TMCNet: Using Personalization to Stimulate Demand for Mobile Services
TMCNet Column - Mobility Matters: Device Management Insights
by Matt Bancroft
As markets mature, new techniques are often needed to stimulate usage and revenue. Segmentation is a well-understood marketing technique that can often help to accomplish this.
Most markets are not homogenous; customer segmentation is the practice of dividing a market into groups of individuals that are similar in specific ways, such as age, gender, interests, spending habits, wants or attitudes. Value is created when products and services are targeted appropriately into these segments. In the mobile marketplace, there is an increasing need to be more targeted in our marketing — adding customer insight to the mix and more flexibly delivering services that meet the needs of specific customer segments, thereby driving higher mobile usage. The mobile market has seen a huge amount of innovation over the last 20 years and it will need to keep innovating to ensure that end users continue to do more with their mobile devices.
Recently, Mformation commissioned a survey of mobile consumers to find out more about their mobile usage and preferences. We asked 4,000 mobile users in the USA and UK — all self-described “heavy mobile phone users” — a number of questions about their current mobile device usage and their attitudes on personalization of mobile services. Consumer views of a broad array of personalization options were solicited as part of this survey — from the ability to tailor the services and applications used on or via the devices, to the ability to customize the features and functions, user-experience options, and menu structures on the devices themselves.
We found that revenue-generating mobile data services are gaining ground, with high numbers of respondents reporting that they use a wide range of mobile services. 43 percent reported using mobile email, 51 percent mobile Internet and 46 percent mobile picture messaging. However, even among heavy users of mobile phones, there were still a large number of people surveyed who reported rarely or never using mobile email (57 percent), mobile Internet (49 percent) or mobile picture messaging (54 percent), though more than half of these respondents also reported that they would use these value-added services if they were made easily available to them.
Another top-line finding from this survey was that a significant portion of global revenues from mobile applications and services are not being realized because of an inability to personalize mobile devices and the services accessed via these devices. While consumers want to use more mobile applications and services, these applications and services need to be tailored more closely to the needs of each user in order to generate increased usage. Respondents indicated that they want a more personalized mobile experience, something that operators could provide with a "pick-and-mix” approach to mobile applications and services.
Findings from this research indicate the pent-up demand for mobile personalization:
- 80 percent of respondents indicated that they would use more mobile services if these services could be tailored for them
- 86 percent of respondents felt that personalization would enrich their mobile experience
- 67 percent of respondents indicated that they would be willing to pay a premium to personalize their handsets and the applications and services on them
In addition, the research uncovered some frustration with the current state of affairs:
- 68 percent of respondents indicated that they find buying a mobile phone frustrating, knowing that the device is set up without any flexibility to change the services that come with it
- 94 percent of respondents indicated that they already personalize their device using the limited options available, such as wallpaper and ringtones. However,
- 89 percent of respondents said that they would like a higher level of personalization
- 81 percent of respondents indicated that they would switch providers if it would allow them to customize/personalize their mobile device more
Clearly, mobile consumers want to use more applications and services. The momentum behind application stores is a step in the right direction, but represents only one element of supporting a personalized mobile service experience. Another option could be pre-loading phones with different services, content and information depending on the type of user to whom they are targeted. Alternatively, bundles of services could be loaded onto the device while the user indicates their preferences when they are buying the phone. Later, carriers could promote offers and services depending on the type of user and on user behavior when they visit the carrier’s website, interact with the call center or come into the store.
There are several steps required to drive higher levels of personalization into the mobile marketplace; a number of technologies must come together on the device and in the network to support customized mobile services. However, end users don’t care about technologies. They want a simple process for obtaining applications and services that meet their needs, and they want a personalization process that is simple and intuitive.
The challenge for the mobile industry may actually be less about the technical complexities and more about building a mindset and culture that focuses on meeting end-user expectations. The mobile industry could learn from other industries where a more targeted marketing approach is “business as usual.” There are many players in the mobile industry — incumbents and new entrants — looking at broadening and deepening the service set to users. A pick-and-mix approach for more targeted delivery of mobile applications and services is one approach to broadening market reach.
The message is straightforward. Greater investment in personalization will ensure better targeting of services that are relevant to users. As we’ve seen in many other industries, when consumers have a greater opportunity to specify the make up of the products and services they purchase, they will use more of those products and services more often.