Finding bill shock's hidden opportunities

Whenever there is a high-profile “bill shock” case that crosses the news, as a residential or enterprise customer gets hit with an unexpectedly high bill, it begs the question of whether service providers lose more in reputation than they gain in revenue. It’s a question confronting them more than ever today.

With a July deadline looming for legislation in the European Union around roaming charges, a regulatory precedent will be set that may affect other operators throughout the world, forcing them in time to confront bill shock. And while regulation may be one driver, it’s not the only one. Congestion issues continue to loom, too, particularly on mobile data networks. But there are also some positive drivers amid the bill shock anxiety: chances for upselling and cross-selling as well as bolstering a brand.

For the smart service provider, why should it wait for regulatory and congestion ultimatums if there is a chance to leverage real-time charging and policy control for volume-based and even bandwidth-based tiers that provide a competitive advantage by building loyalty among its most profitable customers?

Real-time policy control as a marketing tool

Even without regulatory pressure, operators in North America are independently and as an industry putting out requests for proposals that explore the value of real-time policy controls and real-time fulfillment and billing capabilities. More and more, suppliers say they see marketers looking for areas of innovation that will build customer loyalty, as well as help with resource management/traffic-shaping/fair-usage issues. Not only will proactive action protect the network and the customer, but also attract revenues from advertisers and perhaps over-the-top players.

“We see two schools of thought in marketing departments: the more traditional one of not wanting people to have real visibility into what they are paying for because if they knew what it was costing them, maybe they’d stop spending, to one where marketing departments realize customers who grow wary of what they’re being charged are more likely to churn, especially if they have been burned once for something they thought was innovative or ‘cool,’” said Graham Cobb, director of product marketing for Telcordia.

Cobb said he sees a “slow and steady” move by marketing toward the latter mind-set: give people the tools and they will spend fair amounts, as long as they trust you.

“Once the EU passed regulations, the writing was on the wall, so operators in Europe started using that mind-set as a competitive advantage by proactively telling people they were reaching limits and then going the next step of offering special discounts and special packages more in tune with their personal interests and behaviors,” Cobb said. He also sees operators making more information available through the Web and smartphones, which make it easier to check balances in near real time for both prepaid and postpaid services. “That opens the door for even further personalization and self care,” he said.

Despite the possibilities, challenges remain around the fact that silos for prepaid and postpaid systems are separate — particularly in mature markets. For this reason, service providers in North America and Europe generally lack the ability to support online charging — a necessary factor for giving customers more control of their own experiences. Though seen with parents and children through parental services like Kajeet, there’s not much going on in mature markets among individuals and enterprises.

“Implementing this now requires money, effort and high-level decisions to ‘duplicate’ existing billing systems to do the same calculations but in real time as services are being used,” said Olivier Suard, marketing director for Comptel. “It’s time service providers distinguish between bill shock capabilities which tie to network protection concerns and the next-gen marketing they can do to provide better customer experience through bolt-ons and add-ons that can be profitable.”