What do operators have to do to migrate prepaid clients?
Yesterday, I had a conf call with a collaborator who wanted to understand my point of view on how to support a national-wide mobile operator in Europe to boost the acquisition rates in the postpaid segment. When pursuing such an objective, there are different triggers that can be used (such as handset renewal, mobile broadband, hybrid service offering, etc) but one of my reccomendations was to leverage on the existing customer base and define a well-structured pre-to-post migration strategy.
If we consider that the consumer choice in the industry today seems to be shifting from the usual postpaid mobile services to the use of prepaid SIM cards, a mobile operator wishing to move prepaid clients into postpaid contracts should think on how to tackle the benefits and reasons why users prefer prepaid value propositions. Here are some of the reasons why many mobile users prefer using prepaid mobile services over postpaid services. Any mobile operator willing to move clients from one model to the other should prepare winning arguments to tackle them.
Ease of acquisition
Prepaid SIM cards with initial credit are readily available and can be bought off the shelf, making them more convenient for many people. When applying for a postpaid plan, you have to submit documents like billing statements and identification requirements since you will enter into a contract. This approach takes a longer time to process than simply purchasing prepaid cards. In fact, no processing is needed with the latter. Furthermore, many are not qualified to apply for a postpaid plan. Students, for example, who are under 18 years of age and are not legally permitted to enter into any type of contract, cannot apply for a postpaid plan. Others do not have bills in their names yet, too. All these reasons make prepaid calling card solutions the perfect choice for many
Postpaid plans are convenient since you do not have to worry about adding credits to your mobile phone. However, with prepaid cards, the convenience and ease of buying credits in gas stations and convenience stores makes relying on them virtually hassle free. To avoid running out of credit, reload your card when you want to before it runs out.
Prepaid cards are also great for businessmen and other people hoping to temporarily stay in a foreign country where roaming services from their provider are expensive or not available. If you plan to stay in US, for example, in two months, using a prepaid card would be convenient for you, allowing you to use and cut off mobile services anytime and anywhere you wish. You can even purchase a prepaid SIM card for USA in advance over the Internet while you are still in your country and have it delivered in your address in the US. This will allow you to instantly use your mobile phone as soon as you arrive without going to the service provider personally like you would to enroll in a postpaid plan.
Prepaid mobile solutions are also more flexible compared with postpaid solutions since your monthly usage is adjustable and depends on your budget for a particular period of time. There may be months where your mobile usage is less than other months, which makes it practical to use prepaid cards. Prepaid cards are also flexible since you can use them on public pay phones. That’s not true for postpaid mobile services.
Monitoring and control
Probably the best reason why many consumers use prepaid cards is because they allow better control of mobile usage. Post paid plans have fixed monthly bills that allow for limited mobile services depending on the plan. The risk of this service to unintentionally exceed the limit and requiring you to pay for more than expected. Prepaid mobile services, on the other hand, allow for better monitoring and control of your mobile services. Your usage will be controlled by the credit you have in your prepaid SIM. It will help you avoid the possibility of going beyond your monthly budget, because when your prepaid minutes are up, you cannot use your phone until you purchase more. This minimizes the risk of incurring debts.
Unlike postpaid plans, prepaid mobile services allow you to switch network providers anytime you want. There are no contracts and lock-ins that force you to remain in a network that you find unsatisfactory after a few months of use. You can terminate a postpaid plan, but you have to pay for termination charges and forfeit any deposits made to your plan upon application.
People have been seeing the benefits of using prepaid plans to suit their needs and to make mobile phone use more convenient. Unlike postpaid plans, prepaid mobile services have become a better solution for students, younger kids on a trip, and those who have no stable monthly income. It’s not an easy game to move these segments towards post paid plans, but it will be easy if you know what your clients need and what they like. In my next blog I’ll detail an interesting case explaining how did we face this challenge. Until then, enjoy the reading.