Telecoms teaches other industries

Susana Schwartz
20 Oct 2011

Because of limitations in their charging and billing capabilities, companies outside of telecom tend to take a ‘one-size-fits-all’ approach to services and pricing. In order to stimulate customer consumption, deepen customer loyalty and drive recurring revenue streams, all industries can stand to learn from telecom’s fixed and mobile evolution – from simple subscription business models toward today’s increasingly personalized activity oriented approaches driven by real-time rating, charging and intelligence around customer usage, behaviors and preferences.

Naturally, all industries stand to benefit from building better customer relationships and creating recurring revenue streams that extend customer lifetime value. Whether in smart grids and utilities; cable, media and entertainment; defense; cable; retail; manufacturing; or automotive, TM Forum and its members recognize that all sectors have an opportunity to learn from the telecom industry and expedite their evolution from simple one-time transactions or subscription business models toward relationship-oriented business models built around customer activity, segmentation and personalization.

Whether bricks and mortar, virtual or digital, all companies have to think about how to drive longer-term relationships and stimulate more customer consumption if they are to survive and even thrive in increasingly deregulated, highly competitive commoditized markets. To engage customers and entice them to consume more, billing and charging capabilities have to evolve to accommodate people’s ever-changing usage patterns, circumstances, behaviors and preferences. Or, better yet, billing and charging should become strategic assets that actually drive people’s patterns and behaviors in new directions. As Google execs say, "to know what customers know," and perhaps to know it even before they do.

The problem is that most businesses are limited by charging engines and billing solutions that accommodate only three simplified price ‘levers’ – quantity based pricing, duration of a subscription and the product mix of the subscription.

Over time, being limited by those three levers leads to lower ARPU and disenchantment of profitable customers. “Companies have to accept that the concept of ‘cornering the market’ no longer exists; there’s no such thing as a single market. Just walk by the average store and see how many different styles of jeans there are - baggy, skinny, high-cut, low-cut; walk by an automobile dealership and notice the different styles of each model - sporty, minivan, hybrid, SUV. It’s all a microcosm of the personalization consumers are seeking in all facets of their lives,” says Kleavin Howatt, director of product management for TM Forum member, Transverse.

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