Main biz objectives for a prepaid revamping project.
We recently lost a project to assist a central European mobile operator in revamping their prepaid positioning/approach to the market and adjust its internal capabilities accordingly. Regardless the fact that we lost this opportunity (in my opinion because of our lack of brand compared the other two bidders – the manager assigned to this module by the winner is a well known friend of the past with at least 7 years of less experience than the principal we proposed), it’s key to analyze -and understand- why was this operator looking for this turn-around. It will not be the only case in the region and this movement should advise us on what to sell to other players in Eastern Europe.
A short brief of the telecom dynamics: The market has a mature mobile maturity with more than 13.4 million mobile subscribers and a mobile penetration of approximately 133%. Of these, approximately 50% are prepaid customers. There are four Mobile Network Operators (MNOs) and two of them have very similar positions in the market regarding subscribers and revenue market-share – There’s obviously a market leader in subscribers with 40.3%, while the 2nd has 39.4% and the 3rd a 20.3%. Despite having lost the top position in number of subscribers during 2008, the 2nd entrant still holds its leadership position in service revenues representing a share of 38.6%.
In such positioning, why should a well-established operator revamp their current prepaid approach? Simple. Having wrote a lot in this blog about this, and having detailed how to get a prepaid reward from the customer base, we could be detailing several reasons. Nevertheless we consider that the main objectives and considerations associated with this intention that are referred bellow:
- Combine short-, mid- & long-term results. Launching new tariffs is the first step. As such, the project’s objective is to have a short-term impact already for launch. But also it intends to deliver mid- to long-term change in the management of the prepaid activity.
- Impact externally and internally. The revamping effort is intended to have impacts both externally (new tariffs, channel optimizations, etc.) and internally (new tools and organization). The impact of this initiative in the market is meant to be profound; therefore, it calls for an equally profound change internally, in the way it is managed.
- Move from reactive to pro-active mode. A renewed focus at developing prepaid management requires acting on the present customer base and, therefore, to develop pro-active tools, processes and attitudes to increase and preserve the value of the customers. A reactive mode is adapted when the strategy is defensive. But the new prepaid agenda of the operator should now set onto a new, offensive mode.
- Revamp transversally. In several areas, the operator intends to revamp its operations across the Acquisition, Development and Retention processes. For example, channel management optimization influences both customer retention, as well as top-up stimulating or cross-selling. Similarly, key measurements and metrics need to be evaluated and redefined across the 3 processes, as well as for designing the organizational change and defining a new vision of customer value.
- Align marketing organization and tactics. The project calls for a revamping of the “tactical machines”. We understand this to be an ensemble of guidelines, plans and tools to steer operator’s teams and give them a renewed sense of direction and strategy. This also requires the specification of organizational change across, and between, teams – with the aim of ensuring consistency and efficiency of efforts across the customers’ life-cycle.
- Redefine customer value and its measurement. Beyond new tools and a new organization, we see a need to change the way customer value is defined, measured and used. This will require analytical work to identify the value of operator’s current prepaid customer base across the life-cycle and to build a new vision of the dynamics required to increase customer value over time.
- Re-evaluate distribution tactics. Mobile competition is won at channel level. Sales efficiency depends on many variables (i.e. channel mix, communication & training, logistics & inventory, after-sales processes, incentives, etc.) and that execution is a permanent challenge. A shift in the prepaid agenda is bound to have strong impacts on distribution tactics.
Incredibly interesting project. We all hope the operator to achieve the objectives defined.