Connected Home and Bundling for Telecom Providers

Content consumption across devices is pushing the boundaries of Internet and how providers manage bandwidth. File sharing, video streaming, always-on kind of experience puts pressure like never before on the current infrastructure. This applies to all cable, DSL, mobile and satellite internet providers. These organizations have to not only fight the price suppression on their Internet services, but also continue to grow revenue by offering value-added services. As Internet access marches towards being a commodity and consumers demand “unlimited access plans," research is starting to come out on how can companies engage with their customers and gain a greater share of their wallet.

This is where bandwidth providers need to think bundling of various services to offer “value” to a consumer, who is not only cost-conscious, but also, is consuming a variety of online products. My recent success with selling data, security, device management and voice bundles is the case in point. We have seen a two-fold increase in product penetration across these categories, upon introduction of bundle pricing and options. In addition, companies, such as, Comcast, Cox, Time Warner Cable, Dish Network, etc. are already offering some combinations of these bundles, along with their video offerings.

Premium technical care is another area that is finding a great appeal among customers across a wide spectrum of technology and geography. Consumers want safe online browsing, keep their devices in top gear and have someone ready to help when their connected home needs troubleshooting. I have successfully tested enhancing the value of Data plan, with Video (if applicable), online safety, device management, voice (VoIP) and technical support options. The gains in customer satisfaction and reduced churn will easily offset the pressures of providing more for less, when it comes to data services.

A recent study published by Pew Research mentions paid technical support and online health services as one of the top growth areas for consumer adoption. I am already seeing interest in the former, but how is the latter going to perform, remains to be tested. Access providers, in the meantime, could be exploring options through customer surveys and research that helps them build a brand and exploit the market, when primed.

Subscription Services – Unlimited Everything!

A recent consumer survey revealed interesting insights into customer expectations. Customers subscribing to a service plan preferred an unlimited plan as opposed to paying per use. Why do we like unlimited plans, even though they may cost more than we would have liked and provide for more than we need? 

There could be a lot of factors that determine this: peace of mind, high rates for pay-per-use, nature of service and consumption, affordability, etc. Or, in some cases, service provider's may have inadvertently created the "need" for the above factors to be relevant. From the latter's perspective, these plans often allow for easy management of customer expectations and accounts, support, data management, retention, etc. - all pertinent factors to consider when assessing the ROI models.

However, unlimited plans do tend to create (sometimes) unrealistic expectations among consumers and start to create undue pressure on service provider's resources and revenue. Needless to say there needs to be wider strategy to offset such pressure and create alternative/complementary revenue streams. The fact that each service has its unique requirements and customer need, we need to really look at the subscription business a bit creatively. 

Analyze the usage data to define various customer segments and create value plans that appeal to these segments – fairly obvious, right? However, it needs overt management approval and significant investments in data gathering, accuracy, regular customer feedback (surveys?), frequent usage analyses, industry feedback, back-end infrastructure, etc. Most importantly, organizations need to be flexible enough to stay ahead of the evolving customer need and sustain customer interest in the service. Add-on service options tend to help fill that gap and help increase customer longevity and retention. 

Adding incremental value to the core offering and managing customer expectations from the service are equally important, but value-added services enhance the core and add critical benefits through incremental revenue and customer loyalty. In markets served by "commodity type" services, it becomes even more relevant to differentiate ourselves from the competition and hence warrants enough incentive for the management to invest in providing services beyond the "unlimited" plans.