africa

Data Centre FacilitiesManagement and

Operations

Data Management Services Data Centre

Support ServicesCloud Platform

Support Services

BCX’s Tier IV designed-certified data centres are the benchmark for hosted information systems and applications

Mainframe Support Services

ICT InfrastructureManagement

Infrastructure as a service

Computing as a service

Cloud Infrastructure(Pvt Cloud and CSB)

BCX’s operational expertise combined with its management skills and experience in customer services enables the group to deliver data and facilities management ensuring a connected world at all times

ITSCM (Disaster Recovery)

Data Centre Operations (24/7 monitoring)

Data Centre Facilities Consultation

Data Centre Facilities Upgrades

Open Systems Support Services (UNIX, LINUX)

Media Management

Deployment

Data Centre Hosting (incl. Co-location)

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The largest ICTService Provider

to the South AfricanRetail Space

One of the largest Industrial Solutions capabilities on the

continent

Full BusinessConsulting Capabilities

Leader in ApplicationServices, Application

Development &Application Outsourcing

Application Servicesprovides trusted application development capabilities supported by defined methodologies to plan, design, and build quality applications.

Energy & Industrial Solutions provides an in-depth understanding of the industrial sector enables us to provide stable and reliable ICT environments that are effective and efficient, improving production, maintenance, quality and inventory, bridging the gap between factory floor and the boardroom.

BCX has the largest pool of Industrial Solutions Engineers amongst its competitors and peer Systems Integrators (SI’s) – total of 99 people

Accredited as an Eskom Energy Services Company (ESCo) which allows us to develop anddeploy technology that will conserve power within the commercial and industrial environments.

Application Outsourcing manages the full life cycle of application development and application management for Enterprise and Corporate Clients

Services are focussed on creating a mobile platform and presence for customers.

ICT Planning and Integration (IPI): Using planning frameworks and methodologies to ”architect” enterprise solutions; establishing EA centres of excellence and capability; aligning ICT to business; planning ICT strategies andunderlying systems

Risk and Service Management (RSM): Optimising ICT processes; managing ICT Governance; improving IT service management; ensuring business continuity; identity management

Business Consulting provides Business Advisory, ICT Planning and Integration, Risk and Service Management Services

Business Advisory Services (BAS): Improving business performance and measurement, realising IT value, understanding changing business and operating models and managing change

Africa’s largest Retail IT POS Maintenance Service Provider

Providing services to 8 of the 10 Top 100 Listed JSE Retailers and most of our customer contracts have been in place for >15 Years

Presence in 74 locations throughout Southern Africa

Mirrored support provided to > 180 Retail Stores in Ghana, Nigeria, DRC, Angola, Zambia, Malawi, Mozambique and Uganda

Full turnkey specialised services provided

Retail IT Infrastructure Break Fix Services including Desktop Support Services

Workshop Repair Services

Warehousing

Specialised Procurement – value added supplier (BBBEE)

Project Management

Research and Development

Cabling

Provider of business process and IT related services to companies that operate within the Retail Value Chain

Provides SAP oriented services, Postilion and JDA-related and business process optimisation services to large and medium size retail businesses

Specialist retail supply chain, merchandise and store expertise focused on process and system optimisation

Flexible, innovative and dynamic managed Private Cloud services for SAP and other business critical systems

Proactive management and improvement of service delivery underpinned by our dedicated command centre and optimisation team

15© Telkom | Customer of the Future White Paper

16 © Telkom | 2016

Glossary of Acronyms

063G – Third-generation wireless telephone technology

B2B – Business to Business

B2C – Business to Consumer

B2E – Business to Employee

BAS – Business Advisory Services

BCG – Boston Consulting Group

CSB – Cloud Services Brokerage

IaaS – Infrastructure as a Service

IT – Information Technology

ICT – Information and Communications Technology/ies

IM – Instant Messaging

IP – Internet Protocol

IPI –ICT Planning and Integration

JDA – Johannesburg Development Agency

JSE – Johannesburg Stock Exchange

M2M – Machine to Machine

PaaS – Product as a Service

PBXs – Private Branch Exchanges

PoP – Point of Presence

PoS – Point of Sale

QoS – Quality of Service

RSM – Risk Service Management

SaaS – Software as a Service

SAP – Systems, Applications and Products

SI – System Integration

SLA – Service Level Agreement

SMS – Short Message Service

UC – Unified Communications

17© Telkom | Customer of the Future White Paper

Telkom Business is a division of the Telkom Group organisation. We exist to serve the South African and African corporate; government and SME markets. Our passion is to seamlessly connect every business towards a digital future. Our solutions are offered end to end — ensuring that your business benefits from every economy of scale and superior service quality. Our solutions are customised by taking into consideration the role of the relevant technology trends; such as: fixed mobile convergence; mobility; machine to machine; big data; Wi-Fi; broadband; LAN; WAN; cloud computing; unified communications; digital and social media and others. Migrate your business into the digital future — contact Telkom Business today!

Business Connexion is one of the largest ICT services providers in Africa when measured in terms of turnover, assets under management and staff complement. It remains one of the leading South African cloud-based services providers with offices in South Africa, Namibia, Nigeria, Mozambique, Tanzania, Zambia, Kenya, Botswana, the United Kingdom and Dubai. The company employs more than 6 800 people on the African continent and generates revenue in excess of R6 billion a year.

For more information, please email tbsm@telkom.co.zawww.telkom.co.za/bigbusiness