Frequencies and technologies may not matter much in the scramble to capture the wireless consumer market. Instead, wireless carriers plan to compete in marketing and customer service.
“Everyone has a different edge or weakness” when it comes to price, coverage, technology and features, said Bukasa Tshilombo, of Northern Business Information Inc., New York. What makes the consumer sale is “how the package is put together,” he said. What will keep customers is customer service.
Quality issues
First class customer service means giving consumers control. Wireless carriers report existing and potential customers want simple rate plans and products that are easy to understand and can be used right away. They want to ask questions or update their bill anytime and at no cost. They want to know why their signal cut out during an important call yesterday at 3: 17 p.m. And they don’t want to pay for wrong number calls to their phone.
American Personal Communications was first to acknowledge customers don’t always want to commit to a one-year or two-year service contract. The option was one of many personal communications services firsts introduced by APC when it launched service last year in Washington, D.C. Anne Schelle, APC vice president of external affairs, said APC pioneered all-in-one paging and voice service and was first to offer customers the first minute on inbound calls for free. APC charges customers for the phone, veering from the popular free phone approach and fitting in with its no-contract marketing strategy.
“Those are new things the market obviously was ready for and that have made [APC] successful so far,” said Tshilombo. In the few months after APC launched, other players followed suit.
AT&T Wireless Services Inc.’s Digital PCS cellular service requires no long-term commitment. Nor does Sprint PCS or InterCel Inc.’s Powertel service. In Washington, D.C., Bell Atlantic Nynex Mobile offers the TalkAlong product without any long-term commitment and in all of its markets, EZ Max is offered without a service contract.
Churn
While no-contract service attracts customers, it leaves the door open to churn. But APC’s Schelle said churn has not been a problem, perhaps because customers must pay for the phone, which requires a more involved buying decision.
More than half of cellular customers who churned in 1995 dropped wireless service altogether and did not sign up with another carrier, said Economic and Management Consultants International Inc. The trend is likely a result of phone giveaways.
Many cellular and some PCS carriers, including APC, Sprint and Omnipoint Corp., use InfoCellular Inc.’s customer service and billing software. The company’s software allows retail salespeople to process transactions quickly, reducing customer acquisition time, which can help operators get off on the right foot with customers. The InfoCell OnCall software helps carriers with customer management and retention and performs other sales and inventory functions.
Keeping customers
Most carriers agree once a customer is on the network, it will be superior customer service that keeps them there. Customers want fast, round-the-clock access to real live customer service people, say carriers. Customers want representatives who are courteous, knowledgeable and willing to help with all aspects of service.
“A truly successful wireless company is one which can attract and retain customers,” said Ed McCabe, of American Management Systems, which produces billing and customer service software.
Step one in billing is producing information in a way customers understand. Immediate access to a copy of the bill and the ability to change service features or rate plans is necessary. Near real-time billing makes it possible for customers to know their current account balance at any time.
Bill consolidation is another goal of carriers in maintaining customers satisfaction. Too many bills are too much hassle.
Successful billing systems must address the needs of the customer support staff as well. For instance, leading billing systems offer point-and-click graphical interfaces, which are easy for the operator to use, and allow users to navigate quickly through a customer’s account data. McCabe noted it is necessary that billing programs allow carriers to “differentiate the guys who switch every year from those who use a lot of airtime-long-time customers.”
AMS recently introduced UniView, which links a carrier’s World Wide Web site to its back-end databases to provide key account and service information to small-and medium-sized business customers via the Internet.
UniView is “like banking at home with a PC. You get more control over financial affairs,” said McCabe. Users can review and make account changes online, continued McCabe. For instance, a user could turn off voice mail or take advantage of an advertised promotion for another calling feature. If a signal drops in a certain area, customers can communicate with a carrier’s engineer online. Again, the functions emphasize customer control. AMS noted Internet-based billing allows the company to exploit the channel as a marketing medium as well.
Customer control
AMS stresses the need for carriers to pool their databases nationwide. Carriers must have the “ability to look at a significant customer with a nationwide presence and provide them a single point of contact as well as a single bill that represents the totality of their purchase,” said McCabe.
AMS has designed billing platforms in conjunction with each of its clients. Information including current and previous invoices and payment history is a point and click away. Calling data, such as the most frequently called state, is readily available.
GTE Telecommunications Services Inc. emphasizes the importance of carriers responding quickly to customer requests. The company designed ChurnManager, a customer retention software program, to meet that need.
Powertel PCS spokesman Jim Murrell said some participants in focus groups who currently use cellular service said they would like to know how much they have “spent” in airtime at any given time, a capability they currently do not have. Roaming is another key component to billing, said Murrell. In Powertel’s research, cellular users reported that they felt a loss of control when roaming outside of their home territory. Cellular users indicated they hesitate to roam, are unsure of roaming rates and of their current account balance. They are “glad to have [their cellular phone] for safety reasons, but afraid to pick it up,” added Murrell.
