The Dynamic Approach to Prepaid Customers
Customer attrition rates in the mobile communications sector have always been high. However, recent research from Strategy Analytics suggests that customer loyalty around the world has dropped to an all-time low, with the average customer changing provider every 27 months, more than twice as frequently as a decade ago. In a bid to reduce churn, operators need to ensure that the often fragile relationship with prepaid customers is as strong as possible.
If operators do manage to retain loyal customers they have the potential to dramatically drive revenues. Figures from the Strategy Analytics research suggest that it is cheaper to keep the same customer, and for many, slowing churn rates by a little as 1 per cent could add millions of pounds to the bottom line.
To address this challenge, operators should be looking to engage more closely with prepaid subscribers, and to offer a wider range of products. In the past, operators have had little or no user engagement, and limited product choice. Lacking the personal touch, customers are often quickly attracted to the lowest price offer they can find in a highly competitive market.
One way to change this is to deploy dynamic provisioning of SIM cards, which allows customers to spend more time making choices at first use. By giving customers more options, and creating a personalised service from the very off set of the relationship, operators are less likely to experience churn.
Working in this way also helps operators to improve their awareness of prepaid customers, as generally, operators retain minimal information about this customer group. Typically, operators glean customer information by looking at usage trends and patterns of behaviour, to try and establish the type of consumer they are dealing with. The trouble is that often, this data is used inaccurately, and the wrong assumptions are made about customers.
Using a dynamic provisioning approach, operators can create and maintain a dialogue with end-users. As a result, dynamic provisioning creates the perfect opportunity in which to build a better understanding of customers.
The approach works as a menu consisting of a series of questions is given to the user when the SIM is first switched on. Users are then given a list of available numbers to pick from, which can include a search for vanity or golden numbers – all factors which provide users with a more personalised experience.
The SIM is also connected to the operator’s network and linked to its IT infrastructure, so users gain access to a greater variety of numbers than a retailer would have on their site – increasing potential revenue opportunities. Working in this way, the handset dialogue can also be customised to support a tiered charging structure.
During the initial set up phase, there is the opportunity to add additional revenue, as value added services can be offered to new subscribers, providing the perfect opportunity to present extra features. Operators should consider extending the service and product offering which customers receive beyond first use. While the ‘golden moment’ to engage with the customer is during the set up phase, to maintain a strong relationship, operators should look to develop a lifelong partnership.
To do this, it is vital that when any additional service is offered to the customer, it is supported with exceptional customer service to drive up satisfaction levels. For example, the market for smartphones and browser-enabled devices like tablets is increasing every day, and as such, operators need to match their offering with the increasing sophistication of these mobile devices – customers expect the highest standard of service, in combination with the use of the most innovative technology.
As a result, it is critical that SIM provisioning solutions allow operators to be both device- and location-aware. Marketing messages need to be targeted, and suitable for delivery to a feature phone connected to a GPRS network, and equally, appropriate for an iPad connected to a mobile broadband network.
Indeed, the trick to retaining loyal customers is to ensure that each process is as easy as possible, and specific to a customer’s personal needs. Working in this way, operators can reduce churn and maintain a competitive edge. The development of dynamic provisioning solutions offers operators the opportunity to address these issues, whilst creating many new market opportunities.
Thad Dupper is chairman and CEO of Evolving Systems