There was a time when the market was entirely product centric and operators catered only to specific markets. Product specific battles and ‘core competence' were then the norm. Not anymore - with operators evolving to become full-fledged one-stop- communication service providers, the single trap door to success has become customer ownership. Essentially ‘customer-owners' and customers are the only two entities that matter and Improving customer service, increasing penetration of new services and service bundles, growing brand visibility and boosting overall subscriber numbers is what operators, big or small, swear by today.
The once cable service companies have now evolved into what is called Multi-Service Operator (MSO) who provide for all the communication needs of the customer - voice, video, data, and IP. But, this move has not put to rest the challenges for MSOs with satellite and wireline (telcos) operators making their inroads to become end-to-end service providers by bringing to market their own versions of double- and triple-play bundles.
In short, the market is far from successful reposition of MSOs as the clear, best choice for video, Internet and voice services.
It's all about Relationships and MSOs have them already
Retaining your customers is a lot less expensive than getting new ones.
MSOs are probably best placed as far as ‘customer - ownership' is concerned. MSO customers have always had longer associations with its providers, due to the region centric dominance of most of these cable service operators. A case in point could be North America, where MSOs enjoy high penetration amongst households - almost 70%.
Along with compelling traction for customer relationships the MSOs also have competitive network strengths to add - be it higher bandwidth for broadband access or be it its spectrum ownerships. Moreover MSOs are increasingly able to tie-up with mobile operators to give their content services through mobile devices as well.
The trick now is in ensuring that your customers keep coming back for more and more customers keep coming to you.
MSOs can; but how?
The ‘how' can be best answered by understanding the relations between your customers and your revenue and the fact that the single linkage between these is the overwhelming transaction-based services that are now being increasingly consumed by your customers. So to tap the innate revenue would mean to price your transaction based services and to price these services would in turn mean to price it based on your customer relations.
In a nutshell, the kernel of your future revenue model will be a customer relationship based pricing solution. Customer Relationship Pricing is nothing but pricing based on parameters that define your relationship with your customer. This would mean to say you take into account your customer's loyalty period, the total volume of business (or revenue) he brings to you, the volume of transactions he does with you over a period of time for each of the services like VOD, Games or VoIP; before arriving at the price for a specific transaction, service, bundle, individual, family members, family, affinity groups, etc.
With Customer Relationship Pricing what the MSO stands to achieve is the key to leverage its strengths.
For instance, to leverage your VOD network advantage against the satellite and telco service providers you would need to offer attractive VOD pricing schemes. Your VOD scheme for your customer could look like:
Subscription model
$20/ month - one movie per day
A la carte model
Rent 3 movies at regular price get one free
Arriving at such a scheme for specific customer segments taking into account factors like customer profitability and attractiveness would cease to be a challenge with a compelling customer relationship based pricing solution in place.
You can even come up with compelling packages for your customers based on various other criterions on the fly. The options you have are numerous with Customer Relationship Pricing.
Customer Relationship Pricing - Your competitive advantage
As an MSO you not only to mind your own businesses, but have to fend off competition from satellite and telcos.
It is in this paradigm that Customer Relationship Pricing becomes your competitive advantage giving you visibility to a number of criterions in real time including customer's loyalty period, the total volume of business (or revenue), the volume of transactions over a period of time for each of the services, etc.
Thus enabling you to do informed-pricing based on the entire value the customer brings to the table as you continue to earn more revenues, deliver outstanding customer service and enhance customer stickiness.
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