How helping customers spend less earns more

Tony Poulos/TM Forum
21 Feb 2013

As featured on TM Forum's Inside Revenue Management newsletter

Even though we continue to be overwhelmed by “bill shock” headlines over exorbitant data roaming charges, we shouldn’t forget the more common regular bill shock that many families face each month when their phone bills come in higher than expected. It’s very easy to point blame at someone after the event, but what are we doing as an industry to prevent it happening, and what will happen if we don’t start taking it very seriously?

Apart from the obvious bad press, the omnipresent fear of losing customers to churn should be a big concern to any operator. Keeping customers is a lot easier and cheaper than ‘acquiring’ them. One way of keeping the faith with customers, and helping prevent billing queries when amounts rise above expected values, is to monitor the plans customers are on and advise them if another plan is better suited to them.

A number of operators in the Asia region have been doing this for some time, usually on a quarterly basis, for their higher ARPU customers. The process involves re-pricing calls and data usage on different plans (off-network) to see which is most optimal for the customer and then making the recommendations to them. Although this may sound self-defeating in terms of the operator’s revenues, those that offer the service will tell you it promotes loyalty and that loyalty is the single-biggest driver of ARPU.

For many, the size of their user base, cost of extra hardware and licenses to cover the re-pricing and comparison exercise may not seem worth the effort. Any business case put to senior management will be questioned because there will be no apparent way to lure customers from other operators without access to their bills for analysis. All good reasons (for the shortsighted, that is).

It leaves the door open to a new breed of over-the-top (OTT) player, already making their presence felt in the US, that offers an independent bill assessment and comparison service that shows how to optimize existing plans to eliminate wastage.

An ABC report highlighted work done by Todd Dunphy, a former Verizon employee who co-founded the mobile phone analytics company Validas, which seeks to eliminate what it calls “wireless waste” -- unused data, minutes and texts for its customers.

Validas performs analysis of cellphone usage for large corporations and recently launched to provide the same service for free to consumers. According to Validas, 80% of Americans overspend on their monthly cell phone bill by an average of $200 a year.

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