Where can you find growth opportunities for value added services?
Classical value added services for consumer customers generally fail to generate sustained revenue, with many offers simply becoming part of standard offers. With premium content increasingly central to consumer offers, traditional value added services are unlikely to generate the additional revenue many seek. However, that’s not true for B2B customers. With analysts agreed that operators are failing to capitalise on the potential of B2B markets, a key first step to correcting this is to ensure that they offer the right value added services that can make a difference.
For many operators, the last 20 years has seen a relentless search for a mysterious value added service that will captivate customers, enticing them to pay extra for a feature or application. Value added services that are based on telephony or messaging capabilities have historically been identified as offering the potential to recoup lost revenue and to grow profit by encouraging subscribers to sign up for a new service for which incremental fees are charged. Despite this, the killer app has never been delivered.
While there have been some successes in mature markets, most have been short lived. Of course, there have been some exceptions but, typically, either operators have introduced a service with a fee and have seen little traction or they have only been able to charge a premium for a short period, after which it quickly becomes an inclusive feature of existing packages. It’s rather like car manufacturers that charged for something such as air conditioning, only to include it as standard after a period of time.
Instead, operators have found that customers are prepared to pay for premium TV, media and content services, but these have a more complex value chain and include third party providers which dilutes their impact on bottom-line profits. Operators often have to include premium access in bundles as ways to make them more attractive to users, absorbing the associated costs and reducing positive revenue impact.
The fact remains that classical value added services have often tended to disappoint and most of these have, instead, only really delivered value by enhancing an existing offer and helping reduce churn rather than by generating incremental revenue streams. Reducing churn is clearly beneficial but it’s not going to drive top-line revenue growth.
So, what’s to be done? Are there services that use classical telephony and messaging capabilities for which operators can charge additional fees, so that they can deliver revenue growth? The answer is yes, of course there are, but they need to be targeted to the right end user customers: classical value added services can deliver much more value for enterprise customers than they can for consumers.
That’s why analysts, such as STL Partners, agree that B2B markets can deliver the growth that operators are searching for. The problem is that operators have yet to capture their full potential. Too many operators simply focus on bundles that cater for business users rather than trying to deliver more value and to provide richer services that meet communications needs.
Our experience here is telling. Time after time we have seen our operator customers deliver new value added services that provide enhanced functionality to classical voice and messaging services for B2B customers and for which incremental revenue can be charged. These range from simple Multi-Device and Twinning services, which may generate revenue of a few Euros per user, all the way to complete Mobile UC offers, which deliver even more value.
And yet still many operators are neglecting this opportunity. For whatever reason, they focus on a core offer but fail to take steps to add value to their B2B clients. We can help. If you want to be able to offer more to B2B customers, we can show you how. Value added services have much to offer, if used in the right way and if targeted to the right customers. Talk to us to find out how.