Customer loyalty, personalisation and omnichannel to drive Telstra's T25 strategy

Australian telecommunications giant releases the blueprint for its T25 strategy focused on exceptional customer experience, future-proof technology, employee engagement and cost efficiencies

Andy Penn (Telstra)
Andy Penn (Telstra)

Telstra’s customer loyalty rewards program, Telstra Plus, will be scaled out into a full sales and marketing channel, while predictive analytics and omnichannel choice will become key mechanisms in personalised engagement under the new T25 strategy released by the telco today.

At an investor briefing, the ASX-listed company’s managing director, Andy Penn, announced a raft of new ambitions for the business including network and customer improvements, employees, shareholders and the community as part of a new T25 strategy. The fresh strategy comes in following conclusion of the current T22 transformation plan, commencing from July 2022.

Penn described the T25 plan as “a strategy for growth” and as one founded in the necessary improvements made by Telstra through its transformational T22 strategy.

Four strategic pillars have been outlined as driving T25: Exceptional customer experiences that can be counted on; leading network and technology solutions that deliver the future; sustained growth and value for shareholders; and becoming the preferred place to work.  

“T22 has been one of the largest, fastest and most ambitious transformations of a telco globally and today we are a vastly different company,” Penn said. “This means we are poised for growth as our society and economy increasingly digitises and we all work, study, transact and get our entertainment online. These fundamental shifts, together with T25, will underpin our future growth and shareholder value.”

To help drive focus on exceptional customer engagement, Penn flagged plans to establish a fully integrated channel experience so customers wanting telco, service, energy, tech equipment or integrated home solutions will be able to use the channel of their choice whenever they want to. Predictive analytics is therefore gaining importance as Telstra looks to made customer experiences more localised.

“Customers will be able to call us and speak to an Australian contact centre service rep or visit a local expert in our Telstra owned store network,” Penn claimed. “We will use technology, AI and analytics to provide customers a more personalised experience with products and services, and to predict and resolve issues before customers know they are happening.”

From a metrics perspective, Telstra is looking for the T25 strategy to boost employee NPS to greater than +40 per cent and service NPS by +25 by FY25. It’s also looking to reduce complaints by one-third by FY23 and by 50 per cent by FY25, as well as achieve a 90 per cent rating in support and engagement by that date.

In addition, the company has earmarked digitally active users increases as key, and said it wants to see up to 8.5m in FY25, up 2 million on current levels. Today, more than 70 per cent of service interactions are digital.

Differentiating on nbn and network experience is another focus, and Penn said Telstra planned to enhance the in-home customer experience through upgrades to the Telstra Smart Modem, Telstra TV, WiFi Doctor and other capabilities in its pipeline. Energy customers will also be provided with smart meters.

“We will get to a point where for more than 90 per cent of customer services they will only need to engage with us once and it is done – no more interactions – just once and done,” Penn said.

Also in the spotlight is Telstra Plus, which now has 3.5 million members. Under the T25 strategy, the loyalty program to be expanded into a full sales and marketing channel. On the cards are more rewards for services, tailored offers and value from redemptions, along with access to new experiences and way of earning points and offers.

Off the back of this, Telstra is looking to see three-fold growth in the value of redemptions and increase member engagement to 80 per cent.

“We will scale Telstra Plus to bring personalised offers that are not available anywhere else, so we reward and thank our customers and build it to rival the best rewards programs in Australia,” Penn continued.

“To do this, we will leverage our many relationships with Australia’s largest enterprises and partner with small businesses to create greater reach into local markets. It is a huge opportunity, and we are targeting 6 million Telstra Plus members by FY25, to make it one of the largest rewards programs in the country.”

Retail experiences are also expected to be advanced through use of augmented reality and virtual reality technology, expanded devices and accessories ranges, express checkout and click/call to collect, new store formats and kiosks, onsite repair and device management services and new services for SMBs in Telstra Business Technology Centres.

Read more: Telstra takes back retail store ownership in omnichannel customer service play

On the enterprise front, customers increasingly relying on telco products, edge computing, cybersecurity, cloud, AI and IoT products and services delivered and managed by Telstra Purple will be supported by greater industry alignment with technology service experts in specific industries, Penn said.

Alongside end-customer ambitions, Penn noted a number of ongoing network and technology innovations aligned to its strategic pillar of building future-proof solutions. These include extending the 5G network to 95 per cent of the population, with the expectation that 80 per cent of mobile traffic will be on this bandwidth by 2025. Even so, Telstra is also expanding 4G coverage to 100 per cent of its network as well.

For shareholders, the telco is hoping to deliver ROIC to around 8 per cent by FY23, along with mid-single digit underlying EBITDA and high-teen earnings per share CAGR from FY21 to FY25. This will be delivered through a further $500 million reduction in costs on top of the $2.7 billion committed to under the T22 strategy.

The last step in delivering cost efficiencies under the current strategy is restructuring Telstra with a new holding company and four key subsidiaries: Infra Co Fixed, Amplitel (Infra Co Towers), Telstra (ServeCo) and Telstra International.

Then there’s the employee and operational efficiency side of T25. Penn highlighted the positive impact of moving 17,000 Telstra employees to an agile way of working. Plans are now underway to expand BizDevOps approaches to better align operational and development teams. Telstra is also planning to have all key business applications using API-first architecture by 2025.

“Our digital-first mindset and agile ways of working will make us one of the most responsive and customer-focused telcos in the world,” Penn said. “Promoting flexibility and sustainable hybrid work is going to be critical to attract and retain the best talent. We will also continue investing in new skills and a workplace fit for the future, where technology, tools and work practices support our people to be engaged and productive regardless of where they choose to work.”

Sustainability forms part of the plan, and Telstra has set itself the goal of reduce absolute emissions and becoming the largest certified carbon neutral company in Australia.

“We will also continue our programs to address barriers stopping people going online particularly for regional and remote Australians, and to connect one million vulnerable customers and build digital skills for 500,000 Australians,” Penn added.  

CMO's first-ever State of CX Leadership survey is now open, and we’re looking for all those official and unofficial customer leaders and senior managers to complete the survey! This inaugural report is going to take a critical and important look into Australia’s CX leadership, from role and remits through to skills and prioritites.

We need all responses in by Monday 27th September 2021, so please complete our survey now!

You can also follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page


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