How to reduce churn – the stickiness of sharing data

Written by on July 27, 2016 in Opinion with 1 Comment

The alternative title for this article is ‘how to get value out of a commodity’ or even ‘how to get blood out of a stone’. We have long been saying that data is so abstract that, unless you are very creative, the only way you can sell it is as a commodity. Thus we have been saying that operators need to create products, not just sell more data.

300x300-shared-data-transp-Disruptive-Views-1But it seems we may be wrong. If you sell data in creative ways, then not only will people ‘get it’ but they will stick with you, too. The proof is, if not in the pudding, in a new guide-book from real-time specialists, Openet. The benefits of offering shared data plans are clear. For instance, ‘in the US in Q1 2016, the two market leaders, Verizon and AT&T reported monthly churn rates of 0.96% and 1.1% respectively’. Those levels of churn would have been unheard of not so many years ago.

Although the US is at forefront of the sharing game, churn rates across different regions are also at all time lows, and even in the hyper competitive region of SE Asia, there are some signs that sharing works. A ‘leading service provider in Thailand reported 3.7 percent, although in Indonesia this figure has been reported to be as high as 10 percent’.

As the book says, ‘paradoxically, these stable churn rates come at a time when it’s never been easier for customers to move from one service provider to another’.

Sharing can come in various forms, too, it does not just mean between a family group or between a particular class of device. Now, cars and wearables can be part of a group, and there are innovative ways that data can be used to keep customers. Allowing parents to design how their sharing bundle will work, with the various different needs (and controls) provides scope for creativity. As the slogan for a family bundle from EE in the UK puts it,  “Share a plan, save your household a packet.”

It is not just about savings either. You can give the gift of data.

In the Netherlands, a service provider offers free calls between group members (you can decide who is in the group) and the group gets a monthly gift. Of data.

It also, of course, depends on the culture of your customers, which is dictated by the region. In some areas the ability to donate data to charity may be popular, in others the potential to dip in to a pool of shared data might be what sparks the imagination.

It is clear from the examples in the guide-book (available free here, for a short registration) that there is scope for innovation with simple data. The ability to share it and manage it within a group is compelling.

Beyond data, however, the true scope of sharing comes into its own, and when telcos truly begin to offer shared products (Facebook, Netflix or Pokemon Go), great things will happen.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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  1. Bob Machin says:

    You could say that telcos are just picking up on what other industries have long known, that shared and bundled services are harder to unpick and harder to leave. The multi-car policy that I have from Admiral could be described as ‘shared insurance’ – we make a single payment and three of us can access it. To be honest, I’m no longer sure how good a deal it really is, but when renewal time comes around, it would be a major exercise to run around and get separate quotes for four vehicles. As these organisations are well aware, stickiness depends on that kind of inertia – do you have the motivation and the willpower to break free?
    They’re also aware that such offerings act as a powerful lure for new users. With the insurance I was in first, but then I encouraged my wife and my daughter to join the party, not least because it made life a lot more straightforward for me. And I guess shared data plans work the same way – drawing users in with promise of cost and convenience, then making it hard for them to leave. Lobster-pot offerings, you might say.
    Reading this, it occurred to me is that slowly, almost imperceptibly, consumers have come to understand what data means. Seems no time since we were assuring one another that consumers would never get on top of the abstract concept of ‘data’ and would forever have to be sold on content, whether that meant movies, songs, bundles of emails or whatever. Those days seem well and truly behind us and consumers seem to have no difficulty understanding what a gig of data means. Or at least understanding the code that corresponds to ‘a lot’ and ‘a ‘little’. They’re not scared by it any more (not unless they’re abroad anyway). When did that happen?

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