The Opportunity for Service Providers

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If consumers are the fuel of the digital economy, then consumer data is its motor oil. Using this data effectively enables highly personalised customer experiences and, if used correctly, encourages consumers to pay with today’s commodities – attention and cash.

However, consumer data can only be truly valuable to a business or marketer if the resulting communications or advertising deliver four things to the consumer: value, personalisation, control and trust. Service providers (SPs) are in the best place to capitalise and deliver on this. However they must transform on multiple levels.

As consumers we are familiar with the concept of opting-in or opting-out of marketing communications. However, motivating us to opt-in and divulge our personal information is rare, and usually buried deep in the legalese of the terms and conditions marketers expect us to sign. What is missing is a clear incentive.

Blyk, a UK-based mobile virtual network operator, is a good example of this. Aimed at the 16-24 age group, it offers its subscribers free talk-time and texts in return for advertising tailored to their personal preferences. Blyk has smashed its growth targets, indicating that the price conscious youth market is willing to share personal data in order to gain something of value – saving money and getting relevant advertising and promotions that fit their lifestyle. This value propagates throughout the value chain, enabling Blyk to generate response rates for advertisers that are orders of magnitude higher than the industry average.

It is also important to note that value is subjective: the budget-conscious youth segment values the free text and voice minutes, while business customers and enterprises may prefer to focus on quality of service and maintaining the privacy of their users. One size does not fit all.

For the most part, advertisers only make use of age and gender while search providers rely on page or search context information to derive demographic and behavioural profiles. Now imagine what could be possible if use was made of the vast amount of information that SPs hold, such as location, internet usage, calling patterns, hobbies and interests based on downloaded content or membership to social networking groups. This combination of explicity and implied interests can provide a uniquely differentiated experience for the individual consumer.

Recommending sites, products, and services based on my personal preferences; creating my own “virtual portal” of content from artists that I like; tailoring search results to my own preferences and location; enabling me to sign up to promotions that fit my personal lifestyle; notifying me when friends are in my vicinity – all these help me create an experience that is “Uniquely Me”.

With the proliferation of the open internet, smarter devices and the growing popularity of Web 2.0 applications and services, consumers are more empowered than ever before to dictate their own experiences. The walled garden concept is outdated, with alternatives no more than a click away. We want control over the amount and type of advertising we see, control over our own user experiences so that they are personalised to our tastes and control over where and how we consume content.

For example, on the internet and in the mobile browsing space, consumers have taken the reins with an increasing tendency to go off-portal in search of content i.e. navigate away from their SP’s home page or platform in favour of the open internet. For mobile operators, the ability to monetise the off-portal environment represents the latest challenge to declining average revenue per user from traditional voice services. By opening up their network to the latest next generation services they can, in effect, become the eco-system on which third party developers can create new and compelling applications to enhance the subscriber experience.

Even Google has realised that innovation also resides outside the Googleplex and, with the introduction of Android and the Android Apps Market, offers consumers access to a vast talent pool of third party independent application developers.

Data privacy is a long-running debate and now an interesting paradox exists. On the one hand consumers are becoming less guarded about sharing personal details over social networking sites such as Facebook and MySpace while shying away from explicitly commercial marketing activity. Add to this the confusion that many privacy policies create where phrasings are misunderstood and bewildering for the average consumer. The end result is that consumers either opt out indiscriminately or accept terms and then get bombarded with marketing messages that are irrelevant or simply annoying.

As we’ve explored, if you show consumers value, they are more likely to give up an element of privacy but the most important thing is that personal data isn’t abused by any parties privy to it. Misuse can only result in increased regulatory involvement in addition to alienating consumers.

The stakes are high in the challenge to capitalise on consumer data, especially when a question lingers: “Does anyone really own the customer experience when alternatives are only a click away?” It’s clear that those who provide the most compelling experience will win.

For SPs it’s make or break time. They have the opportunity to win the hearts and minds of consumers and earn their coveted attention and cash, but only if they transform on multiple levels. They must understand their customers, open their assets to partners and provide consumers with value and freedom. In the words of Kahlil Gibran: “If you love somebody, let them go, for if they return, they were always yours. And if they don’t, they never were.”

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