Context Drives Experience:

How Ethnographic Research on Mobile Data Drives Sustainable Prot for Mobile Carriers

The Optus CEO recently declared his companys shift to sustainable prot growth, moving from raw subscriber acquisition to an emphasis on retaining and increasing revenues from existing customers. Sustainable protability means retaining existing customers and encouraging them to spend more money on mobile. Central to this proposition in the era of data is understanding why. Monetizing the increase in data use means building a better customer experience around social context. Customers dont consume data, they consume what data does for them. Understanding the motivations and drivers behind data usage will provide more solid foundations for pricing and marketing strategies.

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Carriers need to upgrade their marketing strategies: without context-driven customer experience, data is simply a commodity. Competing on data volume and price will become a race to the bottom that operators will lose to new entrants wanting to establish a foothold in the market.

The 4 Benets of Ethnographic Research on Data for Mobile Carriers

The best way to understand customer drivers is to research mobile data in context i.e. in the malls, street and homes (not focus groups and online) where people actually use data. This ethnographic approach yields 4 key benets for operators: 1) Drive product development road map by identifying customer pain points and usage proles. Identify the quick wins that operators can x to improve customer experience. Smartphone customers who experience between fewer problems with slow mobile web speeds spend an average of $11 more per month than those who experience considerable problems ($140 vs. $129, respectively). (source JD Power) 2) Develop relevant marketing messages to help migrate the sales strategy from being about selling commodities on price to being about selling the premium of social benet. Rohan Ganeson, MD of retail sales at Optus recently said of the carriers intentions to ramp up retail investment that, We want interactions with Optus to exceed expectations and the feedback, both good and bad, from our pilot stores will be invaluable in helping us shape the experience for the rest of the transformation. Success at the Frontline will depend on arming the retail staff with the most competitive insights. 3) Empower frontline and service employees with insight on how customers use/could use data and help them cross-sell other data products in the operator portfolio. 4) By identifying the power users and inuencers, operators can dedicate more resources to these key market makers. The power users (20% of the
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market) currently use 80% of data trafc, with top 1% generating 17% of trafc (source Cisco). All 4 benets combine to create a better customer experience which in turn reduces customer attrition (churn), increases individual revenues (ARPU) and drives recommendation (NPS).

The Starting Point

Youth drive mobile trends. They are already at the forefront of change. Youth are both the heaviest users of mobile internet and those with the greatest social need to make operator rollouts successful. Youth are the inuencers. Technologies that reach mass market adoption often lter through the youth market rst (e.g. SMS, Facebook, Messenger). Not only do youth inuence each other but data from the 2013 Mobile Youth Report shows that they exert a signicant inuence over the adult market. Compared to adults, youth are more likely to use mobile internet services like social networking (50% vs 12% for adults), photo sharing (38% vs 12%) and streaming videos (24% vs 5%) (source Gallup). Quantitative research into mobile data consumption patterns cannot reveal the ofine scenarios in which youth use mobile internet. Mobile carriers need qualitative research to step into the 3Hs (homes, hangouts and hideouts). Actionable insights for marketing and innovation can only be achieved when we understand how and why youth use mobile internet. Operators should start developing their future customer propositions by employing ethnographic research to understand how youth are using data today.

What Should be The 3 Key Outputs of Ethnographic Research?

The key outputs of ethnographic research should help operators identify which users and activities within mobile data are most conducive to protability (e.g. We found that 15% of SingTel customers now generate 85% of the data trafc but not necessarily 85% of their prots). MobileYouth ethnographic research focuses on building operator customer propositions
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around a solid context-driven customer experience. The 3 deliverables of such research are: 1) A gradation of young data users based on behavior and attitude as opposed to more traditional demographic segmentations. 2) Pen proles of key data users that identify both drivers and the ofine scenarios where they use data. How do pen proles vary by usage scenario and handset? (e.g. NPS for mobile internet varies by handset ownership: Apple +49%, HTC +41%, Samsung +23%). Proles providers operators with a natural starting point by identifying youth market inuencers. 3) Reframing of app categories based on social context (e.g. arranging meetings, while watching TV, photo sharing) as opposed to traditional formats (e.g. games, business, utility). Already 60% of youth use mobile data to organize gatherings, and 45% of youth use mobile data to settle arguments (source Pew Research). These behaviors are more relevant to young peoples social lives and are unlikely to change as they enter the adult world.

Positive Customer Experience for Data Creates a Barrier to Market Entry

In an interview with Rutgers, Verizon CEO McAdam spoke of the early days the mobile industry where operators focused on monetizing negative customer experiences (e.g. roaming charges, paid voicemail etc) but that left the door open to new players (such as Verizon Wireless). It was a pretty ugly experience, he said. There was a good opportunity for someone to come in and disrupt the environment to consolidate and create scale. Verizon successfully disrupted the environment by building its culture around customer need as opposed to customer revenue maximization. As operators talk up the opportunity to maximize customer data revenue through pricing structures which by comparison to xed line offerings are archaic, they too expose themselves to external disruption. By contrast, focusing on the customer experience has enabled Verizon to maintain the lowest churn and highest customer recommendation rates in their market, despite rivals paying extensively for iPhone exclusivity.
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Today, operators need to re-engineer their cultures around the customer experience of data and leverage ethnographic insights to guide their strategies. If operators fail to get data strategies right now they leave the door wide open to prot erosion from new competitors such as Google who thrive in xing broken technology experiences. As the handset industry has learned, once they invite new players like Apple in, its impossible to regain their market position.

Find out more:

The 2013 mobileYouth Report

Find the most relevant insights on youth mobile marketing: http://www.mobileYouthReport.com