|Drive Revenue and Retention|
|Edition: September 15, 2006 Edition|
|The prepaid segment is leading subscriber growth in the wireless market, but prepaid is notorious for low margins and high churn levels. Therefore, prepaid players - prepaid calling card and debit card providers, wireless carriers and the like - must find ways to contain costs, while driving revenues from their expanding subscriber base.|
Integrated Voice Response (IVR) is a natural choice for lowering costs. After all, today's sophisticated speech-based IVR systems can handle some 80% of customer inquiries. But customer self-service has evolved into much more than a cost reduction mechanism. Today, prepaid providers are increasingly transforming self-service channels such as the IVR into efficient sales & marketing vehicles to drive revenue and retention.
Capturing the Customer
So how does one leverage an IVR to drive sales? First of all, prepaid providers need to think about how their customers communicate with them. Is it via the Web? At retail? Through email? Some certainly communicate in these ways, and it's important that customers are able to keep those lines of communication. But statistics show the overwhelming majority of subscribers contact their prepaid provider by phone. According to J.D. Power and Associates' 2006 Wireless Customer Care Performance Study, 71% of subscribers contact carriers by phone, 25% through carriers' retail stores, and only 4% via the e-mail or Internet. That means calls into 611 - or customer care - are a critical customer touch point for prepaid providers to not only solve customer issues, but to drive sales.
Traditionally, wireless carriers have attempted to drive sales via traditional marketing techniques including national advertising, direct mail and promotional bill inserts. These techniques have proved to be largely ineffective, with direct mail and bill inserts typically achieving less than 0.5% attachment rates.
To achieve significant market and revenue growth, service providers need to rethink their marketing and sales strategy to exploit the most ubiquitous of devices - the cell phone. Carriers naturally have a wealth of information on subscribers. Demographics and other information are available within CRM systems, usage history is accessible through network monitoring, and purchase patterns are housed in billing systems. To improve market penetration, providers must develop micro segmentation strategies that leverage subscriber intelligence such as buyer demographics, usage history, and purchase patterns to provide tailored offers targeted to subscribers.
Carriers can use analytics to find clusters of behaviors or purchase patterns that define new segments. For example, subscribers purchasing basketball video highlights as well as accessing sports scores might be considered "sports enthusiasts". Further micro segmentation can be applied to correlate sports enthusiasts with their favorite teams based on geography or score-download history.
With this segmentation in mind, carriers can use their IVR to generate targeted service promotions to inbound callers. The advantage is that promotions can be driven in context - for example, by promoting unlimited directory services after a directory assistance call is made. Furthermore, with the right tools, cell phone-based promotions can be modified on-the-fly, and results data can be available immediately for timely analysis and tuning.
BeVocal's customer results show cell phone-based promotions achieve significantly higher conversion rates than traditional marketing methods. Leveraging handsets using speech and SMS as the promotion channel, providers can achieve attachment rates as high as 10-to-15% when intelligently targeted to the appropriate buyer segments.
Simplifying the Purchase
Once the offer is made, the fulfillment experience should cater to the customer's preferred method of doing business - and that means multi-channel support. New "mobile storefronts" give subscribers the choice of natural, conversational, speech-based purchasing and stand-alone WAP-based shopping applications. The purchase experience should be fast, consistent across mediums, and optimized for ease of use. A general rule of thumb is that the maximum attention span for a subscriber purchasing data services is 30 seconds. Therefore, providers need a seamless transition from a promotion-driven call-to-action, to fulfillment through a storefront purchasing platform, and then to self-service provisioning.
Optimally, the system should take advantage of the mobile handset's ability to support multiple channels of interaction to facilitate demand creation, purchase, and fulfillment. For example, a subscriber may receive an SMS call-to-action message promotion a new content offering, which in turn spawns a BREW/J2ME or xHTML application that allows him to browse the new content offerings and make his purchase, and culminates in using voice commands to interactively complete the fulfillment process. Multichannel interactions such as these will no doubt aid in the adoption of new premium services.
These services are certainly the wave of the future. iGillott Research forecasts that by 2009 - 40% of Average Revenue Per User (ARPU) will be from data and content instead of voice. These data services include everything from text messaging, ringtones and gaming to music/video clips and interactive entertainment.
As premium services become an increasingly important source of revenue, the carrier's business model changes to that of a distributor. Carriers must be able to quickly introduce new products and content or bundles into their subscriber base. They must be able to monitor which are doing well and with what segments. Based on that insight, carriers can use marketing awareness techniques to broaden reach, modify pricing, or change the offering. A well-designed mobile storefront can provide an easy way to begin selling new products quickly.
Growing premium services ARPU has become a critical component of carriers' revenue strategy; as their voice-related revenues decline, they must drive up premium services sales. There are many types of premium services offering varying degrees of growth and revenues and requiring portfolio management to enable a smooth transition and increasing revenue streams.
Successful providers need to upgrade their outward-facing marketing, sales, and support processes to drive revenues from these services: increasing market penetration through microsegmentation, using intelligent one-to-one marketing to increase demand and enhance education, providing intuitive automated shopping and fulfillment tools, restructuring their business around rapid deployment of new products, and leveraging self-service systems to support cost-effective customer care for low-priced services and content. With an improved customer experience and proactive marketing, wireless carriers can create a formula for greater customer loyalty and reduced churn.
Assaf Baciu is BeVocal's director of product management, responsible for defining revenue-generation services in a multichannel environment. BeVocal provides hosted customer self-serve solutions for carriers and call centers. Visit BeVocal online at www.bevocal.com.
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