(MVENTUR DOWNLOAD) Mobile Data + Customer Experience + Research

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THE 3 THINGS CARRIERS NEED TO GET RIGHT NOW: MOBILE DATA + CUSTOMER EXPERIENCE + RESEARCH

The Optus CEO recently declared his company’s shift to “sustainable profit growth”, moving from “raw subscriber acquisition” to an emphasis on retaining and increasing revenues from existing customers.

Sustainable profitability means retaining existing customers and encouraging them to spend more money on mobile. Central to this proposition in the era of data is understanding why.

Monetizing the increase in data use means building a better customer experience around social context. Customers don’t consume data, they consume what data does for them. Understanding the motivations and drivers behind data usage will provide more solid foundations for pricing and marketing strategies.

Carriers need to upgrade their marketing strategies: without context-driven customer experience, data is simply a commodity. Competing on data volume and price will become a race to the bottom that operators will lose to new entrants wanting to establish a foothold in the market.

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(MVENTUR DOWNLOAD) Mobile Data + Customer Experience + Research

  1. 1. MVENTUR MEMO Q1 2013: CARRIERSTHE 3 THINGS CARRIERS NEED TO GET RIGHT NOW: MOBILEDATA, CUSTOMER EXPERIENCE AND RESEARCHThe Optus CEO recently declared his company’s shift to “sustainableprofit growth”, moving from “raw subscriber acquisition” to an emphasison retaining and increasing revenues from existing customers.Sustainable profitability means retaining existing customers andencouraging them to spend more money on mobile. Central to thisproposition in the era of data is understanding why.
  2. 2. THE 3 THINGS CARRIERS NEED TO GET RIGHT NOW: MOBILEDATA + CUSTOMER EXPERIENCE + RESEARCHThe Optus CEO recently declared his company’s shift to “sustainableprofit growth”, moving from “raw subscriber acquisition” to an emphasison retaining and increasing revenues from existing customers.Sustainable profitability means retaining existing customers andencouraging them to spend more money on mobile. Central to thisproposition in the era of data is understanding why.Monetizing the increase in data use means building a better customerexperience around social context. Customers don’t consume data, theyconsume what data does for them. Understanding the motivations anddrivers behind data usage will provide more solid foundations for pricingand marketing strategies.Carriers need to upgrade their marketing strategies: without context-driven customer experience, data is simply a commodity. Competing ondata volume and price will become a race to the bottom that operatorswill lose to new entrants wanting to establish a foothold in the market.THE 4 KEY BENEFITS OF ETHNOGRAPHIC RESEARCH ON DATAFOR CARRIERSThe best way to understand customer drivers is to research mobile datain context i.e. in the malls, street and homes (not focus groups andonline) where people actually use data. This ethnographic approachyields 4 key benefits for operators:1) Drive product development road map by identifying customer painpoints and usage profiles. Identify the quick wins that operators can fixto improve customer experience.Smartphone customers who experience between fewer problems withslow mobile web speeds spend an average of $11 more per month thanthose who experience considerable problems ($140 vs. $129,respectively). (source JD Power)2) Develop relevant marketing messages to help migrate the salesstrategy from being about selling commodities on price to being aboutselling the premium of social benefit.
  3. 3. Rohan Ganeson, MD of retail sales at Optus recently said of thecarrier’s intentions to ramp up retail investment that , “We wantinteractions with Optus to exceed expectations and the feedback, bothgood and bad, from our pilot stores will be invaluable in helping usshape the experience for the rest of the transformation”. Success at theFrontline will depend on arming the retail staff with the most competitiveinsights.3) Empower frontline and service employees with insight on howcustomers use/could use data and help them cross-sell other dataproducts in the operator portfolio.4) By identifying the power users and influencers, operators candedicate more resources to these key market makers. The power users(20% of the market) currently use 80% of data traffic, with top 1%generating 17% of traffic (source Cisco).All 4 benefits combine to create a better customer experience which inturn reduces customer attrition (churn), increases individual revenues(ARPU) and