With more than 300 000 applications (‘apps’) available, the power balance between mobile operators and Silicon Valley appears to have shifted away from operators. But if we accept that content is king, then mobile operators have an opportunity to redress the power balance because distribution is queen. As operators control spectrum, they are the first point of contact for customer service.
We have proprietary data that shows the total apps experience – measured from the handset all the way to the apps server – is not what it should be. It is not the ‘five 9s’ service that customers have begun to expect from mobile services – for example, one major European operator is only getting a 65% ‘first time the user tried’ completion rate on apps. We also have data from operators showing that apps-related customer service calls are on the increase. This trend is set to grow with the explosion of smart phone users (especially first time users), substantially raising the costs of operators’ customer support services.
In an Analysys Mason survey of 1000 European and American consumers, 26% cited poor user experience as the main reason they were considering switching operator. This evidence clearly supports our belief that the complexity and difficulty of using apps results in consumers using apps less, which can lead to increased churn.
To increase apps usage and reduce churn, better apps integrity is required: a holistic approach that looks at the end-to-end experience, from the handset through the operator portal to the airtime and the apps server/apps owner is needed. This improved apps integrity ultimately sits in the hands of the operators, because they control the spectrum and because they are the first line of defence regarding the problems their customers are facing.
We believe market segmentation of apps users is one way to provide consumers with a better apps experience. This better experience focuses on promoting a manageable selection of preferred apps by market segment, alongside better training tools for each person the first time they use the app (which is when problems are most likely) and better support on the cluster of preferred apps.
We are already seeing some advanced operators concentrate on apps clusters for small businesses. Operators could expand this into the consumer segment – for example, by identifying the 30–50 apps that appeal to, for example, young, affluent office workers or stay-at-home mums. As apps are only going to become more important to consumer purchase, consumer loyalty and consumer churn decisions over the coming years, increasing facilitation of these apps will see upside revenue potential for operators and merchants alike.
Operators have the opportunity to retake measures of control back from Silicon Valley, and use their natural strengths regarding customer experience and customer intimacy. Operators should use their distribution strengths to help their customers make sense out of the 300 000 or more apps available, strengthening the customer/operator relationship, and allowing operators to use apps to both reduce churn and provide a path for upselling and revenue stimulation.