STOCKHOLM – Last week, Ericsson and the GSMA teamed up to offer members of the media a tour of Ericsson’s customer demonstration center at the company’s Kista headquarters addressing the work both parties are doing in support of the GSMA’s ‘Connected Living’ program.
While the day’s activities covered a lot of ground, the piece addressing the ways in which users are adopting the connected lifestyle today, and how operators are going to need to charge for it going forward deserve a deeper dive.
During his session, Michael Bjorn, head of research at the Ericsson Consumer Lab presented recent survey results that, admittedly, indicated some of the standard fare as to why people buy smartphones – to surf the web, check e-mail, use apps, etc. However, one of the more interesting results indicated that according to U.S. survey respondents, more than 15% indicated that they buy smartphones to help them “manage their lives better”. This signals a fundamental change in the way consumers are viewing mobile devices. Additionally, roughly 70% of respondents worldwide indicated that they want to mobilize routine transactions associates with things like loyalty cards, event tickets, commuter passes, and financial transactions.
The question then becomes, “How to do operators act on this information to generate new revenues?” Here’s where the Ericsson’s report provides several interesting insights.
The most appealing concepts offer control over costs, usage and plans. consumers today don’t understand exactly what they pay for and what experience they can expect. Instead of using terms like megabit and megabyte, operators should explain what different levels of service will enable users to do. — Ericsson’s Smarter Broadband Report
It is no secret that U.S. operators are struggling with the need to move subscribers off all-you-can-eat (AYCE) data plans, especially as LTE subscriptions ramp up. Moving subscribers off of AYCE plans will require a delicate touch for sure. Judging by the quote above, this touch will require providing customers with meaningful information on how their particular usage patterns would impact their bill under a non-AYCE pricing scheme.
However, while many consumers are used to the AYCE model, and will naturally resist attempts to take that away, there is hope. Ericsson’s study also pointed out that the number of unlimited services was a more important factor than the data cap to U.S. consumers surveyed.
Operators can offer unlimited use of the specific services that are most important to the user, alongside buckets for more experimental use, encouraging the formation of new habits. This requires operators to gain a deeper understanding of their users, what they want and what they are willing to pay. — Ericsson’s Smarter Broadband Report
So, if operators can supply customers with unlimited access to the handful of key apps that they use most, while then applying a metered approach to some up and coming and/or lesser used apps, then these operators could have the opportunity to deliver the core value that customers are looking for while opening up the possibility of growing revenues as new apps usage patterns emerge.
These quotes also underscore the need for operators to craft custom offerings. This speaks directly to some of the more advanced Customer Experience Management (CEM) capabilities that we’ve been hearing about for the past 18 months or so. If one of the fundamental advantages of advanced CEM solutions is to be able to target specific offerings to specific customers at specific times, then CEM also becomes a fundamental enabler of Connected Living.
To be sure, there is no shortage of CEM solutions available. However, effectively implementing these solutions to not only mine the appropriate customer data that will identify customized offerings, but also to deliver that customized experience seamlessly will be key.
Speaking at the CTIA Wireless show this past April, Ericsson’s Grant Lenahan summed it up nicely when he told RCR Wireless News that the key to serving customers in the future is,
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