I didn’t forget, I just wasn’t ready to complete part two of this article. Funnily enough over the past two to three weeks we have actually had two new prepaid mobile offers enter the market, making it more competitive but also interesting in terms of where they have placed their efforts when it comes to pricing and marketing.
I don’t think you can have one plan that suits everyone. You need a range of offers that cater for the key markets that seem to be or have become popular in Australia. Below are the key markets that you need to cater for (where I think you do anyway).
Discount Call Rate and TXT. There are already a few players in this market and the fact that Telstra has recently entered it confirms that they are losing market share to others due to price. The challenge here is how to make money at it. Shorter expiry periods, higher charges on services like data, online self servicing, charging more than $2 for the sim. These are all considerations. The second challenge is starving off churn. If the investment to enter into a prepaid arrangement is so low, then it is just as low to move away. Whilst value add is important, how do you offer a proposition that is different from the others that will provide that glue to hold on to those customers. Red Bull Mobile is a good example of adding value to a basic prepaid service. They and the brand offers much more than a mobile service, it offers association to a club, a club that has brand qualities people (younger mainly) want to be a part of. It isn’t just the racing though, it is the drink (which I personally have never tasted) and everything else that is cool about Red Bull.
One Mobile recently tried (and is trying) to do something similar. Associate an experience with the mobile service. It isn’t easy. GrL Mobile tried to do with the younger female market and failed. Boost Mobile have had some success I guess.
International calls. You need a package that allows you to make cheap international calls from your mobile. This could be a bundled offer with the cheap local calls eg $5 extra recharge more for the package, or it can sit as a stand alone package. However it still needs affordable locals calls. You can’t have cheap international and average local call rates (or maybe you can). Another approach is to have a sim with multiple pools of credit that can serve different needs. Recharge your data, local and international calls separately. Not sure but maybe an idea. At the moment, Lebara, Lyca and gotalk have really dominated this space, with all of the majors launching an offer over the past 12 months. This surely shows that calls are being made overseas and the market is there.
Mobile internet and data. Over the next few years more than 50% of mobile users will have some form of smart phone, with 3G or even 4G capability. Apps are data hungry and we are becoming more accustomed to mobile searching. All plans need a data component, even if it is 100MB and then a competitive per MB or KB rate. This is where you can be clever with what you offer. Offering low per KB pricing and no formal data allowance is fine but your customers need to understand that you are offering value this way. Most customers have no idea what the difference between per KB and per MB is. Most don’t care. They look at the allowance. You also need an allowance for Facebook and other trending social media tools. If you know that the regular access to Facebook by a typical user is only 5 MB per day then make it free (with conditions, eg large images and video). It looks more valuable than saying data is 5c/MB charged per KB.
Unlimited. If you are going to offer an unlimited offer than $39.90 is the maximum price you can really go for. Boost Mobile started it, many have followed. You unlimited needs data. Lebara’s recent attempt at unlimited has this drawback. $10 of credit is available for services like data. At 5c/MB charged per KB that is 200MB (in KB increments). If you need to explain it, then your customers will miss it. You don’t necessarily need to go unlimited. There are plenty of plans that offer great value, enough for the everyday person without offering Unlimited. The alternative is to do price it the way Red Bull have, you pay an amount and you get a certain amount of minutes per recharge, not $credit. So if you offer someone 1000 minutes for $30, they know what they are receiving and can understand that much easier than $500 credit. See a previous article on recommendations from ACMA.
The support services need to be there. OneMobile launched/launching a recharge app to support their mobile service. They will also have recharge kiosks located around the country. These are all great and different initiatives. They all help but the basic package needs to be there. The most important service is Customer Service. If you can get this right then you will win the customers over. Make it easy, make it friendly and get it right the first time. With tight margins you can’t afford not to.
