Cash-cow services for cell phone users-Part I

by Kostandinos Papahatzis

As cell phones and the OpCo industry mature faster in some countries than they do in others, it becomes evident that there are markets with plenty of room to play pricing wars on airtime charges with competitors, and grow, whilst in others the game is nearly over; the battles change ground and continue in other areas. It is also known that the battles will be fought in services and products that will give more value to the end consumer. More or less, most mobile OpCos will face this challenge before the end of the decade. The question is whether each local cell phone industry is up to the challenge or not. A working strategy is to prepare a continuously growing portfolio of products and services to enhance the brand image and increase revenues. There are many channels available for exercising this strategy. We examine the voice services channel, i.e. IVR (Interactive Voice Response), which is one of the most mature in the phone industry, especially for mobile OpCos.IVR-based services exist for some time; initially they were used internally by mobile OpCos to enhance customer care provision and for other support roles. Gradually they were brought to surface, and cell phone users started to discover them in the form of news, sports and weather updates via four-digit numbers. Most of these were implemented internally by the mobile OpCos. Soon, more complex services appeared, like stock and currency exchange updates, with cell phone users calling to get he latest news on stock values; these were partially outsourced projects. At present there are hundreds of IVR services readily available for mobile OpCos to implement; third party content providers and service integrator companies come to agreements with mobile OpCos to offer good services with great content. So with more than plenty to choose from, it seems that offering killer services to bring buckets of revenue is too easy. This is not quite straight forward as it may appear.Offering a portfolio of products and services to cell phone users is like any other business; you set your targets, make your contacts, prepare your roadmap, launch your goodies, let cell phone users know about them, and follow up on your revenues to see if they match your forecasts. In this chain, a million things can go wrong, and most of the times the one thing that does go wrong is that you may well run out of time to make corrective maneuvers. So while the ends of the fiscal starts to appear in the horizon, you soon discover that there is hardly any room left to swing a cat, let alone make money from services that cell phone users are finally not interested in. So where does all this lead? As always, it is a matter of choice and careful planning with a few sprinkles of wisdom and experience.For IVR-based services, the initial choice will be on whether to expand on existing success stories, or add new services, so roadmap development is quite important. Experience has shown that it is better to capitalize on existing services that have proven to be success stories, rather than just adding new cell phone services on the roadmap. The final decision depends on how much is planned to be done, who is going to do it, and how much money is for spending. On a tight budget, just keep recycling and expanding your existing services. On a higher budget, new grounds can be tested but with caution. Let’s examine three scenarios: the first is for expanding existing cell phone services, the second is for implementing new cell phone services, and the third is for making low performers bring more money. On the first scenario there are two possibilities: first is to expand an existing IVR cell phone service further, and second (and often neglected) is to expand a service from a different channel (i.e. MMS) into IVR. For the first possibility, imagine ringtones. The OpCo who owns such a service should expand further; ringtones have grown to become different tribes: from the old monophonic sounds to polyphonic, based on human voices, sound effects, etc. Some countries OpCos have ringtones collections that exceed 10,000 different sound clips. A dedication cell phone service allowing users to send ringtones as a gift to others (subject to limitations) may be all that is needed to bring extra revenues. For the second possibility, imagine services that reside on channel that needs special cell phone capabilities to be accessed, like setting daily news and horoscope updates to arrive daily to cell phone users. If the setup mechanism is via a Wap portal or by sending commands to a four-digit number, e.g. sending an sms with the words ‘sign leo on’ to 2525, it may not be easy for everybody to make use of the service. By migrating it to IVR channel all that the cell phone user has to do is call a number and choose from a voice menu the daily update to arrive.The second scenario is the hardest because it involves risk and also because cash cow services are not easy to find nowadays. It is necessary to have knowledge of the OpCos subscriber base and what is needed most in terms of services, the kind of people who’s needs to satisfy. It usually ends up to the entertainment area because, well, everyone wants a bit of fun in their life. A good rule to follow is to think of a service that encompasses as many as possibly from the subscriber base in terms of cell phone compatibility; meaning that most of the people should have cell phones which are capable to use it, with no effort except calling a short number and navigate through a voice menu using key-pressing or voice commands. Experience has shown that the following services are great money makers, with little need for advertising as viral marketing is more or less enough:Music scanning: the cell phone owner listens to a song but does not know the title and the Artist; by calling a number and bringing the cell phone close to the music source (speaker) a scanning service will identify it for him/her and send back a short message with the information of the song. A company named Shazam is offering this very successfully in OpCos all over Europe.Calling tones: this is like ringtones but the cell phone user will actually not change the ringing sound of the cell phone but the calling sound the callers listen to when they call someone. It is technically more complicated to implement, a few companies in Europe are providing content and the application. Large OpCos like Vodafone already implement this as part of their service portfolio, and it has good success. The only risk is that someone who buys a calling tone, may not be as frequent buyer as someone who buys a ringtone, simply because people care less on what others listen to rather than what they listen themselves; so it may be one purchase every couple of months that make cell phone users count as active. It is good to bundle this service to a subscription-an ‘all you can eat’ option-so that they can change the calling tone more often. Music news: cell phone users call a number and listen to the top ten; this is a great service, but there are a few catches involving the payment of label rights and keeping the service up-to-date. There are more cash cows like adult-related services, but involve a higher risk depending on country and local restrictions. Finally the third scenario: how to revive existing services from the dead; the best way is to put them under one single calling number. For instance, imagine there are five services that can be accessed via five different short numbers. If one of the five services is doing really well, and the others are not, placing all other services under the number of the best performer and let cross selling do the magic, is a great solution proven to be working.

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