Research Notes

It is necessary to have a serious CRM strategy to be successful on the mobile broadband market

When a mobile broadband provider markets and sells mobile broadband, it is important that they both have a short-term and long-term product- and pricing strategy. The short-term strategy should make it attractive for customers to supplement their existing broadband connection with a mobile broadband connection and likewise in the longer term one needs to contemplate what relationship and interaction there should be between the mobile broadband products and fixed line broadband products.
As we have described in new report “Successful Strategies in the Mobile Broadband Market“, that analyses in depth the changes currently happening on the mobile broadband market, it is important to remember that this market is not experiencing the same pressure from the mobile handset suppliers as the mobile market is. If you examine the mobile market compared to the mobile broadband market, the difference in the “devices” being used means that the two markets are developing very differently and that the sales and acquisition costs are very different on the two markets.
When you are working on your mobile broadband segmentation and pricing strategy, it is important to take this into account and additionally whether you have a fixed line broadband business to take care of that you can use to cross sell mobile products.
Mobile broadband is about converting broadband customers to mobile broadband customers – or alternatively to get them to supplement their existing broadband connection with a mobile broadband connection.
The optimal solution for a provider would be to get the customer to sign a 24 month postpaid contract. But we believe that segment will be limited in a growth phase and that an aggressive prepaid strategy will be a faster and more inexpensive method to acquire a large customer base.
The first thing a provider should decide is what prepaid and postpaid strategy they will use and how they are going to convert low value customers to high-value customers.
Regarding the distribution strategy, there are many different possibilities for selling mobile products. This can be by using retailers, direct sales via own consultants, online sales, cross selling to existing customers that have already been credit approved etc. By selling to existing customers one can easily reduce distribution costs, if customers purchase the mobile broadband connection directly from the provider in the same way as they are already purchasing their fixed line broadband connection.
When deciding what price to take for the dongle there are the following possibilities: charging full price and lower data traffic prices, offering extra services, subsidising dongles in return for higher data traffic prices, online versus offline prices -cheapest online.
For traffic pricing one can choose between various possibilities like tanking up online, tanking up offline, cheaper prices online; purchase a larger amount and get some free. It should be attractive to convert from being a prepaid customer to becoming a postpaid customer. Larger bandwidth and more traffic will result in higher prices. This development is very similar to what we are seeing today with the possibility of purchasing a small package with limited traffic at a low price and a larger package with medium or up to unlimited traffic for a higher price.
Additional services can be sold together with the mobile broadband connection. This could be services like: network QoS, we guarantee you a certain bandwidth, increased bandwidth, access to WiFi hotspots, Hosted exchange, roaming packages with cheaper roaming in selected countries, hosting bank/credit card details allowing automatic tanking up, using Messenger, using Skype, Micro payment on websites etc.
There is the possibility of bundling various services and thereby up-selling to customers. With the correct product strategy and a good CRM strategy, it will be possible to increase ARPU and to sell less interesting services to customers, or to put it more positively, introduce customers to new services that they may otherwise not have
We have thoroughly examined and analysed these – and many other issues – in our new report  “Successful Strategies on the Mobile Broadband Market“.The report is therefore an efficient tool for mobile broadband providers in their efforts to create and implement an optimal strategy.

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