The New Wireless Point of Sale:
An Intelligent Approach to
Customer Segmentation
By Fierce WirelessJanuary 08, 2003
subscribe for free: www.fiercewireless.comGuest Comment: The New Wireless Point of Sale:
An Intelligent Approach to Customer Segmentation
Telespree's CEO Bill DeKay offers insight into how carriers can use advanced micro-segmentation practices to optimize new customer service revenues -- using wireless devices as point-of-sale tools.
Guest Comment: The New Wireless Point of Sale: An Intelligent Approach to Customer Segmentation
Telespree CEO Bill DeKay offers insight into how carriers can use advanced micro-segmentation practices to optimize new customer service revenues -- using wireless devices as point-of-sale tools.
Telespree CEO
Bill DeKayWhen it comes to customer acquisition and activation, wireless carriers have come a long way in the last decade. Wireless phones are sold in many venues, from discount retailers to high-end, carrier-owned stores. Wireless subscribers no longer have to wait hours to get their phones activated. And they have a wide variety of pricing plans from which to choose.
But, as any wireless carrier knows, the process is still less than perfect. It also remains highly expensive, often costing $300 to $400 to acquire a customer. In many retail locations, poorly trained salespeople sell consumers the wrong minute plan and fail to up-sell them on additional services. On the back end, operations support systems (OSS) are too rigid to capture and manipulate anything but basic customer information.
But in their efforts to rise above the limitations of current retail and back-end systems, wireless carriers have ignored the most obvious point-of-sale tool in their acquisition arsenals: The wireless devices themselves. In order to truly revolutionize the point-of-sale process, wireless carriers must insert intelligence into the acquisition and activation systems in their networks. Using this intelligence, carriers can then turn to wireless devices to automate and personalize the point of sale experience.
Using the wireless device as an intelligent point-of-sale tool gives carriers the ability to interact with the buyer on a more personalized level and offer service plans and features that best fit their lifestyle.
By providing off-the-shelf devices that intuitively guide consumers through the acquisition process at the point of purchase, carriers can optimize retail distribution by engaging the consumer in a more personalized experience while also reducing costs. Using the wireless device as an intelligent point-of-sale tool gives carriers the ability to interact with the buyer on a more personalized level and offer service plans and features that best fit their lifestyle. This is a brand reputation that can elicit strong customer loyalty, maximum service revenues, and repeat business.
Consider this scenario: A home improvement contractor walks into a major building supply company and buys a wireless phone. After hitting the "power" button, the contractor is prompted through a series of automated questions, during which the carrier collects all of the information necessary to activate the phone, including credit and rate plan information.
But before the individual's account is created in the carrier's OSS system, the carrier, through a network-based automated intelligent acquisition system, can leverage additional information about that user by tapping into the building supply company's existing customer database -- with permission, of course. The carrier can then tailor the service plan over to that user based on that information. For instance, if the contractor has a corporate account with the building supply company, the database may indicate that there are less than 10 employees in his company. The carrier could offer the contractor a special group minute deal that could cover all company employees. Or the automated, intelligent questioning process could be used to determine something as simple as whether the potential subscriber will use the phone for business or pleasure. If the subscriber answers "business," the carrier may extend an offer that allows the subscriber to push his or her Mobile Outlook messages to the wireless data phone for $4 extra per month.
All of this can take place without involving a poorly trained yet still highly expensive commissioned sales representative, or without tying up the resources of a call center representative at the cost of $1 per minute.
For consumers, based on information the user provided during the device-initiated account set up process, the carrier can instantly target a specific demographic segment with specialized offers: ring tones for a teen, family plans for a parent, overseas plans for frequent international callers, and new trial offers for any consumer micro-segment. Carriers could also form a migration bridge between prepaid and postpaid, by quickly credit validating a prepaid user and offering them a post-paid service alternative offer, all via the handset itself.
All of this can take place without involving a poorly trained yet still highly expensive commissioned sales representative, or without tying up the resources of a call center representative at the cost of $1 per minute.
The math is simple: Wireless carriers simply cannot afford to spend $80 or more to upsell a customer on an application that brings in only $4 in revenue per month. With intelligent acquisition, they no longer have to do so.
The idea of using intelligence to personalize the user experience is not a new one. Thanks to the Internet, companies can use intelligent agents to tap into databases and change responses to customers in real time based on this information.
The idea of using intelligence to personalize the user experience is not a new one. Thanks to the Internet, companies can use intelligent agents to tap into databases and change responses to customers in real time based on this information. Extending this concept to wireless, carriers can use auto-activating wireless devices to create an effective one-to-one customer engagement - without spending a fortune to do so. Inserting intelligence into the activation process enables carriers to use wireless devices as the point of sale to interact with the buyer on a more personalized level and thus offer targeted rate plans and features that best fit their lifestyle.
According to Cap Gemini, carriers spend anywhere from $14 to $100 simply to activate a new customer. This only represents the activation costs, not the money spent on total customer acquisition items such as retail commissions, call centers, and service offer promotions. By relying on wireless devices to add intelligence and automate the acquisition and activation process, wireless carriers can achieve savings of about 10 percent on their cost per gross add (CPGA), while also better serving customers using precise customer segmentation.
According to Cap Gemini, carriers spend anywhere from $14 to $100 simply to activate a new customer. This only represents the activation costs, not the money spent on total customer acquisition items such as retail commissions, call centers, and service offer promotions.
Relying on a wireless device as a combined point of sale and intelligent OSS portal increases flexibility for wireless carriers without requiring them to change their OSS back end, an expensive process that can take months. Best yet, it allows carriers to expand into new, diversified market segments and customize the user experience to maximize revenue without having to manually handhold each customer, an expensive proposition that carriers can no longer afford.
Highly targeted and effective customer acquisition systems, using advanced automation to learn about subscribers in real time and provide customized service offers -- all via the device through an intelligent acquisition system in their network -- launch a new era in wireless sales.
Bill DeKay is CEO of Telespree Communications.
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