Another perspective on self-care tools

Self-care or self-service allows consumers to choose exactly what they want, on their own time, from companies that have digitally presented their products and services in an aim to ease consumer selection. It is usually enabled either through a web or a mobile app user interface. Self-service has the power to bring about paradigm shifts by disrupting existing business models.

The travel industry is one of those that has been most disruptively affected by the self-service concept, as travel websites combining price searching and booking shook up traditional players´ retail store based business model. The comparison of a traditional vs. a disruptive player in below graph exemplifies that.

Graph on self-service

There are countless examples like this one that illustrate how self-service is a revenue enabler. It does enable revenue generation by allowing customers to both easily find offers that fit them and then perform the purchase in a simple way themselves. While some consumer segments have moved gradually from traditional avenues to self-service, the younger generation actually takes the self-service channel for granted for most of their purchasing. Various companies or industries that have not yet recognized this will fall behind.

The telecom industry, despite its strong ties to technology and the digital world has so far not always been ahead of the curve with self-service; but operators have seen self-service merely in terms of cost savings and as a means to increase operational efficiency. The advent of smartphones created a new playing field and changed this operator outlook. It removed the need for customers to go through cumbersome browser interfaces, which require them to login.

For that reason self-service has recently caught on as a number of global telecom success stories show. North American operators successfully transitioned to data-centric pricing schemes using shared data plans that have raised their data ARPU. Self-service solutions were a key enabler for that (besides other building blocks such as network quality, handsets, etc.). They were pivotal in enabling more consumer control. One leading Asian operator that Northstream has studied managed to increase its data revenues by 90% and increase data traffic by 120%, when launching their self-service solutions.

There are clear observed correlations between self-service with operator revenues for both pre and postpaid markets. Besides attracting new consumers and stimulating adoption of new product offerings, there is increased operational efficiency: a self-servicing consumer loads an operator´s customer care call center significantly less.

Self-service may have an even bigger impact when data analytics are applied at the same time. The online travel agency booking.com learns about what users search for and end up purchasing. Based on that information, users are presented with personalised offers, tailored to aggregated assessments of their searches and choices. Some telecom operators, noticeably often in markets with challenging macroecomic situations (and cost-conscious customers), such as Greece, Ireland and Portugal, have applied this way of applying data analytics to self-service. They have made use of their knowledge of customers´ consumption and bill history and offered self-service mobile smartphone applications that present personalised propositions to their consumers. In order to customise personalised client offerings based on particular use patterns, the backend system stack has to support big data analytics (see the Northstream white paper, Analytics beyond the hype: CSPs achieve tangible benefits). The revenue upside of self-service offerings might very well provide a business case for an investment into backend upgrades.

As we see it, the time is now. After researching the telecom market in Italy earlier this summer, very recent offerings in Italy provide Italian customers the chance to personalise their subscription by adding differently sized modules for voice, SMS and data through self-service tools. Going forward, we believe it will matter that operators seize the self-service opportunity, by matching consumer expectations for freedom of choice when it comes to services, and by aligning themselves with a proven way to raise revenue.

/Franz-Josef

Franz-Josef is a Consultant at Northstream

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