GSM Prepaid - Gaining The Loyalty And Maximizing The Value Of The Anonymous Subscriber
by Maxwell H. Massaquoi2007-03-02 08:00:00 | Viewed 2901 times
Hassan Sesay, a resident of Freetown is a subscriber to mobile communications services and has been a subscriber for the last four years. This consumer is a prepaid subscriber 'through-and-through'. He is quick to tell you that he patronizes two separate network operators including one he has been with for all those four years. He has been a prepaid subscriber to the other operator the last 18 months.
However, for over a year now Mr. Sesay has grown accustomed to using mainly the services of the second operator and utilizing the SIM card and network of the first operator for mainly inbound calls.
Well, what is the primary reason for Mr. Sesay's shift in the last year? If you say price and affordability, you get it partially right.
There is more to it than pricing. Most importantly, the lack on the part of operators to provide consumers with incentives that drive customer loyalty could be the most significant reason for consumers' shifting ways. Also, the operators' marked inability to unlock and increase the value of the customer is another important reason for the widespread customer churn across the industry.
You cannot 'blind' yourself from the current price driven competition within our growing mobile communications market and the captivating effects it may have on certain segments of the market. However, price-only competitive strategy in this telecom sector may turnout to be a 'poison-pill' for an operator's ARPU - average revenue per user and churn strategy. In the last fifteen months, we are observing a decrease (albeit not significant but gradual and steady) in the average price per minute of use (MOU) mainly among the emerging players (players with less than 2 years of operations).
This can be directly connected to customer acquisition and retention efforts on the part of the operators or service providers. This is the 'bait' that probably hooked Mr. Sesay to the second operator, which has been his operator of choice or his first choice operator. Sooner, operators of this expanding market (in terms of potential or new subscribers) will realize that competing on price alone does not guarantee a continuous and profitable relationship with the customer.
In this market, we are already seeing symptoms of what I will call price saturation points. You can see some evidence of the operators actually paying attention to the cost of their products and services to the end-user. There is a push to move away from the 'one-size-fit-all' approach employed by the pioneers of our domestic mobile industry. The operators are actually introducing some structures around their pricing and service offerings, which we hope should lead the industry down the path of innovative pricing-plan structures. There is a rather light push across the industry to utilize Quality of Service - QoS or innovative service or product offerings to retain customers.
Nevertheless, if all the operators within the sector or segment (mobile) are using pricing as the main competitive weaponry in their ordinance depots, then, we are bound to continue to observe consumers hopping from one operator to any other operator that happens to move its pricing downward no matter the significance or duration of the new price structure.
The loyalty of the consumer (prepaid or to a certain extent postpaid) to any given operator can never be guaranteed for that operator in such an environment of price flopping.
Knowing the Customer Knowledge is the key to unearth the many problems we encounter in our daily lives. Our burgeoning and vibrant mobile communications market may be full of values that are yet to be unlocked. For operators in this market, acquiring, managing and utilizing prepaid end-user customer data and information could be the major key to unlock unknown and untapped customer (prepaid) values in the service provider-consumer chain. Assembling customer information and data in a structured way can provide the average operator with valuable knowledge (usage patterns, most frequently called numbers and areas, etc.) on the customer.
Customer Information Management - CIM is a customer-focus strategy that if employed effectively should enable an operator to establish or reestablish dialogue with any given customer on its network.
Unlike postpaid whereas the billing statement serves as a multi-faceted link (customer message delivery, marketing, sales, information, etc.) between the service provider and customer, prepaid as widely practiced in our market is deprived of such features or options.
Some of the operators may even lack the ability to acquire on a near real-time basis certain vital information (such as ARPU, profitability, etc.) on the customer. Across the board, operators may need to pull-up their sleeves and start the thankless job of contacting their customers the old fashion way (by phone) and establishing or reestablishing customer identities.
In Mr. Sesay's case, the SIM from the first operator was actually given to him by a relative that had used the number in the past. He owns that number outright (for our market) now by any measurement and the related operator does not have any information (personal) on this customer.
The CIM roadmap may mimic that of a well-defined business intelligence and data warehouse on 'diet' or a 'mini version' of that. It is solution-driven in that it involves technology creations. However, it is something that can be implemented or customized locally. The main focus of this approach is to profile the customer, analyze and report on the customer, establish a continuous communication link with the customer, and reward the customer. The CIM approach encompasses certain aspects of customer management approaches or tools (CLM - customer lifetime management and DSS - decision support systems).
The acceptance and successful implementation of this approach can foster a very fertile ground or environment for customer loyalty. In fact, for a mobile player that has a wireless intelligent network - WIN-enabled network environment for prepaid, this should be almost a 'cake-walk' with minimal level of effort required in carving and deploying a total solution. One piece of advice though, the operator must refrain from engaging its customer base en masse (one-shot-for-all). At the most, take the segment approach or at the least, take the individual route (mainly for the 'top-of-the-line' customers).
Making the Customer Loyal to you the Operator It really does not matter how ruined you will say the overall economic posture of our beloved Sierra Leone is today. Monies do move from place-to-place, point-to-point, person-to-person and from everywhere to the buoyant telecom sector. This market is no joke for any standard anywhere in the world and especially for the standards we had been accustomed to in the 1980s and 1990s.
The 'guarded attention' being directed from the sitting administration should attest to this fact.
Nevertheless, there has been no other time in the history of this country when a particular sector of the economy has demonstrated the significance or importance of consumers" choices.
The demonopolization of the telecom sector and the advent of the mobile segment have brought upon us a new paradigm shift (multi-choice, competition, and independent regulation and technology innovations).
The wooing of mobile users and potential users by operators is evident in the advertisement and promotion campaigns you see across the country. These campaigns may only carry significant weight in support of brand recognition rather than loyalty from the consumer.
Customer loyalty programs driven by the CIM approach may allow an operator to differentiate itself from the rest of the pack. These loyalty programs can be conducted along the lines of predefined market segments (e.g. youth, rural, elderly, heavy users, occasional users, business travelers, holidaymakers - 'JCs', etc.). I will go a step further to suggest 'target marketing' in trying to beef-up your loyalty program.
Accepted, should be retention-focused customer contact strategies that serve as touch points in the touch point deprived prepaid market. This should also serve as a formidable weapon in the fight against customer anonymity, a key reason for churn and network operator hopping in the prepaid base here in Sierra Leone.
In no shape and form am I suggesting that the operators lack innovation or creativity in service delivery to the customer. But, the market could do more in unlocking the value of the anonymous prepaid customer through more direct communication or dialogue with that customer. For example, each time a subscriber recharges his/her minutes, the operator could reintroduce its products and offerings to that user through a session-oriented mechanism such as USSD - unstructured supplementary services data.
A solid loyalty program backed by an innovative pricing-plan regime (multiple top-up and usage-propelled strategies) can also take an operator the distance in trying to foster loyalty and satisfaction within its customer base.
Conclusion In conclusion, I will suggest that operators must imbue their customer operations and organization as a whole with the requisite skills and tools for treating customers by value. They must eschew the 'trial and error' approach in managing their customer base and try to execute decisions based on quantitative facts and analysis. In a mobile communications market comprising over 90 percent prepaid, acquiring strategic information and knowledge on the customer should secure unfettered loyalty from the customer and position an operator to maximize the lifetime value of the customer.
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About the author
Maxwell H. Massaquoi wrote from Freetown, Sierra Leone. This article was first published in the 13th September 2006 edition of Concord Times, a Sierra Leonean newspaper.
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