drives recommendation (NPS).WHERE TO START?Youth drive mobile trends.They are already at the forefront of change. Youth are both the heaviestusers of mobile internet and those with the greatest social need to makeoperator rollouts successful. Youth are the influencers. Technologies thatreach mass market adoption often filter through the youth market first(e.g. SMS, Facebook, Messenger). Not only do youth influence eachother but data from the 2013 Mobile Youth Report shows that they exerta significant influence over the adult market.Compared to adults, youth are more likely to use mobile internetservices like social networking (50% vs 12% for adults), photo sharing(38% vs 12%) and streaming videos (24% vs 5%) (source Gallup).Quantitative research into mobile data consumption patterns cannotreveal the offline scenarios in which youth use mobile internet. Mobilecarriers need qualitative research to step into the 3Hs (homes, hangoutsand hideouts). Actionable insights for marketing and innovation can onlybe achieved when we understand how and why youth use mobileinternet.
  4. 4. Operators should start developing their future customer propositions byemploying ethnographic research to understand how youth are usingdata today.WHAT SHOULD THE 3 OUTPUTS OF ETHNOGRAPHIC RESEARCHBE?The key outputs of ethnographic research should help operators identifywhich users and activities within mobile data are most conducive toprofitability (e.g. We found that 15% of SingTel customers now generate85% of the data traffic but not necessarily 85% of their profits).MobileYouth ethnographic research focuses on building operatorcustomer propositions around a solid context-driven customerexperience. The 3 deliverables of such research are:1) A gradation of young data users based on behavior and attitude asopposed to more traditional demographic segmentations.2) Pen profiles of key data users that identify both drivers and the offlinescenarios where they use data. How do pen profiles vary by usagescenario and handset? (e.g. NPS for mobile internet varies by handsetownership: Apple +49%, HTC +41%, Samsung +23%). Profilesproviders operators with a natural starting point by identifying youthmarket influencers.3) Reframing of app categories based on social context (e.g. arrangingmeetings, while watching TV, photo sharing) as opposed to traditionalformats (e.g. games, business, utility). Already 60% of youth use mobiledata to organize gatherings, and 45% of youth use mobile data to settlearguments (source Pew Research). These behaviors are more relevantto young people’s social lives and are unlikely to change as they enterthe adult world.POSITIVE CUSTOMER EXPERIENCE FOR DATA CREATES ABARRIER TO MARKET ENTRYIn an interview with Rutgers, Verizon CEO McAdam spoke of the earlydays the mobile industry where operators focused on monetizingnegative customer experiences (e.g. roaming charges, paid voicemailetc) but that left the door open to new players (such as VerizonWireless).
  5. 5. “It was a pretty ugly experience,” he said. “There was a good opportunityfor someone to come in and disrupt the environment – to consolidateand create scale.”Verizon successfully disrupted the environment by building its culturearound customer need as opposed to customer revenue maximization.As operators talk up the opportunity to maximize customer data revenuethrough pricing structures which by comparison to fixed line offerings arearchaic, they too expose themselves to external disruption. By contrast,focusing on the customer experience has enabled Verizon to maintainthe lowest churn and highest customer recommendation rates in theirmarket, despite rivals paying extensively for iPhone exclusivity.Today, operators need to re-engineer their cultures around the customerexperience of data and leverage ethnographic insights to guide theirstrategies.If operators fail to get data strategies right now they leave the door wideopen to profit erosion from new competitors such as Google who thrivein fixing broken technology experiences. As the handset industry haslearned, once they invite new players like Apple in, it’s impossible toregain their market position.By Graham BrownLead Consultant, MVentur
  6. 6. About MVenturMVentur is the world’s first youth mobile consultancy.We have 2 roles:1) Advisor to our clientsWe oversee marketing plans, act on advisory panels and consult ourclients. Find out more about our consultancy work.2) Commercial think tank for the mobile industryWe promote progressive marketing ideas that help mobile companies gobeyond advertising. Read more about our youth mobile opinion pieces.www.MVentur.com

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