Closer engagement: playing the customer loyalty card...
Bill Chard, vp Product Management at software solutions specialist Evolving Systems, looks at mobile stickiness and carrots.
Fuelled by a powerful combination of deregulation, intense competition and market saturation, churn rates for mobile operators are now approaching 40% in some countries in Western Europe. This is a particular problem for those operators with a high proportion of prepaid customers. As Declan Lonergan, Research VP, Yankee Group recently explained, “because prepaid customers can switch between providers relatively easily, prepaid churn rates are substantially higher than those for postpaid. For example, in Q2 2011, Orange France reported prepaid monthly churn of 4.3% compared to 1.3% among postpaid customers. These values are typical of most MNOs in the region.”
Today, operators increasingly need to prioritise reducing these rates and one of the most effective ways they can do this is by engaging more closely with prepaid subscribers and offering them a greater range of choice.
The traditional distribution/sales model for prepaid has little or no user engagement and little choice. With no product differentiation and no personal investment in the service, a customer is easily attracted by a lower price elsewhere.
Today, a new approach to the dynamic provisioning of SIM cards, allows customers to spend more time, making choices at first use. As a result, they have both a personalised service and some time invested in the relationship with the operator and they are therefore less likely to churn.
Operators can help customers personalise their services when they use a mobile device for the first time, allowing them to pick their own number, for example. A menu including a series of questions is presented to the user on the handset when the SIM is first switched on. This provides a list of available numbers and typically also includes a search for vanity or golden numbers, which match up with letters on the keypad and spell specific words. Also, because the system is in the operator’s network and linked to its IT infrastructure, users have access through their handset to a broader range of numbers than the retailer has available on-site.
To add to this approach, the handset dialogue can be customised to support a tiered charging structure. Operators can now monetise specific numbers more effectively. And the ability to offer potentially valuable vanity numbers to more users increases revenue potential still further.
The time of first use also presents a perfect opportunity to offer additional, value-added services to new subscribers. The same handset-based dialogue that supports number selection can be used to offer other services, from bundled voice tariffs for families to cheaper home-based calls, further boosting the incremental revenue opportunity.
Maintaining loyalty means offering more after users sign-up too. The ‘golden moment’ at first use is a great opportunity to engage with customers, but it is only part of the story. To effectively maintain the relationship, users need to continue offering new services over a much longer timeframe. The new SIM card provisioning methodology can help operators to continue to support offering more choice to customers in life too. In particular, this allows them to drive new sales opportunities and to upsell and cross-sell to long-term customers, all the time strengthening their customer relationships and further building customer loyalty.
In driving up customer satisfaction levels, it is also important that operators are able to match the user experience to the device used.
Today, with the emergence and ongoing success of mobile broadband fuelled by the availability of new kinds of connected device that connect with the wireless broadband network, the market dynamic is changing yet again. All of these devices contain SIM cards and offer operators an opportunity for engagement similar to that offered by traditional mobile handsets. The main point of distinction is that this engagement needs to be offered to devices with a wide range of different form factors.
It is critical here that the chosen SIM provisioning solution allows operators to be both device- and location-aware. There is a major difference between the kind of marketing message suitable for delivery to a feature phone connected to a GPRS network and that appropriate for a mobile broadband network connected iPad with a large colour screen.
A customer with a high-end device expects an activation experience to match. With the latest dynamic provisioning technology, the user experience when making choices and activating services is tailored according to the device being used: if it’s a simple phone, text-based menus can be used, if it has a browser, web-based interaction can be offered, if the browser is on a smartphone, the approach can be adjusted to suit a small screen browser.
Keeping the customer happy
All mobile operators should be concerned about reducing their levels of churn in order to remain competitive with their peers. By engaging closely with customers, making the process of SIM card activation and ongoing ownership as easy as possible for them and tailoring the service offered to their customer’s needs, operators will drive up loyalty levels; average revenue per user (ARPU) and ultimately too build competitive edge.