In Seizing the White Space, author Mark W. Johnson revisits great lost opportunities of the not-so-distant past: Kodak’s creation of digital photography and Xerox’s invention of the computer mouse, laser printer and graphical user interface. The innovators opted not to commercialize these breakthroughs, thinking them outside their mainstream business. So competitors did instead. The lesson: Hesitate to enter the unexplored “white space” beyond a core business model, and somebody else will – for you.
The white space for today’s mobile operators is the rapidly evolving prepaid sector. Whether service providers seize this opportunity depends on their willingness to embrace a new analytics-based business model that can help any carrier draw a sharp bead on the needs of their customers.
Like a pop-up target, recent change in the prepaid market has taken many by surprise. For years, in North America and Western Europe, prepaid mobile customers were stereotyped as high risk, low-end users, eligible for “basic service” only. Today’s prepaid market is diverse, spanning growing numbers of former contract subscribers who bring with them a different profile and set of demands.
The new prepaid customer can be a major user of high-margin mobile data applications, the fastest-growing and most lucrative segment in mobile. At the same time, they come with an ingrained sense of what constitutes the superior service experience – and it had better be great or they’ll flip to a new provider. Importantly, their numbers are about to gain velocity. Research from IDC projects that 48 million new customers will swell the ranks of prepaid customers by 2013, in sharp contrast to the dwindling single-digit growth numbers for consumer mobile business subscribers.
Given the potential rewards, keeping prepaid customers and for that matter, all customers happy, on-board and buying more is Job Number 1, but it’s getting tougher by the moment. Recent research by Convergys reveals the challenges mobile operators face and points to the need for game-changing business models more in sync with customer expectations for the service experience:
· Some two-thirds of customers complain about bad service experiences with their mobile service provider.
· Three out of 10 stop doing business with the company. This will grow exponentially as the prepaid segment grows and has choices for the same services across carriers.
· Only four percent of mobile customers are willing to give the company a second chance, versus 16 percent of customers in other industries that say they’ll reconsider doing business with a company.
Unfortunately, “basic service” analytics tools provide little insight on customers’ individual service needs. Operators need a more strategic approach: Advanced analytics that deliver a holistic view of the customer. The success of these proven solutions rests on four pillars:
1. Customer Analytics, which define the characteristics of each customer: who they are, what services they use, their payment history and overall value.
2. Satisfaction and Loyalty Analytics, which reveal customer satisfaction based on their experiences. When used in conjunction with predictive analytics, satisfaction and loyalty analytics gives providers real-time insights into individual preferences and responsiveness to actions taken by the carrier – invaluable data for boosting revenue through targeted cross-selling and up-selling.
3. Operational Analytics, which provide hard numbers on agent performance, call types and customer channel preferences, to ensure a cost-effective blend of live agent and automated care depending on each customer’s value.
4. Applied Analytics, which provide cross channel application of the aforementioned by putting the knowledge into action. In essence, using data to make consistent, high value decisions, at various “moment of truth” points in the customer lifecycle.
In the end, the cost of analytics is always less than maintaining the status quo. Mobile operators that build a new service model on the four pillars of analytics gain a better focus on the issues that matter most to customers, and more importantly allow them to take actions on them. Customer satisfaction, retention and profitability go up. Operational costs are countered by growth and profitability. All these benefits flow straight to the bottom line.
Mobile phones may be throwaway, but never customers. Today’s analytics leverage the unique needs and preferences of each customer to help companies seize the white space of unrealized revenue opportunity. Anything less is just white noise – lumping customers on a single frequency where all sound is identical. In the prepaid arena, companies that treat everyone the same may soon find themselves disposable – literally.
Ryan Pellet is vice president of global sales and services for Convergys Corporation. He can be reached at email@example.com.