Management Lessons for Growing Revenue

Adding incremental revenue to core products is imperative for expanding the revenue base, which can be achieved by adding value-added services that are relevant to the customer base. 

In a subscription environment of telecommunications world, these value-added services enhance customers’ connected world. This approach relies on providing customers with viable products that are in harmony with the core business offering. I have spoken about bundling but what makes it a successful strategy largely depends on management focus on the following:

1. Ideation (identify complementing products that enhance your core service experience)
2. Preparedness (invest in Operational capability and develop internal resources such that bundled products and/or services are integrated with the systems thereby enabling a seamless consumer-facing experience)
3. Selling (start thinking Big Data and customer analytics to understand and segment your customers for the products identified above; AND Sales Effectiveness to encourage sales channels and also monitor for "quality" customer acquisition)

Intuitive, yet the organizations often fail to implement all 3 at once. A coherent strategy with equal emphasis on "Ideation, Preparedness and Selling" will build a lasting skill-set within the organization and will invariably help build an excellent customer experience. These are the keys to sustaining growth and realizing the full potential of strategic shifts that markets demand.

What pays more – customer acquisition or customer retention?

This is not an “either/or” question, rather an attempt to raise an organization-wide awareness and debate on the topic, which appears to be mostly confined within the marketing organizations.

However, if I had to pick one, I'd say invest in nurturing the customers you already have. In my experience, organizations spend way too much on acquisition and tend to treat retention as secondary - as long as net keeps growing, the numbers will (likely) be met.

Why nurture the current customers? They have already made the choice, are paying your bills and stay because they like the service. However, as the customer base grows, there is often the challenge of scaling the infrastructure to continue to maintain the service levels. To keep the customers happy, you need to invest in systems and infrastructure that support the quality of service the customers expect. This may include IT systems, new talent, sales policies, user experience design, etc.; whatever is needed to keep up with the scale of growing customers and their expectations. 

If you can deliver the high standards of service consistently, you will be noticed. We probably offered perks and incentives to bring the new customers in, but with the quality service standards in place, we will continue to ensure that new customers don’t feel slighted, when the initial euphoria of signing-up and “honeymoon” period (free this and that for acquisition) is over.

Also, if you are considering product changes and/or new offerings to expand the services portfolio, the current customers can provide valuable market research insights, if approached in a right way. In addition, customers will start to trust the brand and, in turn, may reward you with buying your other products and services. That’s when we start to realize the full potential of our customer base and gain a greater share of their wallet. So, here are the top 5 reasons to nurture the current customers.

1. They are here and paying the bills
2. They can help improve your products and services
3. They will be more inclined to buy your other “value-added” services
4. They can provide precious market insights for your strategic programs
5. They are and/or will advocate your brand at no cost to you

The ROI of investing in systems to sustain high service standards, as promised in the marketing material, will quickly start to show. Growth will then not be a one-dimensional look into how well your acquisition efforts are performing.

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.

Decoding Online Consumer Experience

There is a plethora of literature on how to improve site design, conversion, engagement, etc., but there is something to be said about not ignoring the obvious and not repeating the mistakes of the past. Keeping it simple sometimes is “simply” avoiding the common mistakes!

Navigation – ease and appeal determine how well was the digital strategy executed, be it content, eCommerce or communication. Optimize your website to ensure all elements are covered. Bounce Rate and return frequency are good metrics to measure the effectiveness of your site navigation strategy.

Fewer Clicks – helping customers and stakeholders reach the goal fast is critical to achieving the desired results. This does require that goals for each site section and page are clearly defined, and in-line with the overall strategy. Website optimization for the desired goal(s) will help ensure that customers are not “bumped” around for more page views, while the conversion funnel gets deeper and deeper.

Search Efficiency – make it easy for the customers to search across your site. Up-sell and cross-sell opportunities and an urge to “over-educate” and “impress” your customers may come in the way of making the search and results more complicated than they ought to be. Conversion efficiency will be a direct indicator of how well is this working. I have been asked to show other products as a customer is going through the purchase cycle for product  X, so we can get their attention – my reaction is always that the best it will do is distract and the worst it will achieve is a lost sale.

Brand Communication – ensure a consistent brand experience across all customer touch points including, site, blog, community, social, sales and direct mail is a no-brainer, yet sometimes over-looked as organizations try and keep up with the evolving digital landscape.

Tracking and Reporting – make it focused around what a customer is doing on the site. Is the goal to drive engagement, e-commerce, education, etc.? Make sure the metrics are customer-centric.

I am proposing a common-sense approach to achieving desired results out of the online experience – set simple goals for each task and design the experience around that. It is easier than we often think, especially when we have to be burdened with conflicting brand and organizational asks!