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04/27/2020

Maximizing the ARPU from telco security

A how to guide with insights from Whalebone CEO Richard Malovič.

Knowing how to properly sell your telco products and services has long been a key to business success. Questions include what kind of product or service to sell? What do customers really want? What is currently trending or likely to become a major trend in the future? What is the competition doing and how well is it working?

It’s also important to ask what you can do best. As a telco, what specific types of products and services can your network provide? How big are your customers’ wallets, i.e. what percentage of their expenditures are they willing to pay out for a given product or service?

To ascertain this you need to look at the underlying structure of your customer base and break these down by market segments, e.g. post-paid versus pre-paid customers, average revenue per user in other categories as well, such as residential, mid-sized customers, small businesses, and fixed versus mobile and combined internet users.

The business case

So now that’s you’ve selected a product or service to sell, it’s time to map out the business case and present it to senior management. Determining the business potential by product for each vertical market segment is a key part of the plan. While this can be difficult to ascertain, even using fairly comprehensive internal data, the better idea you, as a product manager, have of the viability of these vertical markets, the easier it will be to lay out the business case.

But what happens when, after trying your hardest to collect internal data across the organization, the picture is still too fragmented to draw solid conclusions?  That’s when it’s advisable to seek out guidance where possible. The best place to start? The vendor. In-depth conversations with forthright, highly transparent vendors regarding their experiences and what types of adoption rates can be expected can go a long way in filling in the blanks in the business case. Experienced, quality vendors like Whalebone can even provide you the figures you need to make a compelling case.

 

Closing the deal

Fundamentally there are two main types of sales, namely opt-in, and opt-out scenarios that you’ll need to pitch to senior management.

How to close with opt-in

Opt-in means the customer must actively select the product. This can be made extremely easy with Whalebone, as, since there is nothing to install on users devices, customers at their point of sale, be it on your website, via a call center, or at a brick and mortar shop with a sales agent, can simply be asked if they would like the service. In Whalebone’s experience, opt-in uptake rates can range from 40-70% of customers.

How to close with opt-out

Opt-out means the service comes pre-included. The service is actually already running, for free, when the customers signs on. After a standard trial period, the customer can either opt-out of the service or, by doing nothing, continue to receive it for a nominal fee.

While the opt-out scenario does tend to have higher uptake rates, more than 70%, using this method very much depends on your telco’s customer approach and brand style. This scenario would clearly work well with a full service, high end provider, but, for example, may not go over so well and should be replaced with an opt-in scenario for telcos who present their brand image as super economy class. 

At the end of the day the choice of method will usually depend on the regulatory environment in a given country as well as the telcos’ approach to its customers, its brand image and reputation.

Time to market

Yet another consideration is time to market. When launching a new product or service, delay can equal disaster. In today’s dynamic markets, research pointing to market demand may well be outdated by the time the product or service is launched if, for example, this takes a year or more. At the same time, operators must take into consideration their own windows of opportunity and product/service release schedule. Whalebone offers extraordinarily fast time to market, from weeks to months depending on your network complexity and needs, but you won’t be caught watching the clock tick as your competitors cash in.

Thinking strategy

An operators’ overall strategy should also be taken into consideration. Are you working for an operator that prefers to offer a wide range of products drawing incremental revenue from each one? Or is it an operator that prefers to focus on launching a few products on a large scale to impact overall revenue?

Standalone or bundle?

At the same time, it’s important to assess whether the product or service will be launched as a standalone product or part of a bundle. With an increasing number of today’s operators offering convergent products, such as mobile and home internet combining fixed and mobile services, discerning where to place the product or service is an important choice when it comes to successful sales. Whalebone is wonderfully flexible and can be tailored to meet your specific needs.

ARPU

Finally, determining the most effective price point is mission critical. As a general rule, 5-7% of average revenue per user by country is a good starting point. For example, if average revenue per user is EUR 20, then a price point of EUR 1-2 is in the right ballpark. The price point can also be measured by the speed in which a customer makes his/her decision, which should be no longer than 10-15 seconds. The longer it takes a customer to decide, the greater the indication that the price point is not correct.

Conclusion

When it comes to effectively securing your network, adding value for customers and driving revenue, Whalebone is ready to offer comprehensive advice on what you can expect in terms of time to market, adaptation and revenue generation. Be prepared to make your business case and sell your new product or service successfully. Contact the experts at Whalebone today!

TRY WHALEBONE

 

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