Mobile Brands, Platforms, and the Power of Customer Experience
Not for the first time, the UK Consumer Association’s media brand Which? has uncovered telling realities about the UK mobile market. In a recent customer survey, Which? found that Mobile Network Operators (MNOs) are falling short of their virtual counterparts, MVNOs, when it comes to delivering a winning customer experience.
Specifically, of the 13 mobile service brands covered by the survey, the last-placed three were the UK’s incumbent mobile operators — Vodafone, EE, and O2, in reverse order. BT, which owns EE, came ninth, one place ahead of the only mobile operator, 3UK, to make the top 10.
Heading the list were a number of MVNOs and other brands. In first place was GiffGaff, a neat MVNO play which targets tech-savvy BYOD consumers and crowd-sources its own support from them in return for perks and bonuses. Tesco Mobile and Asda Mobile, both MVNO plays for share of wallet from large grocery chains, were also in the top five.
Crucially, not one of the top seven mobile brands judged by value for money, overall satisfaction, and customer service owns its own mobile network.
Meanwhile, data published last month by UK consumer research provider YouGov, showed that the UK’s leading mobile operators had a net subscriber loss of 21 per cent in 2018, while the market’s MVNOs enjoyed a net gain of 23 per cent.
Consumers Respond to Experience
And, while price was the most prominent factor driving churn, poor customer service and a lack of reward for loyalty – key elements of the customer experience – were among the top five reasons for switching.
So what does this tell us?
Well, what it certainly does not tell us, to be quite clear, is that mobile network operators don’t know what they’re doing.
Rather, what it suggests is that mobile brands that focus on providing a certain type of experience, or targeting a particular type of customer with a tailored offering, could be well placed to win the battle for customer affection.
Mobile operators understand this and they have long sought to use sub-brands to target certain market segments. GiffGaff is actually an offshoot of O2, which was also a founding partner of Tesco Mobile. In the US, Sprint owns Boost Mobile, AT&T runs the Cricket sub-brand and T-Mobile operates Metro.
In Spain one of the most successful mobile brands in the market is Lowi, which is owned by Vodafone.
What is interesting about Lowi is that, although Vodafone Spain clearly had all the back office IT systems required to support the launch of a new sub-brand, it opted not to use them for the launch of Lowi. Instead it chose the Pareteum platform.
Mobile operators have built IT estates geared towards serving mass markets, whereas MVNOs – in the most part – need to be nimble and flexible enough to profitably serve smaller segments and sub-segments. And while mobile operator IT estates are being virtualized and moved into the cloud, partly to enable greater flexibility, the process is lengthy and disruptive.
There are numerous brands in every market which have the potential to create and deliver successful, innovative mobile experiences. Some will be new brands, like Wing Mobile in the US, while some will be established in other, perhaps adjacent segments.
Platforms Power the Experience
What they need, just as Vodafone Spain recognized it needed, is a cloud-native communications platform which can bring them to market fast and give them the flexibility and scalability to secure their position and grow it over time.
They also need the best available network experience at all times, which by definition requires access to more than one physical network.
Pareteum’s Experience Cloud and Smart Network offer precisely this ability, blending cellular and Wi-Fi footprints to allow mobile brands to automatically select the best performing connection in the moment. It is perhaps not surprising that high profile MVNOs are taking the lead in this approach, using aggregated Wi-Fi footprints as a powerful complement to cellular.
Being able to access all of these capabilities from a single platform, and on a no-Capex, pay-as-you-scale basis, gives MVNOs the freedom to focus on the proposition and the customer.
Not all of them can succeed, it goes without saying. But some of them certainly will, and their successes will be on a grand scale.
Because, as the Which? and YouGov data shows, the best experience drives the most loyal response from the consumer.