Pricing wars are a seemingly constant threat to profitability for wireless operators. However, new research from Bain & Company and mobile network software company Vasona Networks finds that prioritizing customer quality-based upgrades can help companies break the cycle and achieve as much as a 30 percent improvement in customer usage experiences, resulting in higher capital efficiency.
According to the report, Getting Quality Returns from Investments in Mobile Networks, mobile operators that fail to consistently offer a superior customer-received usage experience (CRUX) are vulnerable to negative customer reviews and increased churn. The typical response of lowering prices to prevent customers from defecting to rivals may work in the short term. However, operators that invest in areas with the greatest impact on customer experience are better able to maintain or increase market share and pricing power. To achieve the best possible CRUX, forward-looking operators can use a new approach called quality on investment (QoI).
“We believe that telcos need to shift their current focus on network performance more towards the customer’s overall experience, which can give operators an edge while stretching existing investments further,” said Jeff Melton, a partner with Bain’s Customer Strategy & Marketing Practice. “This approach begins with rethinking network performance metrics to improve outcomes that customers value most.”
The report outlines a multi-step QoI methodology that creates a new paradigm for network monitoring, measurement and refinement to drive more impactful investment decisions. With this approach, operators can measurably improve service with each investment. To better address customer experience needs in real time, operators can implement cloud-based edge computing technology solutions that target customer-focused metrics.
“With granular measures of quality for different types of user sessions — video, browsing or background activities — it is now possible to assess each mobile cell and prioritize investments based on QoI,” said John Reister, vice president of marketing and product for Vasona Networks. “Then you can proactively manage the traffic to boost quality and get the most out of each investment.”
Link to report: http://www.bain.com/publications/articles/getting-quality-returns-from-investments-in-mobile-networks.aspx