That well-known phrase "Show me the money" really does ring true for today’s CSPs. So many are losing out and at the same time leaving money on the table. Why don’t they understand more about the value their customers put on a particular service?
I question whether the mass-market approach taken by CSPs is sufficient in order to succeed? I know I am old Generation X who has been in the industry for nearly 25 years but from what I have seen and read, there seems to be a need for CSPs to alter the way they engage with new customers, millennials and beyond, if they want to avoid the trap of merely being becoming a utility or dumb pipe.
For all those new customers many years younger than I, it is no longer sufficient to ask the question “Is the service any good?”. The era of the pure service industry is fast disappearing. Millennials will champion those brands who actually take time out to understand what they value, and will measure success more based on their experience.
Today I have choice. If my CSP does not understand what I value, it’s easy for me to switch provider based on network quality and poor experience alone. I don’t know anybody who feels a particular attachment to a CSP.
I get automated texts from my CSP that merely serve to remind me that they don’t understand what I value. Most people I know stay with a CSP for convenience. Contrast this to the social stickiness and customer involvement generated by OTT success – just look at the success of Netflix. Their ease of use across devices and personalised content recommendations, based on usage, solidly hits the mark.
I wonder whether there is an emotional detachment between CSPs and their newest customers. Without understanding what Generation Y and Z value, CSPs may continue a race to the bottom in pricing terms.
A very worthwhile read is Jeff Fromm’s ‘Marketing to Millennials: Reach the Largest and Most Influential Generation of Consumers Ever’. Jeff Fromm is the expert on this and I always defer to the experts. What resonated for me when thinking about this blog was how Jeff discusses that future generations will not want to be passive consumers. Millennials will want to actively participate and co-create. New consumers need to be included as partners in order for them to become attached to any particular brand or, in this case, CSP. Jeff also mentions that it is possible that service and emotional benefits alone will not be enough for products to flourish with Generation Y and Z, if they don’t feel they have a shared interest in the brand success.
So as a way of summarising new world versus old world, I am using a model from The Boston Consulting Group, and Service Management Group, ‘American Millennials: Deciphering the Enigma Generation,’ (September 2011) in which BCG coin the phrase the ‘Participation Economy’.
| Old Model | New Model |
|---|---|
| Interruption | Engagement |
| Reaction | Interaction |
| Heavy Users | Engaged Participants |
| Big Promises | Personal Gestures |
| Passive Consumers | Active Co-creators |
To me, ‘The Participation Economy’ is more of a lean, ‘understand what customers value’ based approach to product development, embracing co-creation with customers in an upfront process. It includes everything from product or service design, agile product launches and changes, introducing minimum viable products to segments, iterative feedback and deep analytics to continually personalise the customer experience. Ultimately it provides more freedom as to what and how products are purchased, understanding what the niche values and providing a fully real-time online experience, i.e. behaviors more akin to digital start-ups.
Maybe as a victim of history, the ‘mass-market’ approach of CSPs is the traditional product process for building out a service, deciding what the value of the service is, setting pricing, full product launch and finally attempting to sell the value into the market - more or less the polar opposite of the process highlighted above.
The evidence now exists that consumers place a higher value on physical mobile broadband access, over and above what they pay for it (I’ve seen it; I can share it). By failing to adopt (or maybe their culture and BSS stops them) the more-value based participatory approach, CSPs could be making the cardinal sin of actually leaving money on the table. Understand what your newest customers’ value, allow them to participate in your brand, and behave more akin to a digital start-up. The end results may be that you gain an Internet dividend you did not expect!