Near real time billing was one of the key reasons Powertel chose LHS Communications Systems Inc.’s Business Support and Control System billing and customer care software program over other billing systems. BSCS allows users to access their current account balance. LHS’ BSCS is scalable and allows carriers to customize functions.
BSCS billing includes “telebilling” via the Internet and provides other business functions like accounting and tracking of sales transactions and inventory, said Atlanta-based LHS. Built on open architecture, BSCS allows carriers to integrate other systems like geographic information system mapping or interactive voice response.
Subscriber Computing Inc.’s Communications Resource Manager is an integrated system that handles billing, customer service and sales inventory and accounting functions.
Alltel Information Services, EDS, Danet and Cincinnati Bell Information Systems also are leading providers of billing and customer service systems.
“The focus of our attention, as providers of services in the communications industry, must be on improving our ability to identify, understand, respond to and even anticipate the needs of our customers,” said CBIS President and Chief Executive Officer James Orr, in a presentation at the World Billi
ng Forum in Paris last month. “What used to be thought of as `back end’ or back office operations will become much mor
e strategically important as weapons used on the front line in the new competitive battles.”
In a recent Yankee Group white paper, the firm said some cellular players that added PCS licenses, like AT&T, are working with the same suppliers for PCS and face a challenge integrating new systems. “That’s why the overall system migration is occurring simultaneously,” said the report.
“Carriers that emphasize buildout and put IT (information technology) support systems on the back burner will be at a competitive disadvantage,” noted the Yankee Group, Boston.
Marketing
“Marketing is the whole game,” said Powertel’s Murrell.
Along with billing and customer service, marketing is one of a carrier’s main business functions. Much money is invested in consumer advertising to achieve brand recognition.
In a recent study on distribution channels, IDC/Link Services of Austin, Texas, forecast the cellular and PCS carriers that succeed will be those with “good coverage, excellent brand equity, and appropriately designed, bundled packages distributed to the right type of customer through the appropriate distribution channel.”
Most marketing campaigns stress how easy the phone is to use, as well as simple pricing and billing structures. Wireless carriers are trying to undo the confusion many of them created by offering a free phone and a dozen pricing plans, each with a different set of monthly and daily fees, as well as peak and off- peak airtime rates.
The new push is the box product, which offers the phone and a few added features, like voice mail or paging functionality, for a few hundred dollars. The package specifies a monthly fee, which usually includes a predetermined amount of airtime. As a tangible product, with the features and costs spelled out, the buying process is less complex and less intimidating. Over-the-air activation is becoming standard, which means customers can minimize their time at the store and activate toll-free from home.
NBI’s Tshilombo said it is important for a carrier to differentiate itself in the market beyond factors of its technology, or price or coverage. For instance, he said, “AT&T Wireless is providing a one-stop shop,” which includes paging, wireless voice, long-distance and local services.
“The spirit of PCS … was about creating more choice for consumers,” said Sprint PCS spokesman Tom Murphy. He said the company will offer many market advantages. Murphy said call clarity via Code Division Multiple Access technology is superior and will be a major point of difference from other operators. “For the consumer it is an issue of quality and service, how the call comes through to you loud and clear,” added Murphy.
The company won licenses covering 190 million pops. “No matter where you are in our footprint, all the features are the same,” he added.
Sprint PCS is deploying CDMA technology nationwide and plans to offer commercial service in 15 to 20 markets by the end of the year.
“The way we segmented our markets is really based on listening to what the customers like and don’t like about the choices that are out there to date,” said Powertel’s Murrell.
The company is offering all of its 180,000-square-foot licensed territory as a home calling area, which is contiguous across 10 southeastern states, according to Murrell.
In retail stores, Powertel is selling box phone packages for between $160 and $240, depending on the phone model, with monthly service cost at $20. The price includes a PCS phone/pager in one and voice mail. The company is using Global System for Mobile communications technology.
What Murrell calls Powertel’s “value proposition” is 100 free minutes per month in the home territory, the first minute of inbound calls free of charge, standard caller ID, long battery life, over-the-air activation, call security and built-in authentication fraud technology.
The Westpoint, Ga.-based company also is offering long-distance calling for 10 cents and 15 cents per minute, in the home and roaming areas, respectively.
Powertel’s initial advertising, which will launch in a week or so, aims to build image and brand recognition. The company’s rollout strategy is based on a soft-launch concept, explained Murrell. Powertel is fully commercial in three markets, which are considered “soft launched,” since no marketing or promotion has begun. “We want our customers to be introduced not only to a nice environment but to systems that are operational,” said Murrell. The company tries to “add subscribers slowly in order to get the personnel used to dealing with the system,” he added.
